“Labour inherited a weak economy from the Conservatives”.
There are two main reasons I regularly say this when writing or broadcasting about the UK’s current combination of slow growth, high inflation, spiralling borrowing and extremely fragile public finances.
The first reason is that it happens to be true. The second is to try to counter the tendency of so many to deride and dismiss the reporting and explanation of economic realities which they don’t like, which undermine their world view, as party pris.
This is a common hazard for any columnist or blogger. Even highly-analytical work, carefully researched and sourced, is often waved away as ideologically-driven, or party political, because it is uncomfortable for those reading it.
So let me say that in July 2024, when Keir Starmer took office after fourteen years of Tory-led government, the UK tax burden was already soaring – heading for a 70-year high – and the national debt was north of 90pc of GDP. The Conservatives left the British economy in a bad state.
But since then, Labour has made a bad situation much worse, jacking up spending, borrowing and taxation even more, funding a torrent of state hand-outs with the aim of creating an even bigger slab of “clients voters” – those who back Labour automatically, because they live on benefit payments.
This “soft-left” approach – which excites student politicians and posh London dinner parties – is often presented as “compassionate” and “the right thing to do”. It is actually a deeply-cynical and economically-damaging exercise by out-of-touch elites who want to bribe one part of the electorate by taking money from millions of hard-working households, in a bid to retain power.
In the real world, at a time like this, when the public finances are already so precarious, Labour’s approach to economic management is so profoundly counterproductive as to be reckless. That reality is now being starkly revealed on government debt markets, which are flashing red – warnings much of Britain’s political and media class seem determined to ignore.
And, in the aftermath of pivotal upcoming and devolved assembly elections on Thursday 7th May, the UK’s already extremely fragile public finances are set to get a lot weaker still.
Britain is already a G7 outlier when it comes to high inflation and sky-high government borrowing costs. This country is, in the view of increasing numbers of investment professionals, heading for a disastrous bond market “correction”.
How might that happen, and what would be the implications for the UK economy, politics and broader society?
