Rachel Reeves is today urged to tell Britain’s regulators and quangos to ‘get out of the way’ as she asks for their help in reviving Britain’s stuttering economic growth.
The embattled Chancellor will today hold talks with leading regulators such as Ofcom, Ofgem and the Environment Agency, as she looks for ideas to boost growth.
Ministers asked them to offer suggestions in the wake of last year’s Budget, which triggered a sharp fall in business confidence.
However, they are said to be underwhelmed by the proposals so far, which appear to involve the bodies continuing to fulfil existing roles.
The Environment Agency, for example, has suggested its hand in building flood defences creates some jobs, while Ofcom has said it will continue to encourage the rollout of full fibre broadband.
Ms Reeves last night hinted she will push further, saying the Government was determined to ‘tackle the barriers to investment and deliver the necessary reforms to make Britain the best place to do business.
‘That includes looking at regulation across the piece and doing what is necessary to reform it’.
But writing in the Mail, shadow business secretary Andrew Griffith said the regulators were ‘the last place you will find the answers to getting growth’, adding that today’s meeting ‘smacks of desperation’.
‘It is more evidence she is out of ideas and out of her depth,’ he added.
The row came as better than expected inflation figures gave the Chancellor a brief respite after days of pressure from the financial markets.
The fall in inflation to 2.5 per cent in December from 2.6 per cent in November could pave the way for another interest rate cut next month.
Bank of England rate-setter Alan Taylor said that ‘right now . . . it makes sense to cut rates’ to boost the economy amid growing risk of a recession.
Michael Saunders, a former Bank official, told the BBC the fall in inflation would be greeted with a ‘sigh of relief’ at the Bank, in Downing Street and on financial markets.
Markets were also buoyed by US inflation figures which were slightly better than expected. That helped UK bonds, known as gilts, recover ground they lost during a sell-off at the start of this year. Government borrowing costs fell slightly after rising to the highest level for 27 years.
The surge in borrowing costs has triggered speculation that the Chancellor could break her ‘fiscal rules’ as soon as March unless she brings forward emergency spending cuts or tax rises.
Sir Keir Starmer yesterday refused to rule out further tax rises this year. But, following fierce criticism of the Budget, which raised taxes by a record
£40billion, he acknowledged that Labour ‘cannot just tax our way out’ of the current crisis.
Ms Reeves, who has been mocked as ‘Rachel from Accounts’, was branded ‘Rachel the Temp’ by one Labour MP yesterday, following speculation about her future.
But the Prime Minister told MPs that the Chancellor ‘will be in place for many, many years to come’.