Labour U-turns cost Britain £8.2 BILLION as Rachel Reeves accused of 'kite-flying tax ideas'

Last week saw the latest raft of government U-turns, this time on Digital ID and business rates for pubs, their 13th such retreat.

Neither of these were included in the final figure, though the latter is expected cost £130million.

They also caved under pressure over inheritance tax rules for farmers last month, which could cost the Government up to £300million.

Calculated using Office for Budget Responsibility data, U-turns on personal independence payments and universal credit, the winter fuel allowance and the two-child benefit cap are some of the examples included in the figure.

Policy uncertainty has been higher in this Parliament than any of the previous seven, according to the report.

And, excluding the £24.6billion in policies that were scrapped from Liz Truss' 2022 Budget, the think tank said this government's series of U-turns is the largest in terms of value by any government since 2012.

This can reduce business investment due to uncertainty and makes it more difficult for the Prime Minister to achieve his growth goals.

Greg Thwaites, Research Director at the Resolution Foundation, said: "There’s lots to welcome in the Government’s economic growth strategy.

"But it has spent much of the past 18 months undermining that strategy with policy U-turns, kite-flying tax ideas and timidity in areas like trade where it needs to be bold."

And while the Chancellor eventually succumbed to the pressure on pubs' business rates, hotels, restaurants and other hospitality businesses, who have also been hit by the business rate hikes, are now asking questions as to why they have not received such help.

The constant indecision has left Labour MPs frustrated.

On the most recent U-turns, one MP said: "There's no point defending anything remotely difficult the leadership announces, because it's likely to be rowed back on.

"Whatever the merits of individual policy, we're in a position where we can't ever say for sure it'll happen. Absolutely ridiculous."

Health Secretary Wes Streeting has also been a vocal critic.

"This excuses culture does the centre-left no favours," he told the media earlier this month.

"If we tell the public that we can’t make anything work, then why on Earth would they vote to keep us in charge?"

Businesses that claim to be facing "high" or "very high" uncertainty has climbed to 53 per cent under the Labour government, up from 50 per cent, according to data from the Bank of England.

In the think tank's report, the Government was encouraged to focus on trade, and also warned that the nation's GDP per head is equal to Italy's, despite boasting an eight per cent gap prior to the pandemic.

The UK's GDP has climbed just 0.8 per cent since its pre-pandemic peak - an increase of just 0.1 per cent per year.

This is compared to the average annual growth of 1.3 per cent in the decade before Covid.

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