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Labour is facing a drop off in confidence among business leaders amid plans for tax rises and improvements to workers’ rights, according to a survey.

The Institute of Directors (IoD) had noted a leap in optimism in July among its membership as the new government came to power.

But its latest economic confidence index showed a slump from a three-year high, falling into negative territory in August.

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Major indicators to show the biggest declines included business investment and employment.

Others to fall back were expectations for revenue, exports and wages.

Recent data has shown the UK economy to have the fastest economic growth in the G7 over the first half of the year.

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Prime minister Sir Keir Starmer and his chancellor Rachel Reeves have made securing growth the “top priority” but complain their plans are being complicated by a legacy £22bn black hole in the public finances.

“Tough choices” they have already announced, ahead of the 30 October budget, have included cutting winter fuel payments for all pensioners.

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Chancellor quizzed over tax rises

Critics argue the tough choices include caving in to union demands to avert strikes, racking up a £9bn bill across public sector pay awards.

Commentators widely expect hikes to wealth taxes, such as capital gains tax, in the budget as it would chime with Sir Keir’s warning last month that those with the broadest shoulders would face the greatest burden.

An Employment Rights Bill is also due to prohibit zero-hour contracts and ban so-called fire and rehire tactics.

One particular sector to raise fears of an own goal was energy.

Industry body Offshore Energies UK claimed government plans to increase a windfall tax on North Sea oil and gas producers would lead to a £12bn fall in revenue to the state, due to weaker production and investment.

The IoD survey findings represent a major turnaround in opinion.

Ms Reeves secured a strong relationship with business in the run up to the election as firms ran out of patience with the Conservatives, long complaining of a lack of communication and strategy.

IoD chief economist Anna Leach said of its findings: “It’s disappointing to see last month’s welcome uptick in business leader confidence snuffed out over the summer.

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Reeves’ black hole claim ‘not credible’

“It is notable that the sharpest drops in our economic measures are in investment and headcount expectations, whilst other measures have moved to a lesser degree, albeit in a likewise negative direction.

“The newsflow in recent weeks on employment rights and autumn tax rises has dented confidence in the environment for business in the UK.

“As we head into a busy autumn, we are calling on the government to take time to get policy design right for the long-term and deliver the stable tax and policy framework needed to drive business confidence and investment.

“Further clarity on the industrial strategy and the business tax roadmap, in conjunction with more progress in engaging with business on workers’ rights, would be welcome.”

The findings chime with warnings that the budget should not seek to rake in cash at the expense of the economy.

Former president of the CBI, the Cobra beer founder Lord Bilimoria, said fears of tax increases would spark an exodus.

Read more:
Economy could have crashed without winter fuel action, minister claims
Which tax hikes could Labour introduce?

He called on the government to concentrate on growth, calling any rise in capital gains tax “a short-sighted move”.

“Investors are not going to come here if you keep putting up taxes,” he told the Daily Mail.

“It will not bring in more money; in fact, money will fly from this country.”

His comments were echoed by lastminute.com co-founder Brent Hoberman, who told the newspaper it “does not make sense to scare off business investment”.

Watch Business Live with Ian King at 11.30am and 4.30pm on Sky News.

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Labour WhatsApp messages on Supreme Court ruling point to future tensions on trans issues

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Labour WhatsApp messages on Supreme Court ruling point to future tensions on trans issues

It’s no great surprise that members of a Labour MPs’ LGBT+ WhatsApp group would be raising concerns about the impact of this week’s Supreme Court ruling on the trans community.

But the critical contributions reportedly made by some of the group’s higher-profile ministerial members highlight the underlying divisions with the Labour Party over the issue – and point to future tensions once the practical implications of the judgement become clear.

Messages leaked to the Mail on Sunday allegedly include the Home Office minister Dame Angela Eagle writing “the ruling is not as catastrophic at it seems but the EHRC [Equality and Human Rights Commission] guidance might be & there are already signs that some public bodies are overreacting”.

Culture minister Sir Chris Bryant reportedly replied he “agreed” with another MP’s opinion that the EHRC chair Baroness Falkner was “pretty appalling” when she said the ruling would mean trans women could not use single-sex female facilities or compete in women’s sports.

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Gender ruling – How it happened

Government sources argue these messages are hardly evidence of any kind of plot or mass revolt against the Supreme Court’s ruling.

But they still raise uncomfortable questions for a party that has been on a tortuous journey over the issue.

Under Jeremy Corbyn, Labour was committed to introducing self-identification – enabling people to change their legal sex without a medical diagnosis – a position dropped in 2023.

Back in 2021, Sir Keir Stamer said the then Labour MP Rosie Duffield was “not right” to say “only women have a cervix”. But three years later he acknowledged that “biologically, she of course is right”.

Duffield, who now sits as an independent, is asking for an apology – but that doesn’t seem to be forthcoming from a government keen to minimise its own role in changing social attitudes to the issue.

The Conservative position on this has also chopped and changed – with Theresa May‘s support for gender self-ID ditched under Boris Johnson.

