Labour's U-turns in government have cost Britain an estimated £8.2 billion in growth, according to a report by the Resolution Foundation. The think tank found that policy uncertainty under Sir Keir Starmer is higher than in any of the previous seven parliaments, despite the government's pledge to restore stability.
The report attributes the economic hit to reversals on personal independence payments, universal credit, winter fuel allowance, and the two-child benefit cap. It does not include recent U-turns on business rates for pubs and inheritance tax rules for farmers, which are expected to cost an additional £300 million and £130 million respectively.
Researchers noted that Chancellor Rachel Reeves has announced £6.1 billion of U-turns, the second-highest in 15 years after Liz Truss's mini-budget. The government also pulled an amendment to its Hillsborough Law on Monday amid concerns over intelligence agencies' obligations.
Greg Thwaites, research director at the Resolution Foundation, said: 'There’s lots to welcome in the government’s economic growth strategy. But it has spent much of the past 18 months undermining that strategy with policy U-turns, kite-flying tax ideas and timidity in areas like trade where it needs to be bold.' He urged the government to capitalise on signs of improving productivity by unblocking housebuilding and focusing job support.
