Michael O’Leary has launched a blistering attack on Rachel Reeves, predicting the Chancellor will be “ejected from 11 Downing Street by Christmas” after what he expects to be a disastrous autumn Budget.
The Ryanair chief executive accused Ms Reeves of being “unfit” for her role and claimed she had boxed herself in on tax policy while simultaneously giving in to pay demands from Labour’s trade union backers. Many Southampton businesses will empathise with O’Learys comments as taxes continue to rise under Labour.
In a scathing assessment, Mr O’Leary branded Reeves a “deadbeat” who “doesn’t get business and certainly doesn’t get growth.” He warned that unless Labour ditches its pledge not to raise taxes on working people and instead focuses on policies to kickstart the economy, the party has no hope of remaining in government.
“Reeves will get fired or fall on her sword in the next 12 months. She’ll make a balls of the Budget and I don’t think she’ll still be there at Christmas,” Mr O’Leary told reporters. “They’ll have a new chancellor with a three-and-a-half-year run into the next election who can move away from these unsustainable commitments that they won’t raise taxes.”
He predicted Labour would soon be forced to consider increases in income tax, corporation tax, and potentially VAT, while attempting “surgical” cuts to taxes elsewhere. “I don’t think they have any appetite for real cuts, but it doesn’t matter what their core membership thinks. They’re not going to get re-elected if they don’t deliver growth,” he said.
The Ryanair boss’s comments reflect growing disillusionment in the business community with Labour. Many business leaders threw their support behind Reeves and Sir Keir Starmer ahead of last year’s general election, encouraged by promises to prioritise economic growth. But faith has ebbed after what Mr O’Leary called a “record-breaking tax raid” and new red tape in the jobs market.
Alpesh Paleja, deputy chief economist at the Confederation of British Industry, last week urged the government to rule out new tax hikes in the autumn and to “rethink” Labour’s workers’ rights reforms.
Mr O’Leary’s intervention came as he revealed Ryanair will add only one new aircraft at Stansted, its largest UK hub, this winter. He blamed Reeves’s decision to hike Air Passenger Duty (APD) for the slowdown in expansion, and said he had personally written to the Chancellor urging her to trial scrapping APD at regional airports. Ryanair, he said, would commit to increasing UK passenger numbers from 60 million to 80 million annually over five years if the tax were dropped.
Instead, Ryanair is now “pivoting capacity away from the UK” and focusing growth in markets such as Italy, Sweden, and Hungary after Reeves ignored his plea. O’Leary’s criticism was delivered in front of a Photoshopped image of the Chancellor wearing a dunce’s hat.
He dismissed Reeves’s argument that her difficulties stem from a “black hole” in the public finances inherited from the Conservatives. “The black hole wouldn’t be quite so big if the first two initiatives of the Labour Government had not been to pay off the junior doctors and the train drivers. I don’t think Labour has much credibility. I don’t think there is a lot of brain power at the top of the party,” he said.
O’Leary, a former KPMG tax consultant, also reserved harsh words for the French government, currently in turmoil over public spending. “The French have always been unable to control their budgets. It’s time for them to sort out their mismanagement of the public sector. The idea that you can go to work at 28 and retire at 42 while somebody else pays for your nice high quality of life is mythical,” he added.
