Labour-supporting millionaire Iceland boss slams Keir Starmer’s ‘doom-laden’ economic claims and warns Rachel Reeves that business is ‘not a lemon to be squeezed’

The Labour supporter and millionaire boss of the Icelandic supermarket chain has launched a scathing attack on the “ominous” economic forecasts for Britain.

Richard Walker switched from the Conservative Party to the Conservative Party earlier this year, saying Sir Keir Starmer’s party was “the right choice” for his clients.

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

But he warned today against introducing a raft of corporation tax increases in next month’s budget, warning that UK PLC “is not a lemon that you can squeeze and squeeze without negatively affecting jobs or consumers”.

Both Sir Keir and Ms Reeves have made repeated speeches and comments about the poor state of the country’s economy, with critics claiming they are fattening up the population to accept tax increases.

But Walker warned in the Sun on Sunday that “the ominous warnings … set a very different tone to Labour’s pre-election promises to be unashamedly pro-business and pro-growth”.

Richard Walker switched from the Conservative Party to the Conservative Party earlier this year, saying Sir Keir Starmer’s party was “the right choice” for his clients.

Both Sir Keir and Ms Reeves have made repeated speeches and comments about the poor state of the country’s economy, with critics claiming they are fattening up the population to accept tax increases.

“A positive and optimistic budget next month could set us on a path to future prosperity, by harnessing the power of the state to invest in long-term projects and social skills that boost economic growth. This in turn will lead to more private sector investment,” he said.

‘There is still much to be done. But the Tories have already imposed the highest tax burden the UK has ever seen, and the government must recognise that businesses are already bearing a high cost.’

Mr Walker, the supermarket’s executive chairman and a former Conservative Party donor, left the Conservative Party in October last year in a setback for Rishi Sunak.

In January he switched to Labour, accusing the Tories of “letting the nation down”.

In an article in The Guardian, he wrote: ‘Labour is the right choice for the communities in the country where Iceland operates – and the right choice for everyone in business who wants to see this country grow and prosper.’ Walker, who previously stood for parliament as a Conservative Party candidate, said it was the Conservative Party that had changed, not him.

He used the Guardian article to praise Sir Keir for “transforming” his party after Jeremy Corbyn’s leadership and said the Labour leader understands the pressures households are under.

Sir Keir and Ms Reeves have made it clear that the 30 October Budget will hurt even more, with inheritance tax, capital gains tax and pension tax breaks at stake.

Attempts by Labour to blame the Conservatives for the poor outlook for the national debt were rejected by the fiscal watchdog last week.

The Office for Budgetary Responsibility warned Sir Keir Starmer’s government that simply raising taxes would not save the public finances.

In a new forecast, the OBR said debt was set to “explode” as it rose to a staggering 274 percent of the size of the economy over the next 50 years. An ageing population is expected to fuel the increase by boosting spending on healthcare and pensions, while climate change is also a factor.

Unexpected global shocks similar to the Covid-19 pandemic could push government debt even higher, to more than 300 percent of gross domestic product (GDP) by 2074, the report warns.

Labour tried to blame the Tories and use the figures as extra ammunition to increase the pain with “tough choices” in next month’s Budget.

The OBR warned that drastic measures would push spending above 60 percent of GDP by the 2070s.

If productivity is not significantly increased, the problem would be even more dramatic

The punishment is embarrassing for Labour, given that Chancellor of the Exchequer Rachel Reeves has promised to strengthen the OBR’s role in overseeing the public finances, a move she says left her with a £22bn “black hole” when she took office in July.

The UK’s debt stands at £2.75 trillion, or 99.4 per cent of GDP – the highest level since the early 1960s. The OBR predicts major long-term pressures from higher spending on health – almost 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 mountain of debt will quadruple from 2.8 percent of GDP to 11.3 percent. And then there’s the price of climate change – including the costs of Net Zero and dealing with the damage caused by extreme weather.

David Miles, a member of the OBR board, said: ‘Given unchanged policy and moderate to poor growth… something needs to be done.’

The government has also been accused of trying to hide the “terrible” consequences of the decision to deprive millions of pensioners of their winter fuel payments.

More than 80 percent of people over 80 and more than 70 percent of retirees are making losses.

Even of those who should still be receiving a benefit of up to £300, an estimated 780,000 people will miss out on the benefit because they have not claimed pension credit.

The figures were released quietly on Friday evening in what Laura Trott, the shadow finance minister, called an “utter disgrace”.

Downing Street has said a full impact assessment has not yet been carried out on the change, which comes into effect this year.

The Department for Work and Pensions published figures published in response to a Freedom of Information request. These figures are based on ‘equality analyses’ which ‘are not impact assessments and are not routinely published with secondary legislation’.

From this winter onwards, only people who receive an AOW benefit or other benefit will receive it, while approximately 10 million others will lose their benefits.

The government has stressed that the measure is needed to plug the “£22 billion black hole” in the public finances inherited from the Conservative government.

About 71 percent of people with disabilities and 83 percent of people aged 80 or older will now miss out on benefits.

However, in its response to the FOI, the DWP stated that while disabled people will disproportionately continue to receive benefits, ‘around 71 per cent (1.6 million) of disabled people will still lose their entitlement’.

According to the analysis, approximately 880,000 people who will lose their benefits this year are pensioners who are entitled to pension credit and have not yet applied for it.

The assessment assumes a five percentage point increase in the take-up of pension credit due to ‘loss aversion’. According to the DWP, this will reduce the number of pensioners who are not entitled to pension credit to around 780,000.