As if to reinforce the message in this morning's video, Ipsos sent me a press release overnight saying:
A new Ipsos UK poll reveals widespread public pessimism about the British economy, with 77% of Britons rating the economy as "poor."
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Widespread economic pessimism: 77% of Britons describe the current state of the economy as "poor," compared to just 19% who view it as "good” (net -58). Pessimism has gradually grown since last summer and has now returned to where it was in March 2024 before the election.
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Blame game: Those who view the economy negatively are almost equally as likely to blame decisions made by the current Labour government under Keir Starmer and Rachel Reeves (42%) as they are to blame the previous Conservative government of Liz Truss and Kwasi Kwarteng (44%). There has been an 18 ppt increase in those citing the decisions made by the current Labour government since August 2024. The impact of the Covid-19 pandemic (49%) still receives the most blame, while Brexit (45%), the Conservative party's economic policies overall since 2010 (40%), the war in Ukraine (40%) and the state of the global economy (38%) are also cited as major contributing factors in the country's economic state.
They supplied this data to support their conclusions:
There is some realism in there. That said, there is no comfort for Starmer or Reeves. Even if external factors or past dire choices (Brexit) are seen as significant, there is growing evidence that people do not think that Labour has got a grip on the economy.
I happen to think that is right. Whilst seeing much change from Labour as yet might have been a bit much to expect, the pessimism is soundly placed in the absence of any coherent ideas, Labour's massive negativity, over-focus on book-balancing, and the failure to deliver any initiatives that might actually make the lives of most people in the UK even a little bit better.
Other data reinforces this feeling of consumer negativity. As the FT has noted:
One in five UK-listed companies sounded the alarm on profits in 2024, underlining the impact of rising costs and businesses' reluctance to commit to optional spending.
A total of 19 per cent of London-listed companies issued profit warnings, the third highest proportion this century and exceeded only by the figures in 2001 and 2020 when the dotcom bust and pandemic hurt performance, according to a report published by EY-Parthenon on Monday.
That looks like a warning sign of recession to come.
There is also a clear indication of stress around this issue within Labour, where the likelihood of there being any real warmth for Labour's sudden conversion to a policy of airport expansion in the south-east of England alone seems very unlikely to have much support from MPs. The FT, again, notes:
Rachel Reeves will on Monday call on Labour MPs to back her plans to boost growth, including a highly contentious proposal to expand Heathrow airport.
The chancellor is facing criticism from some in her party for allegedly siding with business over consumers and for backing a third runway at Britain's busiest airport, amid fears it could hit the government's environmental objectives.
The country is facing a downturn. People's lives are being squeezed by excessive costs, the biggest of which are the result of the Bank of England's deliberate policy of inflating interest rates to way in excess of where they need to be. Public services are being allowed to fail, and the answer is to build new vanity projects in the form of airport runways that will not deliver results for years and which will make holidays for the decreasing number who can afford them more expensive. As coherent economic thinking goes, this is absurd.
The answer is, as Colin Hines put it in his letter to the Guardian, published this morning:
What exactly is the end goal of growth? The response should be an increase in economic activity directed predominantly towards rebuilding public services and turbocharging a green transition.
That would make sense to people. People would see the gain. They would know things for which the government was responsible were working. Their confidence in it would rise. Knowing that their basic needs could be met, they might be willing to spend more. But, as it is, they won't. And Rachel Reeves is simply making matters worse.
If Labour is in a mess, it is all of their own making.
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“Rachel from accounts” as some are now calling her is too busy hunting imaginary “black holes” and she’s doing this because she hasn’t got the brains to realise Margaret Thatcher was wrong the government does have money of its own! This is despite the enormous amounts of money the government created to deal with the Great Financial Crash of 2007/2008 and the Covid Pandemic. She’s not alone, however, the UK is plagued by politicians who are fundamentally amateurs when it comes to understanding economics and the country’s monetary system functioning.
Come on Clive (Lewis) and friends, isn’t it time to jump this sinking ship and help turbo-charge the Green Party instead?
I wouldn’t. Not with its current economic policy.
Agreed. The Green Party needs to ditch its fundamentally unaccountable central bank quango policy. Many of the world’s problems are caused by unaccountable quangos like the WTO and IMF which don’t enforce key rules.
Maybe such an influx would help push the Greens in the right direction? Perhaps more likely than the Labour Party ditching neoliberalism. While some LP MPs and supporters with a leftward bent may think to sit tight, hold their noses (why does that phrase make me think of Polly Toynbee?) and wait for their time to come again, others may consider the LP to be a lost cause.
Richard, I think you said a while back that Molly SC was conferring with you about economic matters – did that have any noticeable impact?
Jim
Green Party mmebers set policy and it is a very slow progress, not helped by them having to cancel conferences as they have spent all their funds on legal fights.
So far, policy has not changed. Discussion is still happening.