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As the Conservatives’ equalities minister, Kemi Badenoch led the UK government’s fight against Scotland’s efforts to make it easier to change gender – and she’s determined to punch Labour’s bruise on the issue.

This weekend, she’s written to the cabinet secretary calling for an investigation into a possible breach of the ministerial or civil service code over a statement made by the Education Secretary Bridget Phillipson in response to the ruling, which said “we have always supported the protection of single-sex spaces based on biological sex”.

The Tories claim this is false, because last summer Ms Phillipson herself gave an interview in which she suggested that trans women with penises could use female toilets.

Ms Phillipson has been approached for a response.

Her comments, however, are entirely in keeping with the government’s official statement on the judgement, which claims they have “always supported the protection of single-sex spaces based on biological sex” and welcomed the ruling as giving “clarity and confidence for women and service providers”.

The government statement added: “Single-sex spaces are protected in law and will always be protected by this government.”

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‘Crypto is not communism’ — Exec slams BIS’ take on crypto

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‘Crypto is not communism’ — Exec slams BIS’ take on crypto

‘Crypto is not communism’ — Exec slams BIS’ take on crypto

The Bank for International Settlements’ (BIS) push to isolate crypto markets and its controversial recommendations on DeFi and stablecoins is “dangerous” for the entire financial system, warns the head of a blockchain investment firm.

“Many of their recommendations and conclusions — perhaps due to a mix of fear, arrogance, or ignorance — are completely uninformed and, frankly, dangerous,” CoinFund president Christopher Perkins said in an April 19 X post, referring to the BIS’ April 15 report titled “Cryptocurrencies and Decentralized Finance: Functions and Financial Stability Implications.” 

BIS recommendations exposes TradFi to risks of “unimaginable scale”

“Crypto is not communism,” Perkins said, pushing back against the BIS’ call for a “containment” approach to isolate crypto from traditional finance and the broader economy.

“It’s the new internet that provides anyone with a connection access to financial services,” Perkins said. “You cannot control it anymore than you control the internet,” he added.

Perkins warned that a containment approach to crypto would expose the traditional financial system to massive liquidity risks “of unimaginable scale,” especially when the crypto market operates in real-time, 24/7, while traditional financial markets shuts down after trading hours.

“If implemented they will cause–not mitigate–the systemic risk they seek to prevent.”

The report warned that the number of investors and amount of capital in crypto and DeFi have “reached a critical mass,” with investor protection becoming a “significant concern for regulators.”

Cryptocurrencies
Source: Michael Egorov

Perkins pushed back against the BIS’ claim that DeFi presents significant challenges, arguing instead that it represents a “significant improvement” over the “opacity” and imbalances of the traditional financial system.

Related: Crypto industry is not experiencing regulatory capture — Attorney

Responding to the BIS’s concern about the anonymity of DeFi developers, Perkins questioned its relevance:

“Sorry, but when was the last time a TradFi company published a list of its developers? Sure, public companies provide a degree of disclosures and transparency, but they seem to be dying off in favor of private markets.”

Perkins also critiqued the BIS’s concern around stablecoins that it could lead to “macroeconomic instability in countries like Venezuela and Zimbabwe.”

“If there is demand for USD stablecoins and it helps improve the condition of anyone in the developing world, perhaps that is a good thing,” Perkins said.

Cryptocurrencies
Source: Christopher Perkins

Perkins wasn’t alone in criticizing the controversial report. Lightspark co-founder Christian Catalini also weighed in, posting a series of critiques on X that same day. Catalini summed up the report with the analogy:

“Think: writing parking regulations for a fleet of self‑driving drones — earnest work, two technological leaps behind.”

Magazine: Altcoin season to hit in Q2? Mantra’s plan to win trust: Hodler’s Digest, April 13 – 19

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The British economy has lost out – and sucking up to Trump will only get Starmer so far

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The British economy has lost out - and sucking up to Trump will only get Starmer so far

Unwary travellers returning from the EU risk having their sandwiches and local delicacies, such as cheese, confiscated as they enter the UK.

The luggage in which they are carrying their goodies may also be seized and destroyed – and if Border Force catch them trying to smuggle meat or dairy products without a declaration, they could face criminal charges.

The new jeopardy has come about because last weekend, the government quietly “extended” its “ban on personal meat imports to protect farmers from foot and mouth”.

This may or may not be bureaucratic over-reaction.

It’s certainly just another of the barriers EU and UK authorities are busily throwing up between each other and their citizens – at a time when political leaders keep saying the two sides should be drawing together in the face of Donald Trump’s attacks on European trade and security.

Starmer and Macron meeting at Chequers last month. Pic: Reuters
Image:
Keir Starmer’s been embarking on a reset with European leaders. Pic: Reuters

The ban on bringing back “cattle, sheep, goat, and pig meat, as well as dairy products, from EU countries into Great Britain for personal use” is meant “to protect the health of British livestock, the security of farmers, and the UK’s food security.”

There are bitter memories of previous outbreaks of foot and mouth disease in this country, in 1967 and 2001.

