Amid soaring business liquidations, falling retail sales and rising operating costs, UK business leaders and economists have criticised Keir Starmer’s assertion that Labour has stabilised the economy, citing data that paints a bleak picture of financial strain on firms and questioning the party’s fiscal and trade strategies.
Business leaders and economists have voiced sharp criticism of Keir Starmer’s recent claim that Labour has ‘stabilised the economy,’ highlighting the harsh realities faced by UK firms amid gloomy economic data and contentious fiscal policies. Speaking at the British Chambers of Commerce conference in London, Starmer asserted his commitment to backing businesses fully, citing trade agreements with the US and India as evidence of progress. However, this confident stance contrasts starkly with a series of troubling economic indicators and rising discontent among both backbench MPs and business communities.
Recent figures from the Office for National Statistics reveal that 17 per cent of UK businesses have run out of cash, marking the worst situation since the height of the pandemic. This financial strain is compounded by data from the Confederation of British Industry, which shows retail sales declining for the ninth consecutive month, with the recent drop being the fastest since early 2024. The ongoing impact of Chancellor Rachel Reeves’ National Insurance increase has been singled out by Bank of England governor Andrew Bailey, who noted that firms nationwide are responding by cutting jobs and wages, intensifying economic pressures.
While Starmer confidently stated that Labour had stabilised the economy and was now focusing on renewal, his assertion was met with scepticism and outright backlash. Prominent business figures such as Charlie Mullins, founder of Pimlico Plumbers, criticised the Labour policies, calling the National Insurance hike and other tax increases “vicious” and blaming them for battering struggling businesses. Economists like Julian Jessop from the Institute of Economic Affairs echoed these sentiments, arguing that despite government claims, underlying economic conditions remain weak: slow growth, rising inflation, a deteriorating labour market, and fragile public finances persist, while businesses continue to face high energy costs and additional payroll burdens.
The issue of business viability is further underscored by a surge in voluntary business liquidations, reaching levels not seen since the pandemic. This trend, influenced by recent tax changes raising the business asset disposal relief rate, has prompted many entrepreneurs to close otherwise viable businesses to benefit from lower capital gains tax rates before expected future increases. Economic uncertainty and rising operating costs are also driving this wave of exits, particularly among older business owners nearing retirement. The Treasury defends these tax adjustments as vital for securing public finances and funding the NHS, though critics warn such moves could undermine long-term economic vitality.
Criticism of Labour’s economic strategy extends beyond tax policy. Some commentators highlight a lack of bold vision compared with internationally noted approaches, such as the aggressive industrial and climate policies seen in the United States under President Joe Biden, which are credited with stronger economic performance. Labour’s approach has been characterised by cautious, incremental policies that detractors label as “austerity lite,” risking missed opportunities for robust growth and innovation. Additionally, proposals for welfare and benefit cuts have sparked concern among economists who warn that further reductions in social support could deepen poverty and hardship, undermining social justice and wellbeing.
Trade unions and industry groups also challenge Labour’s narrative around new trade deals. For example, the UK Spirits Alliance dismisses claims that such agreements will substantially boost exports, pointing to the high domestic tax burden that stifles investment and growth potential. Without significant reform of the internal tax regime, they argue, trade deals alone cannot deliver meaningful economic revitalisation.
Experts note that part of the challenge lies in the absence of detailed, comprehensive plans from Labour. While the party stresses partnerships with business to drive economic revival, critics contend that Labour’s proposals lack the specificity and ambition necessary to tackle systemic issues. Investment in public services and decisive government leadership alongside the private sector are cited as critical missing elements.
Broadly, opinions across the spectrum reflect concern that Labour’s current fiscal and industrial strategies may not only fail to stimulate sustainable growth but could exacerbate existing weaknesses in the UK economy. This has led to calls for Labour to rethink its approach, balancing necessary fiscal consolidation with investments and reforms capable of restoring confidence, encouraging enterprise, and promoting social equity.
