It’s been three months since Rachel Reeves first sat in No.11 and day after day there have been gloomy utterances about the state of our nation.
And what is the effect? Nobody in their right mind will be investing in our country while such a huge socialist cloud hangs over business.
There have been three shocking signs. Firstly, the Institute of Directors confidence index which measures business leader optimism continued to fall in September to -38 from -12 in August, the lowest since December 2022.
Next came S&P Global’s purchase managing index which found that confidence in the UK manufacturing sector fell last month at the quickest pace since March 2020.
Finally, despite all the talk from Thieves about growth being the only answer, The Guardian reports that she has told ministers to draw up billions of pounds in cuts to infrastructure projects over the next 18 months.
Members of the Cabinet have been asked to model cuts to their investment plans of up to 10 per cent of their annual capital spending.
All this would mean big projects like hospital improvements, road building and defence projects being either slowed down or stopped all together.
Economists warn that such cuts to capital spending will end up damaging the economy and our creaking public infrastructure.
After all it was only last week Thieves at the Labour party conference said: “It is time the Treasury moved on from just counting the costs of investment in our economy to recognising the benefits too. Growth is the challenge and investment is the solution.’’
Well, she has changed her tune pretty smartly.
All this gloom is being done in the name of the alleged £22billion black hole. Thieves has been relentless in blaming the Tories for the financial legacy while Jeremy Hunt, the former Chancellor, simply says she is lying. I’m inclined to believe Hunt.
What on earth Labour ministers know about business could safely be fitted up a nat’s rear end and still leave room for Angela Rayner’s IQ. They have never made money, invested money or started anything except a row.
Treasury officials have told the Guardian that cutting spending on infrastructure in the short term is the only way to repair the gap quickly.
Strange isn’t it that Thieves can find the money for state pay rises – train drivers, teachers etc – costing the Exchequer north of £10billion but can’t find the money to build a new hospital.
Her plans, which will be aimed at the middle classes who have either made or saved a few bob will be announced on October 30 so with four weeks to go I expect the economy to come to a grinding halt.
I also see further uneasy signs in the economy with young people struggling to find or keep jobs. Youth unemployment is much higher than general unemployment and I can only think that firms are reluctant to take them on until they see what nasty surprises Thieves has in store.
The massive rise in minimum pay to £11.44 (Labour have made it clear that another rise of 4% is on the way) makes hiring unskilled young people very unattractive. That would put anybody 21 on over on £25,000 a year.
The effect of that will mean unemployment will continue to rise across the winter. Vacancies continue to go down. It will be the next major political issue.
Thieves will enjoy it as there will be more gloom and we’ll be the ones paying.
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