Millionaire Iceland boss supporter blasts Labour’s economic system claims

The Labour-supporting millionaire boss of the Iceland food chain has launched a scathing attack on its ‘doom-laden’ economic prophesies for Britain.

Richard Walker switched his backing from the Tories earlier this year saying Sir Keir Starmer’s party was ‘the right choice’ for his customers.

And he happily posed with both Sir Keir and Chancellor Rachel Reeves outside his stores during the election campaign.  

But he today warned against introducing a swathe of business tax increases in the Budget next month, warning UK PLC is ‘not a lemon that can keep being squeezed without any adverse impact on employment or consumers’.

Both Sir Keir and Ms Reeves have made repeated speeches and remarks about the poor state of the nation’s economy, with critics suggesting they are fattening the public up to accept tax rises.

But writing in the Sun on Sunday Mr Walker warned that ‘the doom-laden warnings … set a rather different tone from Labour‘s pre-election pledges to be unashamedly pro-business and pro-growth’.

‘A positive and optimistic Budget next month could set us on the path to future prosperity by leveraging the power of the state to invest in long-term projects and people skills that will drive economic growth, which will in turn stimulate increased investment bythe private sector, he said.

‘There is everything to play for.  But the Tories have already imposed the highest tax burden the UK has ever seen, and Government must recognise that business is already bearing heavy costs.’

Mr Walker, the executive chairman of the supermarket and a former Tory donor, quit the Conservative party last October in a blow to Rishi Sunak. 

He switched his support to Labour in January, accusing the Tories of having ‘failed the nation’. 

Writing in The Guardian, he said: ‘Labour is the right choice for the communities across the country where Iceland operates – and the right choice for everyone in business who wants to see this country grow and prosper.’ Mr Walker, who had previously sought to become a Tory parliamentary candidate, said it was the Conservative party rather than him that had changed. 

He used the Guardian article to praise Sir Keir for having ‘transformed’ his party in the wake of Jeremy Corbyn’s leadership and said the Labour leader understands pressures facing households.

Sir Keir and Ms Reeves have been making clear there is more pain to come in the Budget on October 30, with inheritance tax, capital gains and tax breaks on pensions in the crosshairs. 

Last week Labour’s attempts to blame the Tories for the dire debt outlook were slapped down by the fiscal watchdog yesterday.

The Office for Budget Responsibility warned Sir Keir Starmer‘s Government that simply hiking taxes would not fix the public finances.

In a new forecast, the OBR said debt was on course to ‘blow up’ as it balloons to a staggering 274 per cent of the size of the economy over the next 50 years. An ageing population is expected to drive the increase by pushing up spending on the health service and pensions – while climate change is also a factor.

Unexpected global shocks comparable to the Covid-19 pandemic could lift the debt even further, to more than 300 per cent of gross domestic product (GDP) by 2074, the report warned.

Labour sought to blame the Tories, and use the figures as more ammunition to pile on the pain with ‘tough choices’ in next month’s Budget.

The slapdown is embarrassing for Labour at a time when Chancellor Rachel Reeves has pledged to toughen the OBR’s role in scrutinising the public finances, claiming the Tories left her with a £22 billion ‘black hole’ when she took office in July.

UK debt stands at £2.75 trillion, or 99.4 per cent of GDP – the highest level since the early 1960s. The OBR forecasts major long-term pressures coming from higher health spending – nearly doubling from 7.6 per cent to 14.5 per cent of GDP – and the state pension bill rising from 5.2 per cent to 7.9 per cent.

And the cost of servicing the surging debt pile will quadruple from 2.8 per cent of GDP to 11.3 per cent. Added to that will be the price of climate change – including the cost of Net Zero and coping with the damage caused by severe weather.

OBR board member David Miles said: ‘With unchanged policies and growth mediocre to poor… something’s got to give.’

The government is also facing accusations of trying to hide from the ‘horrific’ impact of the decision to strip winter fuel payments from millions of pensioners.

More than 80 per cent of people aged 80 and over will lose out, as will more than 70 per cent of pensioners.

Even among those who should still receive the payments, worth up to £300, an estimated 780,000 will miss out because they have not claimed pension credit.

The figures were quietly slipped out on Friday night, which shadow Treasury chief secretary Laura Trott said was a ‘downright disgrace’.

Downing Street has said that a full impact assessment of the change, coming into effect this year, has not been carried out.

The Department for Work and Pensions released figures, published in response to a freedom of information request, are based on ‘equality analyses’ which ‘are not impact assessments and not routinely published alongside secondary legislation’.

From this winter, only people on pension credit or certain other benefits will receive the payments, while about 10 million others are set to be stripped of the allowance.

The Government has insisted the move is necessary to help fill a ‘£22 billion black hole’ in the public finances inherited from the Tory government.

Around 71 per cent of those with a disability and 83 per cent of those aged 80 or over will now miss out on the payment.

However, in its FOI response, the DWP said that while those with a disability will be disproportionately likely to retain the payment, ‘around 71 per cent – 1.6 million – of people with a disability will still lose entitlement’.

And about 880,000 people currently set to lose the benefit this year are pensioners entitled to pension credit who have not claimed it, according to the analysis.

The assessment assumes a five percentage point ‘loss aversion’ increase in pension credit take-up, which the DWP said then cuts the number of eligible pensioners failing to claim to about 780,000.