Rachel Reeves’ budget circus is driving British manufacturing to the brink, writes Richard Holden MP

From transport and infrastructure to manufacturing and export, uncertainty has become the defining feature of this Carry On Government, defined by U-turn after U-turn and policy announcements made on the hoof.

As Shadow Transport Secretary, I see the real-world consequences of this instability day in, day out.

Last week I spent many hours meeting with some of the UK’s leading car manufacturers, from British brands with generations-old reputations to giants within the European automotive sector.

Ahead of this week’s Budget, I wanted to get a clearer sense of how they were feeling about the Government’s economic direction.

Like businesses across the country, they are reeling from the ramifications of the Treasury’s self-sabotaging briefings, where one disastrous tax-raising policy after another has been unceremoniously shoved out, with enough policy kites in the air to resemble the closing scene of Mary Poppins.

Far from reassurance, what these companies feel is an overwhelming dread and a deep and genuine unease at what lurks behind the curtain.

I was therefore astonished to hear the Industry Minister lecture them that all would be well. That they would be safe.

That the Government’s forthcoming ten-year industrial strategy would supposedly sweep away the problems facing British manufacturing as we step into this so-called new frontier of automotive innovation.

The Minister also spoke confidently about the need for productivity gains. On that point, at least, he is correct. Productivity gains in this country have slowed, and they have to pick up again.

But rather than reassurance, all that lies before industry leaders is a Pandora’s box of rising costs, regulatory burden and a smorgasbord of tax rises.

One leading car manufacturer could not be clearer: the Government’s ten-year industrial strategy simply does not matter, because at the current rate, mass car manufacturing in Britain will be gone long before ten years is up.

The backdrop to this crisis is no accident. It is the direct product of government policy. Soaring energy costs driven by Ed Miliband’s deeply damaging approach to energy policy have created the absurd spectacle of Britain paying Norway for North Sea oil extracted just a short stretch from our own waters, while British fields lie dormant, relics of a self-defeating ideological obsession.

Manufacturers also spoke of the chilling impact of the proposed pay-per-mile tax. A tax the Transport Secretary attempted to rule out, only to be contradicted by sources within her own department.

This is, after all, the Department that lost a Transport Secretary for lying to the police and saw a Roads Minister sacked and rehired nine days later. So it is little wonder that its Game of Thrones-style briefing wars have now translated into real-world economic damage.

Since that leak, cars already ordered are now sitting idle in factories as customers cancel or delay purchases. That damage is real, immediate, and entirely the Government’s fault.

On top of Labour’s Jobs Tax, the sharp rise in business rates and an Employment Rights Bill will cost the sector millions.

One leading UK manufacturer told me plainly that these new employment measures would dwarf even the highly punitive increase in National Insurance contributions.

The manufacturing sector now stands at its lowest ebb in decades. The concerns around the Budget have reached a clamour from those who actually go out and build, employ, and innovate in this country.

Yet from Government there is not even a flicker of self-awareness, let alone recognition of their role in this managed decline.

The stakes this week could not be higher. If we are to keep the plants that the Prime Minister visits for his PR stunts going, if we are to keep any meaningful automotive presence in the UK at all, then the Government must change course.

We need policy that lifts British manufacturing, not one that systematically dismantles it under the pursuit of Net Zero. We need a Government that recognises you cannot simply tax and borrow your way to prosperity, nor regulate your way to growth.

What Britain so desperately requires is a pro-business environment that rewards risk taking, builds confidence, unlocks growth, and champions innovation.

We will soon see at the Budget whether Ministers have the backbone to make that choice.

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Richard Holden is the Shadow Transport Secretary

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