Rachel Reeves told to 'get serious' and start backing UK business by fellow Labour MP

Struggling businesses need lower taxes and energy bills, the Labour chair of the Commons Business Committee warned today. Liam Byrne, who served as Chief Secretary to the Treasury under Gordon Brown, said Donald Trump’s tariffs will “hit jobs, squeeze wages, and bruise our economy” and urged Chancellor Rachel Reeves to “get serious about industrial support”.

But he said the UK could lead a new “league of free traders” including nations in Europe and east Asia, with a combined economy larger than the US. The Federation of Small Businesses is urging the Government to press ahead with reforms to business rates while shops and hospitality businesses including bars and restaurants saw bills go up in April, after a scheme to reduce business rates during the Covid pandemic was downgraded.

In addition, industrial electricity prices in the UK are 45% higher than in France or Germany, and four times higher than in the US.

The Federation of Small Businesses warned this month that confidence is “in a rut” with half of firms reporting lower revenues.

Writing for the Sunday Express, Mr Byrne said support for business should also include a policy of giving government defence and NHS contracts to British firms.

He urged: “Slash industrial energy bills. Give businesses the flexibility to train and hire for the roles they need. Cut business rates for smaller firms. Everyone else is backing their own - so we must level the playing field.”

The MP said: “Over the last fortnight, the Business and Trade Committee has been in intensive talks with business leaders and policymakers around the world about what free-trading nations like ours should do next.”

Mr Byrne said Donald Trump’s “tariff tantrum” is going to hurt the UK but could also provide an opportunity to boost trade with the EU and with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which the UK joined last year and involves nations across Asia and the Pacific.

He said: “We need to forge a modern League of Free Traders - smaller economies that, together, account for about a third of global GDP. And the UK is uniquely placed to lead.

“We’ve got a one-of-a-kind Brexit trade deal with the EU. And we, alongside Japan, are the largest economies in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a massive free trade pact linking 11 Asia-Pacific countries including Canada and Australia.

“We should strengthen both alliances. A serious reset with the EU could include deeper defence ties, cooperation on North Sea wind power, a cut in export red tape, and stronger links for our services sector. That could generate enough new growth to offset the impact of US tariffs.

“Meanwhile, expanding the CPTPP - starting with Indonesia, a $1 trillion economy - could open up an even bigger, nearly tariff-free market. Taken together, the EU and CPTPP economies are much larger than the US and and we’re in pole position to gain from both.”

The MP warned against retaliating against the US with tariffs of its own. He said they should not be ruled out entirely but warned: “Let’s be clear: while retaliatory tariffs might feel good for a moment, they are likely to do more harm than good.”