The unexploded bombs facing Reeves

17 Apr 2025

The chancellor’s rosy forecasts looks like being painfully shortlived as a summer reckoning looms.

Whilst Rachel Reeves chose to boast about higher growth and increased defence spending, she failed to address the elephant in the room.

Angela Rayner’s overhaul of workers rights has not yet been assessed by Britain’s tax and spending watchdog-and it threatens to render the chancellors economic forecasts redundant in months.

In a stark warning the OBR signalled that the new rules will have “material” and probably negative impacts on the economy.

Rayner claims her plans will end the “exploitative” zero-hour contracts and make flexible working the “default” for all will lead to a more happier and more productive workforce.

Reeves defended the plans on Wednesday during her emergency budget.

“We are confident that it will result in ordinary people having more money in their pockets but also having the security to spend the money because they don’t have to worry from week to week about whether they will be in work or how many hours they will get” she said.

In direct contradiction with the government businesses remain alarmed about the likely impact on growth and jobs, warning that the changes will strangle businesses with red tape and undermine efforts to tackle Britain’s benefits crisis.

The OBR agrees with business.

“Employment regulation that affects the flexibility of businesses and labour markets or the quantity and quality of work will likely have material, and probably net negative, economic impacts on employment, prices, and productivity” it says.

In other words, while Labour say they want to make work pay, the proposals will probably result in lower growth, higher prices and hit living standards.

This is an unexploded bomb which will kill growth and tip the economy in to recession.

It seems like every Labour government in history, this one will leave the economy in a worse state than they found it coming in to office.