Kwarteng’s mini-Budget was ‘divorced from reality’, says Aviva boss

The chief executive of insurance giant Aviva has described Kwasi Kwarteng’s mini-Budget as ‘divorced from reality’.

Amanda Blanc’s comments made at a Labour business conference were the most forthright reaction yet from a FTSE 100 boss to Kwarteng’s disastrous plan for unfunded tax cuts, announced in September but since rolled back, which aimed to boost GDP.

Blanc said: ‘The market reaction to the mini-Budget showed political decisions cannot be divorced from reality. We can’t just invent growth, we can’t just improve productivity by wishing it so.’

The comments came during a gathering of business leaders yesterday at an event fronted by Labour leader Sir Keir Starmer and shadow chancellor Rachel Reeves. 

The party is trying to capitalise on alarm caused by the mini-Budget, which prompted a market meltdown, a £19billion Bank of England intervention and, ultimately, the collapse of Liz Truss’s premiership.

Labour’s leader, who sought to woo bosses at the CBI conference in November, has met more than 100 chief executives in the past six months. 

The event at Canary Wharf was attended by 350 business leaders, including Tesco chairman John Allan and ex-Sainsbury’s boss Justin King, a director at Marks and Spencer.

But Blanc’s comments could also be seen as a warning to Labour against a reversion to the economic unorthodoxy of Jeremy Corbyn, a legacy the current leadership is doing its best to bury.

She said that achieving growth required ‘an ambitious, far-reaching but achievable plan’. ‘This is not a time for wild experimentation,’ Blanc said. ‘But it is the time for bold ideas and action.

‘Any plan must provide the consistency, stability and predictability essential for each UK business to grow.’ Labour’s conference also attracted sponsors including energy giant SSE and banking group HSBC.

Ian Stuart, HSBC’s UK boss, told the event: ‘The economic backdrop is challenging, arguably as challenging as we’ve seen in many years.’ 

He said businesses in Britain faced problems including recession, inflation and a tough market for hiring staff. ‘It’s little wonder that business investment and confidence is low,’ he said.

Plans unveiled by Labour yesterday to boost growth include an aim to increase venture capital investment in start-ups, partly by unlocking billions tied up in pension funds.

They came as the Government today unveils long-awaited plans dubbed ‘Big Bang 2.0’ to cut through red tape in the financial services sector.

They will include the watering down of ring-fencing rules introduced after the financial crisis to separate lenders’ high street banking arms from their more risky investment bank divisions.