Andy Haldane: Labour has ‘no nose for business’
The Labour government lacks anyone with a “nose for business”, Andy Haldane, the former chief economist of the Bank of England, has said in his latest critique against ministers’ quest for growth.
Haldane, whose criticism of Budget leaks last year added to pressure on Rachel Reeves, has taken aim at ministers leading Labour’s growth mission over their lack of experience in the private sector.
In an interview with LBC, he said multiple U-turns have come as a result of poor planning and evaluation, adding that his new role as president of the British Chambers of Commerce was “important in leading the growth charge”.
“There’s no nose for business,” he said. “I think within…this government, [there is] no sense of what works.
“You mentioned the 13 U-turns. Many of those have been failures of design. Business rates is a case in point. They haven’t fully fathomed the consequences for business before they’ve announced and that’s been a big mistake.”
Haldane suggested that ministers and advisers would have to be replaced in order for the government to change course.
He said the UK economy was still “flying below its cruising altitude” and advocated making defence a cornerstone of any growth strategy.
“We have now set out a very sedate path for increasing defence spending, which is way out of line of what the world and the UK needs, you know, from 2.3 to 2.5 and to 3.5 within 10 to 10 years. That’s far too slow. We could use defence as our centrepiece of a growth and jobs strategy.”
China deal
During his interview, Haldane also endorsed government efforts to build trading relationships with China.
Keir Starmer is set to visit Beijing this week with business delegates from the likes of GSK and HSBC.
Countries have been warned off forging closer ties with the world’s second largest economy given its security threats to Taiwan and cyber activity while President Trump has vowed to impose higher tariffs on allies including Canada for signing trade deals.
Haldane suggested Trump’s threat against Canada was a “cautionary tale” but the country could still boost the UK economy.
“The reality is that both this government, indeed this country, is lacking friends right now, trade and otherwise,” Haldane said.
“Looking to places where we can export more, including China, will be important and I applaud that effort.”
Haldane’s business warning
Haldane’s comments may put some ministers on alert as the slow pace of delivery and questions over strategy have been blamed for low growth.
On the weekend, business secretary Peter Kyle called for civil servants’ salaries to be linked to GDP data, a demand that has previously been made by shadow business secretary Andrew Griffith.
Chief secretary to the prime minister Darren Jones announced last week that bonuses for high-performing civil servants would also be boosted, which is also a policy backed by Reform UK.
Businesses may need more urgent action as recent survey data has continued to point to a lack of recovery in the UK economy.
The Confederation of British Industry (CBI) latest growth indicator showed that private sector activity in the three months to January weakened while expectations for the next three months remained negative.
Alpesh Paleja, deputy chief economist at the CBI, said the UK economy had “not experienced a strong start to 2026”.
“Recent geopolitical tensions will only have added to uncertainty at the margin,” Paleja added.