Economy

Kwarteng’s mini-Budget was ‘divorced from reality’, says Aviva boss

Kwasi Kwarteng’s mini budget was “disconnected from reality,” says boss of insurance giant Aviva

The chief executive of insurance giant Aviva has described Kwasi Kwarteng’s mini-Budget as “separated from reality”.

Amanda Blanc’s remarks at a Labor business conference were the most candid response yet from a FTSE 100 boss to Kwarteng’s disastrous unfunded tax cut plan, announced in September but since reversed, which aimed to boost GDP.

Blanc said: “The market’s reaction to the mini-budget showed that political decisions cannot be separated from reality. We can’t just invent growth, we can’t just increase productivity by wishing it.’

Aviva chief exec Amanda Blanc (pictured) told a Labor business conference that achieving growth requires “an ambitious, far-reaching but achievable plan”

The comments came yesterday at a meeting of business leaders at an event chaired by Labor leader Sir Keir Starmer and Shadow Chancellor Rachel Reeves.

The party is trying to capitalize on the alarm caused by the mini-budget, which led to a market collapse, a £19bn intervention from the Bank of England and, ultimately, the collapse of Liz Truss’ premiership.

The Labor leader, who tried to woo bosses at the CBI conference in November, has met with more than 100 CEOs in the past six months.

The event at Canary Wharf was attended by 350 business executives, including Tesco chairman John Allan and ex-Sainsbury’s boss Justin King, a director at Marks and Spencer.

But Blanc’s comments could also be seen as a warning to Labor against a return to the economic unorthodoxy of Jeremy Corbyn, a legacy the current leadership is trying to bury.

According to her, achieving growth required ‘an ambitious, far-reaching but feasible plan’. “This is no time for wild experiments,” said Blanc. But now is the time for bold ideas and action.

“Each plan must provide the consistency, stability and predictability that are essential for any UK business to grow.” Labor’s conference also attracted sponsors including energy giant SSE and banking group HSBC.

Ian Stuart, HSBC’s UK boss, told the event: “The economic backdrop is challenging, perhaps as challenging as we’ve seen in many years.”

He said businesses in Britain had problems including recession, inflation and a tough market for hiring staff. “It’s no wonder business investment and confidence are low,” he said.

Plans unveiled yesterday by Labor to boost growth include a goal to increase venture capital investment in start-ups, in part by freeing up billions tied up in pension funds.

They came as the government today unveiled long-awaited plans dubbed “Big Bang 2.0” to cut red tape in the financial services industry.

They include weakening foreclosure rules introduced after the financial crisis to separate lenders’ high street banking arms from their riskier investment banking divisions.

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Jacky

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