In 2001, there were more than 2,000 confirmed cases of infection resulting in six million sheep and cattle being destroyed. Footpaths were closed across the nation and the general election had to be delayed.

In the EU this year, there have been five cases confirmed in Slovakia and four in Hungary. There was a single outbreak in Germany in January, though Defra, the UK agriculture department, says that’s “no longer significant”.

The UK imposed bans on personal meat and dairy imports from those countries, and Austria, earlier this year.

Authorities carry disinfectant liquid near a farm during an outbreak of foot-and-mouth disease in Dunakiliti, Hungary. Pic: Reuters
Image:
Authorities carry disinfectant near a farm in Dunakiliti, Hungary. Pic: Reuters

Better safe than sorry?

None of the cases of infection are in the three most popular countries for UK visitors – Spain, France, and Italy – now joining the ban. Places from which travellers are most likely to bring back a bit of cheese, salami, or chorizo.

Could the government be putting on a show to farmers that it’s on their side at the price of the public’s inconvenience, when its own measures on inheritance tax and failure to match lost EU subsidies are really doing the farming community harm?

Many will say it’s better to be safe than sorry, but the question remains whether the ban is proportionate or even well targeted on likely sources of infection.

Read more: The products you can’t bring into Britain from the EU

Gourmet artisan chorizo sausages on display on a market stall. File pic: iStock
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No more gourmet chorizo brought back from Spain for you. File pic: iStock

A ‘Brexit benefit’? Don’t be fooled

The EU has already introduced emergency measures to contain the disease where it has been found. Several thousand cattle in Hungary and Slovenia have been vaccinated or destroyed.

The UK’s ability to impose the ban is not “a benefit of Brexit”. Member nations including the UK were perfectly able to ban the movement of animals and animal products during the “mad cow disease” outbreak in the 1990s, much to the annoyance of the British government of the day.

Since leaving the EU, England, Scotland and Wales are no longer under EU veterinary regulation.

Northern Ireland still is because of its open border with the Republic. The latest ban does not cover people coming into Northern Ireland, Jersey, Guernsey, or the Isle of Man.

Rather than introducing further red tape of its own, the British government is supposed to be seeking closer “alignment” with the EU on animal and vegetable trade – SPS or “sanitary and phytosanitary” measures, in the jargon.

Various types of cheese. Pic: iStock
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A ban on cheese? That’s anything but cracking. Pic: iStock

UK can’t shake ties to EU

The reasons for this are obvious and potentially make or break for food producers in this country.

The EU is the recipient of 67% of UK agri-food exports, even though this has declined by more than 5% since Brexit.

The introduction of full, cumbersome, SPS checks has been delayed five times but are due to come in this October. The government estimates the cost to the industry will be £330m, food producers say it will be more like £2bn.

With Brexit, the UK became a “third country” to the EU, just like the US or China or any other nation. The UK’s ties to the European bloc, however, are much greater.

Half of the UK’s imports come from the EU and 41% of its exports go there. The US is the UK’s single largest national trading partner, but still only accounts for around 17% of trade, in or out.

The difference in the statistics for travellers are even starker – 77% of trips abroad from the UK, for business, leisure or personal reasons, are to EU countries. That is 66.7 million visits a year, compared to 4.5 million or 5% to the US.

And that was in 2023, before Donald Trump and JD Vance’s hostile words and actions put foreign visitors off.

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Trump: ‘Europe is free-loading’

More bureaucratic botheration

Meanwhile, the UK and the EU are making travel between them more bothersome for their citizens and businesses.

This October, the EU’s much-delayed EES or Entry Exit System is due to come into force. Every foreigner will be required to provide biometric information – including fingerprints and scans – every time they enter or leave the Schengen area.

From October next year, visitors from countries including the UK will have to be authorised in advance by ETIAS, the European Travel and Authorisation System. Applications will cost seven euros and will be valid for three years.

Since the beginning of this month, European visitors to the UK have been subject to similar reciprocal measures. They must apply for an ETA, an Electronic Travel Authorisation. This lasts for two years or until a passport expires and costs £16.

The days of freedom of movement for people, goods, and services between the UK and its neighbours are long gone.

The British economy has lost out and British citizens and businesses suffer from greater bureaucratic botheration.

Nor has immigration into the UK gone down since leaving the EU. The numbers have actually gone up, with people from Commonwealth countries, including India, Pakistan and Nigeria, more than compensating for EU citizens who used to come and go.

Focaccia sandwiches with prosciutto. Pic: iStock
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Editor’s note: Hands off my focaccia sandwiches with prosciutto! Pic: iStock

Will European reset pay off?

The government is talking loudly about the possible benefits of a trade “deal” with Trump’s America.

Meanwhile, minister Nick Thomas Symonds and the civil servant Mike Ellam are engaged in low-profile negotiations with Europe – which could be of far greater economic and social significance.

The public will have to wait to see what progress is being made at least until the first-ever EU-UK summit, due to take place on 19 May this year.

Hard-pressed British food producers and travellers – not to mention young people shut out of educational opportunities in Europe – can only hope that Sir Keir Starmer considers their interests as positively as he does sucking up to the Trump administration.

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