Lord Rose warns Labour has taken UK 'to edge of a crisis' as Ineos halts investment

Lord Stuart Rose, the former chief executive of Marks & Spencer and Asda, warned on Tuesday that Britain was "at the edge of a crisis" and urged the Labour government to change course to revive growth and jobs. His intervention came as Ineos, the chemicals and energy group linked to Manchester United investor Sir Jim Ratcliffe, said it had stopped investing in the UK and was redirecting future capital to the United States in protest at recent tax changes.

Ineos said it had committed £2.2 billion of investment to the US after concluding the UK fiscal regime for oil and gas had become unstable. The company has already closed the Grangemouth oil refinery in Scotland this year, with the loss of more than 400 jobs, and its senior energy executive said future investment in the UK was "out of the question" while tax and fiscal uncertainty persisted.

On Times Radio, Lord Rose said the government had failed to deliver the growth it promised when it took office and warned that continued stagnation would leave public services underfunded. "We have got no growth in the economy. If you have no growth in the economy, you're not creating any wealth," he said. He added that unless ministers took "radical action" the country faced a "very difficult spot" and said there was a risk the government could be forced to seek international financial assistance if conditions worsened.

Lord Rose also criticised proposed workplace measures and rising employee absence, citing a Chartered Institute of Personnel and Development report that showed average sick leave had risen to nearly two weeks a year from a little over one week pre-pandemic. He said the Employment Rights Bill, which ministers have pledged to amend after objections from business groups, would tighten hiring and employment flexibility at a moment when firms needed to be able to grow and create jobs.

Ineos's shift in investment intent was framed by the company as a response to a series of fiscal moves affecting energy producers. Energy Secretary Ed Miliband increased taxation on North Sea oil and gas producers by raising a levy on earnings from 75% to 78%, and the government extended windfall taxes introduced after Russia's 2022 invasion of Ukraine until the end of the decade. Ineos has warned that higher taxes and policy costs, including carbon levies on manufacturing, have hurt the competitiveness of UK operations.

Brian Gilvary, chief executive of Ineos's energy division, told media outlets the company "cannot invest with any certainty because we can't be sure what future tax rates will be" and said the United States offered a more predictable fiscal environment. Ineos operates major assets and infrastructure in the UK, including the Breagh gas field, the Clipper South rig and the Forties Pipeline System, which carries an estimated 30% of UK oil to shore. The company has also warned that plants such as the Grangemouth chemicals complex face closure risks because of rising carbon costs.

The fiscal and industrial policy debates have fed political tensions. Conservatives accused ministers of prioritising Net Zero targets over growth and manufacturing and called for cuts to carbon taxes and a reversal of the ban on new oil and gas licences. Labour ministers have defended the measures as necessary to meet environmental commitments and to rebalance public finances.

Regulator Ofgem and industry analysts have pointed to the role of policy costs in recent rises to the energy price cap, saying levies and schemes tied to decarbonisation have pushed household bills higher this year. The government has said support and transition measures are needed to meet climate goals and secure long-term energy resilience.

Chancellor Rachel Reeves faces mounting pressure ahead of the autumn Budget in November, when further fiscal decisions and any additional tax measures will be set out. Business leaders including Lord Rose and firms such as Ineos say clarity and incentives for investment are required to restore growth, while ministers emphasise the need to balance economic, fiscal and environmental objectives.

The debate adds to a broader conversation over the role of tax policy, regulation and employment law in shaping the prospects for UK industry, investment and public services. Economists and market participants will be watching the Budget for signals on how the government plans to stimulate growth and address concerns voiced by major employers and investors.