A low, dishonest decade

J. Sorel

 

J’ACCUSE

The welfare bill was advertised as a financial expedient to keep The State going. If the Prime Minister cannot pass legislation like this then he does not have a majority in the House of Commons and ought to seek one. The question of what the Labour government is for must now be asked not in a ‘Search of a Starmerism’ sense but in an operational one; it is not inconceivable that No. 10 will simply run out of legislation and announce a ‘Pause to Politics’.

There will be a last fitful attempt at giving a shape to Starmerism in the coming tax increases. ‘Just raise tax. Just bloody do it’. Glowing-eyes Torsten Bell. We will hear a lot about finally cutting the Gordian knot of asset owners versus workers, young versus old; much will be made of the polling which shows that the British people want better public services but also want to pay less in tax (who would’ve thunk it!) as evidence that their disquiet over the increase is in fact irrational. Tom’s Law of Politics. Stylistically, this effort will feel similar to some of Stephen Bush’s garish asides about ‘punishment building’ that we saw just after the election. The attempt to establish a continental European-style tax code in Britain will not work, though. Given that the YIMBYist supply-side reforms now seem to have floundered Labour will not copy the other salient feature of continental social democracies: that it is actually possible to build things like power stations and railroads with the revenues raised. As such any extra monies will be spent on ‘little more than woke’.

What will also doom this strategy is that the public are in no mood to hear about supposed insoluble Dire Problems, Sophie’s Choices when it comes to taxation, services etc when billions are being spent to maintain Illegals in style in hotels. This ‘cost of woke’ is – as the Grimsby focus group shows – now firmly established in the public consciousness and will poison all these debates even if the sums are comparatively low; it is impossible to have a productive conversation about things like winter fuel allowance so long as it carries on. Much like Brexit in 2019 the British public has, in its wisdom, decided that it will not be entertaining any ‘hard conversations’ about their standards of living or the remit of the state until this basic howler is fixed. There’s now a house style among vaguely reform-minded British leftwing commentators which reacts in a puzzled Jim from The Office manner at how angry and unhinged the Britain of 2025 is (‘The Runcorn by-election is a Ballardian Apocalypse’; ‘The Oasis revival at the End of the World’); but the public’s demands are eminently intelligible and so the way forward for people like Mr Bell is clear – that to do anything housing, planning, taxation you need only restrain advisors like Hermer and break with Keir’s boutique commitment to the ECHR.

For the next few years the government will squat in office hiding from its own MPs and refusing to do anything about the dire problems that it itself outlined in July-August 2024. The country is by Keir’s own telling currently lying in ‘rubble and ruin’, but the government will now – much as it has done for the past year – simply preside over a series of culture war distractions on the pattern of hereditary peers, assisted dying, the Chagos Atoll and abortion. Four years of ridiculous solemnity with ‘free votes’ and Keir showily recusing himself. Iconic Venues profaned as the laws against vagrancy are repealed etc. Starmer no longer has the political capital to carry out the dreaded constitutional reforms; the opposition is now live to the danger and any changes will – unlike in 2010 – rightly be twigged as simply an attempt to poison the waters for the next admin.

After the failure of the welfare bill unamended we have now entered an absurd period where no policy will be made and in which Blairite society has made deep rhetorical concessions to its enemies, all under the aegis of a supposed hardliner. It will no longer really defend itself, but it will not repeal itself either. Many are, understandably, looking forward to a period of reform and truth-speaking, but I think we are settling into a long, fatuous era. An apt symbol of it will be found in the British right commissioning the Labour Party to investigate its own complicity in child rape. A second ‘low, dishonest decade’ beckons.

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Can Britain survive four more years of Labour?

Just 12 months after coming to power, the ‘grown-ups’ have left the economy facing a dire future

TIM WALLACE

One year on from his landslide election victory, Sir Keir Starmer’s plans are in disarray.

His Chancellor is in tears. His MPs are in open rebellion. But most importantly outside Westminster, his promises to restore growth in the economy have come to nought, despite extremely expensive plans to force a rebound.

Here are the charts that show why the optimism of last summer – when Labour’s victory supposedly replaced the inept Tories with “grown-ups” – has withered.

Growth

Since the shock of the pandemic lockdowns and the boost from reopening the economy, GDP has only grown in fits and starts.

In last year’s election campaign, the Conservatives made much of the “gangbusters” growth of the first half of 2024. But that rapidly petered out.

The opening months of this year also saw a brief growth spurt which came to an end even more quickly – the economy shrank again in April.

Looking through the short-term bumps to compare GDP with its level a year ago, there are few signs of any sustained recovery. The economy is not even 1pc bigger now than it was 12 months ago.

The outlook for living standards is not much better. Productivity – which measures the average output created for each hour worked – has been in freefall for the past two years.

Last year it dropped by 0.8pc, according to the Office for National Statistics (ONS), double the 0.4pc fall suffered in 2023.

Those represent the biggest drops since the financial crisis.

Higher productivity over the longer term is the key to sustained higher wages, lower inflation and economic growth, so the outlook is extraordinarily bleak.

Inflation

Sir Keir came to power after the cost of living crisis pummelled the British public.

Living costs are up by more than 25pc since the eve of the pandemic and essentials are up even more.

Groceries cost more than 30pc more than they did just over five years ago. Electricity and gas bills are up 57pc and 73pc respectively.

Rachel Reeves, the Chancellor, and her colleagues thought they had got spectacularly lucky last year, as inflation fell back to the Bank of England’s 2pc target in the month before their election victory.

But they are receiving little credit for keeping a lid on living costs: 2pc inflation still means prices are rising, not returning to anything like pre-Covid levels.

And worse still, inflation only stayed at target fleetingly. Consumer prices are now up by 3.4pc on the year and the Bank of England expects a further acceleration in the months to come.

Many of the factors driving inflation higher are caused by the Government, from the VAT raid on private school fees to prices set by regulators such as water bills.

The Bank of England fears this will lead to a fresh wage-price spiral driving inflation up further – hence cutting interest rates only very cautiously, sustaining the high borrowing costs facing Britain’s indebted households.

Unemployment

Andrew Bailey, the Bank’s Governor, is waiting for more signs the jobs market is weakening. That would ease concerns about a fresh spiral of inflation.

But it is also bad news for workers.

The Governor has flagged up the signs that the labour market is indeed softening. Unemployment is up at 4.5pc and is set to rise to 5pc, the Bank forecasts.

That is a level last seen in lockdown, and threatens to take Britain back to 2015 when the economy was still shaking off the hangover from the financial crisis.

There are other signs of workers suffering too.

Bailey says the cost of the Chancellor’s £25bn raid on employers’ National Insurance contributions (NICs) – the biggest chunk of her record-breaking tax-raising Budget last October – appears to be falling largely on workers, in the form of less hiring and lower pay rises.

The Telegraph: continue reading

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