The UK economy went into reverse in January – and Labour is doing all the wrong things as the economy shrinks.

Apparently a decline in manufacturing is the main cause of the 0.1 per cent decline. It makes sense – there’s little cause to make anything if nobody can afford to buy it.

Food and drink sales increased – but this was because people are choosing to eat and drink at home because it is cheaper than eating out, so restaurants and cafes are likely to have taken a hit too.

And what is the government doing?

It is raising taxes on businesses, meaning they will lay off workers, and it is cutting benefit payments to people who really need them. The money raised these ways will pay for increased defence spending and on attempts to fill the gap between what the Tories spent when they were in office and the money they took in.

The coming rise in the minimum wage will not compensate for those losses because fewer people will be working.

Oh, and US president Donald Trump’s trade tariffs will create further problems for UK businesses.

So Labour is doing all the wrong things.

The appropriate response to the current situation is to abandon attempts to reduce the UK’s national debt – it’s not causing any problems at the moment – and put money in the pockets of the people who spend it.

That means increasing benefit payments, not reducing them.

It means ensuring businesses employ people, rather than encouraging them to lay workers off.

And it means the government should be staring very hard at businesses that are doing very well at the moment.

The banks, for example, have been posting their profits for the year that ended in December 2024 – and they have all increased.

This means the bubbly will be uncorked for privileged workers who will all enjoy fat bonuses.

Didn’t I suggest a progressive tax on bonuses, only a few days ago?