Britain is “at the edge of a crisis” and Labour must “change tack” to revive the faltering economy, according to one of the country’s most respected business leaders.
Lord Stuart Rose, the former boss of Marks & Spencer and Asda, said “we should all be worried about the state of Britain” and called for “radical action” to restart growth and create jobs.
His stark warning came just a day after Sir Jim Ratcliffe’s Ineos revealed it had stopped investing in Britain altogether in protest at Labour’s tax hikes, diverting billions of pounds of capital to the US instead.
The criticism from two heavyweight figures piles pressure on Chancellor Rachel Reeves, who is already facing accusations that her £40bn programme of tax rises has derailed the economy.
Speaking on Times Radio, Lord Rose declared: “I believe we’re genuinely at the edge of a crisis. If we don’t take some radical action and take notice of what’s going on, we’re going to find ourselves in a very difficult spot.”
Rose said Labour had failed to deliver on its promise of making growth the government’s number one mission. “There isn’t a direction of travel,” he argued. “There is no travel. We’re actually standing still in a lay-by while we decide what to do.”
With the next Budget not due until 26 November, he warned Britain was “stuck for three months waiting with real anxiety” over what level of new taxes Reeves might impose.
Turning to Labour’s flagship Employment Rights Bill, Rose suggested the timing was wrong, saying the legislation would make it harder for firms to hire. “We’ve had a very flexible labour force. Why make it harder now?” he asked.
He also took aim at what he called a “sick note culture” after figures from the Chartered Institute of Personnel and Development showed UK staff are now taking almost two weeks off ill each year — the highest in 15 years. “We need a little bit of grit around the place,” Rose said. “This nation needs everybody to lean in.”
The intervention echoes growing unease in the business community. Ineos Energy boss Brian Gilvary told The Telegraph this week: “We have stopped investing in Britain. Our future investment will not be in the UK.”
Ineos has already closed its century-old Grangemouth oil refinery in Scotland, cutting more than 400 jobs, and warned its petrochemicals plant there is also at risk. The company operates key North Sea assets, including the Forties Pipeline System which carries 30 per cent of the UK’s oil to shore.
Gilvary cited Labour’s extension of the windfall tax on oil and gas profits, which raised the effective rate on producers to 78 per cent, as proof that Britain has become “one of the most unstable fiscal regimes in the world”. He contrasted that with the United States, where Ineos has ploughed £2.2bn into new projects and where, he said, policy stability underpins energy security.
Sir Jim, whose wealth is estimated at £17bn and who recently became a co-owner of Manchester United, warned earlier this year that Labour was “squeezing the life out of our abundant energy reserves in the North Sea” and that Britain risked increasingly frequent blackouts.
The backdrop has fuelled speculation that Reeves may need to raise another £20bn–£30bn in the autumn to meet her fiscal rules. Economists have even floated comparisons with the Labour government of 1976, when Britain was forced into a bailout by the International Monetary Fund.
The Chancellor has pledged not to raise income tax, VAT or employee national insurance, leaving business levies as her main lever. But business groups, from the British Retail Consortium to the CBI, have warned that piling costs onto employers risks choking off growth just as the economy flatlines.
Conservative critics seized on Rose’s intervention. Claire Coutinho, the shadow energy secretary, said: “Sir Jim Ratcliffe is right — sky-high energy prices and crippling carbon taxes are causing the death of British industry. Labour must put growth and jobs ahead of its obsession with Net Zero.”
With the autumn Budget looming, Labour faces a delicate balancing act: keeping markets calm, meeting its fiscal rules, and responding to mounting anger from both employers and voters who feel squeezed.
As Lord Rose put it bluntly: “If you have no growth, you can’t create wealth. If you can’t create wealth, you can’t provide the services people want. That’s the real problem.”
