‘As they walk a tightrope, retailers wonder how Reeves’ vision for growth applies to them’

The pace at which chancellor Rachel Reeves has lost the backing of an entire nation of business leaders is nothing short of astounding. Pre-October there was hope and optimism. Industry leaders felt consulted and listened to by Labour in the election run-up.

Fast forward 12 weeks, and the prevailing mood is one of disparagement and despair, accompanied by more than a hint of blame. It’s interesting to observe how every negative business announcement – be it redundancies, store closures or profit warnings is coupled with a not-so-subtle side-swipe.

Take Sainsbury’s announcement last week. Chief executive Simon Roberts announced plans to cut 3,000 jobs in an ongoing bid to remove £1bn of costs as the grocer heads into a “particularly challenging cost environment”.

In the same week, Morrisons chief executive Rami Baitieh pointed to the “avalanche of costs” hitting businesses as he cut 200 jobs from the head office people team. To what extent is this a direct response to the Budget or the outcome of a logical business review?

This week, Tesco revealed hundreds of job cuts. In the coming weeks, it will be interesting to look beyond chief executives’ open government criticisms and decipher what exactly is prompting these decisions.

Equally, who can blame leaders for wanting to constantly remind the government of the impossible trading environment it is creating. Reeves has made herself an easy target. Her Budget has made her appear not only disingenuous after leaders felt supported by Labour’s pre-election promises, but also entirely lacking in commonsense.

No one in British industry can quite fathom how Reeves can still argue that she is committed to creating economic growth when businesses are now loaded with so much more cost

Lord Wolfson’s use this week of his House of Lords position to lodge amendments to Reeves’ national insurance increases represents the mood of the retail nation. The anger has stemmed largely from the pace of change.

Reeves was dealt a bad hand and many would accept that national insurance changes needed to happen. But what many more can’t accept is the lack of time to prepare and integrate any kind of mitigation plan into their strategies.

The Treasury statement reads as follows: “We delivered a once-in-a-parliament Budget to wipe the slate clean and deliver the stability businesses so desperately need while not increasing taxes in people’s payslips. By bringing back political and financial stability, we are creating the conditions for economic growth.”

The level of stability at present feels more akin to that of walking a tightrope. Any kind of growth plan seems haphazard. Hot on the heels of some platitudes around the UK becoming an AI superpower, the government has announced plans to create ‘Europe’s Silicon Valley’ and for a controversial Heathrow expansion.

The retail industry, meanwhile, is left pondering how the vision for growth applies to them – an industry worth more than £100bn to the UK GDP. What’s the collective goal? Where’s the hope? That’s what is missing from Labour at present. Retailers would be more willing to stomach the pain if they could recognise a higher cause and were rallying to deliver on a plan that would reap rewards in the medium to long term. Instead, it’s just one metaphorical slap to the face after another.

It’s not too late for this relationship to be salvaged. The deep and sudden cracks that have appeared between Labour and British industry can be healed with some olive branches of very weighty proportions.

Business rates would be the obvious place to start. Red tape reduction is another. Every week that goes by, the mood worsens. Without that clear pathway to growth and stability, and perhaps a hefty dose of relationship counselling thrown in for good measure, the two sides may well find themselves heading for an irretrievable breakdown.