The rush to blame Labour over a flatlining economy is premature

Rush to blame Labour over a flatlining economy is premature

Last Updated: December 23, 2024By Tags: , , , , , , , ,

The rush to blame Labour over a flatlining economy is premature. Why is nobody noticing that figures up to October are the result of Tory decisions?

The BBC – among others, This Writer is sure – is making a big fuss about revised figures for July to September, showing that instead of 0.1 per cent growth, the economy flatlined.

This continued a trend that has been running throughout the year, with growth of 0.7 per cent from January to March (under the Tories) falling to 0.4 per cent in April to June (under the Tories) and then to nothing from July to September (under Labour, but during the summer recess, after hardly any decisions had been taken).

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Right-wing institutions have rushed to say the drop-off in activity is because of expectations about what Labour would do, but there’s no real evidence for that.

And in any case, Labour expects the economy to dip as a result of some of the decisions that were made in Rachel Reeves’s October 30 Budget.

We can certainly disregard Shadow Chancellor Mel Stride’s hysterical exclamation that “growth has tanked on Labour’s watch”, because it is a transparent attempt to deflect attention from the failures of his own predecessor and the last Conservative Chancellor, Jeremy Hunt (whose decisions must be more directly to blame).

That being said, Reeves’s Budget, with its sharp increases in employer National Insurance contributions and higher minimum wage, has struck a blow against businesses – and even though these measures won’t come into effect until April 2025, they are already taking steps to protect themselves.

This means, for example, that retailers will either close stores or cut recruitment – or both – between January and March.

There are also questions about whether this is a typical slowdown, as is often seen when a new government comes into office, as businesses doubt whether the new administration’s economic policies will help them.

Some have suggested that external influences are more responsible for the drop-off than the domestic economy.

And then there’s the elephant in the room that none of the UK’s media seem to be allowed to mention: Brexit.

The UK economy fell off a cliff because of the misinformed and disastrous decision to leave the European Union – fuelled by populists like Nigel Farage and Boris Johnson for their own personal advancement.

And nobody seems willing to admit that it is the principal blight on our economic well-being.

Reeves and Keir Starmer are trying to make deals with the EU that may at least partially reverse the damage the right-wing headbangers have caused.

But this could take years, or even decades.

Meanwhile, an entire generation of British workers are facing the desolate results, not just of 14 years of greed, opportunism and ineptitude by the last Tory-led governments, but of 45 years of neoliberal asset-stripping ideology.


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