“Fixing the foundations” latest: Jobs down; manufacturing down, unemployment up… Reeves’ economic mismanagement hits new levels

Yesterday was not a good day for Chancellor Rachel Reeves. On the eve of her spending review announcement, it was revealed that UK unemployment has hit its highest level in almost four years, as businesses shed jobs and freeze hiring in the wake of her Autumn tax raid. Official figures showed that the unemployment rate rose to 4.6% in the three months to April, up from 4.4% in the previous three months. This is the highest since the Summer of 2021 when the UK was emerging from 16 months of lockdown.

Reeves’ £45bn National Insurance tax hike has hit business hard in the UK, and despite a pre-election promise not to raise taxes on working people, it is working people who are suffering the fallout. It is surely inevitable that when a government makes it more expensive to do something, then people do less of it. In this case, the Chancellor has made it significantly more expensive to employ people, and as a result businesses are cutting staff numbers, freezing pay rates, and postponing or cancelling hiring into new positions.

The workers of Britain are currently faced with a horrendous jobs market, in which job opportunities are increasingly difficult to come by, wages are being suppressed, and competition for vacant positions is as fierce as I can recall.

And it gets worse for “Rachel from Accounts”. On the same day as unemployment hit a four-year high, Manufacturing hit a 16-month low. Her jobs tax is also responsible for forcing UK manufacturing output into the fastest running downturn in over 16 months.

Labour’s plan is not working. Reeves’ economic illiteracy is costing this country and its’ workers dearly, with millions of people feeling the real-life effects of her incompetence every day.

But in today’s spending review, she will try to claim the opposite. She will say that her measures have put the economy on a firmer footing. That the UK now has the fastest growing economy in the G7. That thanks to her choices, she can now afford to U-turn on her disastrous Winter fuel allowance policy.

It is all lies and gaslighting. Having spent months bleating on about a so-called “black hole” in the public finances inherited from the previous Tory government, she now expects us to believe that she has miraculously turned around our faltering economy?

The facts are stark and undeniable, and they paint a very different picture to the one she will claim.

In addition to the rise in unemployment and decline in manufacturing, The Organisation for Economic Co-Operation and Development (OECD) has downgraded its forecasts for UK economic growth for this year and next as a direct result of Reeves’ economic policies. Their forecasts push down UK growth from 1.4% to 1.3% in 2025, and from 1.2% to 1% in 2026.

Inflation is also up from the levels inherited from the Tories, most recently sitting at 3.5%, compared to just 2% in July 2024.

Government borrowing is at an all-time high. Admittedly, this Labour government did inherit a mountain of debt from the previous administration thanks to COVID and the cost of lockdowns. But instead of prioritizing a reduction in government debt, they have done what all Labour governments throughout history have done and borrowed ever more, in order to fund their weak capitulation to the unions and their public sector pay demands, and to paper over the cracks of their own economic incompetence.

In May, official figures showed that borrowing was £20.2bn in April alone, up £1bn from the same month in 2024. It was the fourth highest April figure since records began in 1993, and is symptomatic of the weak economic growth and the downgrading of forecasts that she is directly responsible for.

As a result, debt interest payments alone now exceed £100bn per year.

So, far from getting the economy on a firmer footing, as she has claimed, the UK’s economic trajectory is spiraling downwards at a rate of knots. Borrowing, debt interest and inflation are all moving in the wrong direction. Tax revenues are down as a result of wealth creators leaving the UK in their droves in order to avoid her tax raid on inheritance and capital gains.

Why can’t she just tell the truth, and admit that she is reversing the cuts to the Winter fuel allowance due to public pressure, rather than trying to gaslight us into believing it is all the result of some mythical turnaround in economic fortunes that she has instigated?

Remember when Lucy Powell claimed that the Winter fuel allowance cuts were necessary in order to avoid a run on the pound? Where is the evidence for that happening, now that those cuts are being reversed?

Labour lie and lie and lie, in the belief that if they tell us the same falsehoods enough times, we will begin to believe them. But it doesn’t work. The public are not as stupid as this Labour government think they are. People are seeing through their gaslighting, and it is leading to irreparable damage to the credibility and trustworthiness of Reeves, Starmer, and the entirety of this shambolic government.