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Source: Noah Wire Services
Verification / Sources
- https://www.dailymail.co.uk/money/markets/article-14851271/Bosses-hit-PMs-nonsense-Labour-stabilised-economy-one-six-firms-runs-cash.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 – Please view link – unable to able to access data
- https://www.ft.com/content/500c623a-2710-491d-984f-8796bc9926b8 – In the 2024-25 tax year, the UK saw a significant increase in entrepreneurs voluntarily liquidating their businesses, reaching the highest level since the pandemic. According to Companies House, there were 12,602 members’ voluntary liquidations (MVLs) and a total of 36,807 liquidations, driven primarily by recent tax policy changes. Tax advisers attribute this trend to increases in the business asset disposal relief rate, which allows entrepreneurs to withdraw funds at capital gains tax rates rather than income tax rates. The relief rate rose from 10% to 14% on April 6, 2025, and is set to increase to 18% next year. This prompted a rush of entrepreneurs to close viable businesses to benefit from the lower rates. In addition to higher taxes, factors such as economic uncertainty, rising costs, and challenging trading conditions also contributed. Many business owners, especially those nearing retirement, decided to exit early. The Treasury defended the tax changes as essential for rebuilding public finances and the NHS, while maintaining a £1 million lifetime limit on the relief to support entrepreneurs.
- https://www.thenational.scot/politics/24127458.keir-starmers-austerity-lite-will-not-deliver-economic-growth/ – An opinion piece criticising Keir Starmer’s economic policies, suggesting that his approach lacks the ambition and vision needed to drive economic growth. The author contrasts Starmer’s cautious stance with the more aggressive industrial and climate change policies implemented by US President Joe Biden, which have reportedly led to positive economic outcomes. The article argues that Starmer’s failure to adopt bold policies may result in missed opportunities for the UK economy.
- https://www.independent.co.uk/news/uk/politics/keir-starmer-policies-benefit-cuts-reeves-b2399406.html – A report highlighting concerns from economists about Keir Starmer’s economic programme, particularly regarding proposed benefit cuts. The economists argue that maintaining or extending cuts in the current economic climate will deepen poverty and hardship. They call for an alternative vision that improves wellbeing, aligns with environmental goals, and achieves social justice, warning that failure to present such a vision could have detrimental effects on many lives and futures.
- https://www.cityam.com/keir-starmer-right-to-partner-with-business-to-revive-economy-but-labour-plans-still-lack-detail/ – An analysis discussing Keir Starmer’s partnership with businesses to revive the economy, while noting that Labour’s plans still lack detail. Experts suggest that many of the UK’s current economic challenges stem from a failure to invest in public services and an ideological aversion to government leadership in partnership with the private sector. The article emphasises the need for a clear and consistent approach to drive economic growth.
- https://www.telegraph.co.uk/business/2023/05/14/keir-starmer-labour-war-wealth-uk-economy-tories-election/ – An opinion piece criticising Keir Starmer’s economic policies, particularly focusing on proposed tax increases and their potential impact on the UK’s economy. The author argues that Labour’s industrial strategy lacks detail and may be too expensive to implement effectively. The article also highlights concerns about the feasibility of funding such policies and the potential negative impact on economic growth.
- https://www.yorkshirepost.co.uk/news/opinion/letters/the-labour-government-is-wrecking-the-economy-and-the-country-has-lost-confidence-in-it-yorkshire-post-letters-5129590 – A letter to the editor expressing concerns about the Labour government’s handling of the economy. The writer criticises the government’s financial management, suggesting it has led to a £57 billion hole in public finances and undermined business confidence. The letter also references the International Monetary Fund’s criticism of the Chancellor’s policies and their impact on the UK’s economic downturn.
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Notes: The content appears to be a recycled version of an earlier report from the Daily Mail, with the earliest known publication date being 20 June 2025. The extensive republication across low-quality sites and clickbait networks indicates a lack of originality, which affects the freshness score despite based on a press release.
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