Andy Haldane criticises Labour’s economic approach, urging a focus on local growth and older workers to drive the UK economy forward

Former Bank of England Chief Economist Andy Haldane has expressed doubts about Labour’s growth strategy, warning that the plans put forward by Shadow Chancellor Rachel Reeves are “very unlikely” to succeed in driving significant economic change.

In an exclusive interview with The i Paper, Haldane, who left the Bank in 2021, said that while some of Reeves’ proposals, such as infrastructure projects like the Heathrow runway and the Lower Thames Crossing, are directionally sensible, they may not deliver the immediate growth that the UK needs. He stressed that large projects take time to complete, sometimes decades, and questioned whether they would be enough to create lasting economic growth.

Haldane also criticised the negative economic narrative pushed by Labour in the early months following their election, particularly focusing on the £22 billion black hole in public finances. He argued that such gloomy language had a damaging effect on business confidence, which may have contributed to the UK’s sluggish growth. “Gloomy narratives were very damaging for business confidence,” he said.

The economist suggested that to unlock growth, the government should place more emphasis on local growth strategies and invest in regions that have been historically underfunded. He argued that supporting older people to remain in the workforce for longer could provide a huge economic boost, as people over 50 are increasingly being pushed out of employment, despite living longer, healthier lives.

“Ageing need not be a problem. It could actually be the opportunity of our lifetimes if we seize it,” Haldane stated, emphasising the importance of helping older workers remain productive.

Haldane also pointed out that if the government is serious about achieving long-term growth, it must address the gap between the tax burden and the quality of public services. “People don’t mind paying taxes if it shows up in better schools, roads, and hospitals,” he added. “That’s why reform of public services is so important.”

Haldane’s comments come as the Labour Party faces mounting criticism over its plans to boost the economy. Critics have pointed out that the party’s flagship projects, including the Heathrow expansion and new reservoirs, may take years to come to fruition, and are concentrated in already prosperous regions.

To address these concerns, Haldane suggested that more focus should be placed on fostering local growth. By working with local lenders and empowering smaller businesses, Haldane believes the government could create faster, more widespread economic growth across the UK. He warned that if only areas like Oxford, Cambridge, and Greater Manchester benefit from investment, regional inequality would continue to grow.

While Reeves has pledged to “go further and faster” on growth compared to previous governments, Haldane remains unconvinced that her plans will deliver the results the country needs in the short term.