Richard
Can you point me in the direction of critical evaluation of the Green policy. I’ve encountered blith endorsement at my local branch
https://www.taxresearch.org.uk/Blog/2023/07/07/the-green-partys-policy-on-money-and-so-on-the-economy-is-a-work-of-econimic-fantasy/
That’s it
I think the upcoming Collective Party may be the way to go.
https://we-are-collective.org/
Investment in the Uk is highly asymmetric. The focus is London and the South East. The claim is that “well that is where most of the money is made”. However, this is circular reasoning – investment is made in London (new rail transport links, more airport capacity etc etc) which drives so-called “growth” leaving the rest of the country with what, exactly? All the talk about better transport outside of London “oop north” – never materialised. LINO is far too London-centric (ditto most of the other parties). As long as this remains the case, there will be over investment in London/South East and grotesque under investment in the rest of the country. I don’t think people voted for that, did they?
A critical point, concisely and well made. Over five years ago there was research to show that 80%+ of government infrastructure and related investment was for London and the South East. This turned out to be the classic 80/20. Twenty per cent of the UK population live in London and the South East. It isn’t the City that has been successful for London and the South East (except by stealing the Government from most of the British people); it is Government investment and commitment that has made London and the South East prosper – at everyone’s expense. The only thing that actually benefits London and the South East that is not gifted it by Government; is the geography – it is nearest our closest natural market – Europe. So what do we do? Brexit – probably the most deeply ignorant, self defeating decision a democracy could make if it was deliberately embracing ruin. And what does that mean? London compensates the loss by taking everything in Britain Government can offer exclusively for itself, to protect itself, at everyone’s expense. And which part of Britain actually sacrifices itself for climate change – and receives no adequate compensation (for example, major direct investment in renewable R&D and fast enough development of the industry) from government? Scotland.
Enough.
There is going to be a big HS2 interchange for Birmingham Airport. Birmingham is not at capacity so why if we will be able to get from Birmingham to Euston in less than an hour do we need another runway at Heathrow?? E
All they are trying to do is turn Birmingham into a dormitory town for London. I hazard that by the finish more than 50% of the cost of HS2 will almost certainly be simply the fast few miles into London. Why? Because the South East NIMBYS insist it is almost all underground, the cost of land in London is prohibitive, and the cost of construction in London is astronomical; and the cost of lawyers and everything else in London is obscene. You can produce “a lot more bang for your buck” once you are free and North of London.
Yes but the UK became a member state of the European Union (EU) and of its predecessor the European Communities (EC) – principally the European Economic Community (EEC) from 1 January 1973 until it left but it originally joined with the aim of boosting its economy. This helped but not sufficiently. Accordingly other reasons for the UK’s relative economic decline must be put on the table. One of those reasons I would argue is because politicians have allowed global trade to be rigged. Or in plain language facilitated greed (The City of London as the money laundering and tax avoidance centre of the world, for example?).
Britain signed the Treaty of Rome, and didn’t mean it. The EU, as EEC was essentially a European peace project, founded in the mutuality of interests economics offered. Britain signed at Treaty did it didn’t believe in, and cynically spent much of its time undermining the EU, instead of helping to lead it. Britain believes only in advantage; and has always operated to ensure ‘balance of power’ tactics guarantees Britain benefits most (it could do this when it was the world financial and industrial leader, but not post-WWII); but it doesn’t work for the EU, which relies on consensus and shared objectives. Brexit was the inevitable result. Britain is incapable of looking past its own narrow interests (which it defines perversely even for unfortunate insiders like Scotland); Britain has always been more Trumpian (from the sixteenth century – a slave economy in the Atlantic World wasn’t an accident, or oversight), than it would care to confess. It still clings to “permanent interests”; although they are quite obviously no longer in Scotland’s interests.
Six months in power, continuing with austerity, more cuts to public services, blaming the public for everything and wondering why “economic growth” is not happening.
Either Reeves and Starmer are incompetent or deliberately driving the economy into the ground.
@ John Fairhall. I’d go for Labour under Starmer as a mixture of amateurs and shills!
Labour are painting themselves into numerous corners – on their own terms they’re failing, and the proceeds of their goal, growth, will simply once again be captured by those already wealthy (as anyone paying even scent attention will know). I note that Reeves sympathetically listened to the concerns of non-doms (and offered direct support to deal with any rule changes). This contrasts with the WFA withdrawal, where no listening at all took place. Numerous examples tell anyone listening who is not already wealthy that growth will not benefit them, but will demand that they spend the crumbs that they already have. This may in part explain why people are reducing spending, since political power is equated with spending in capitalist systems, people may well be deciding to undermine the govt’s wish for growth (in the only way they can) by reducing participation (in a system that looks increasingly ludicrous). Somehow, contempt for the majority seems to exude from every pore of LINO, and every step they take seems a mis-step of their own making. They seem oblivious to the fact that states are the basis of all economies, that without the state’s unequivocal support, economies cannot function. The state brings economies into being, and sets the terms by which they operate, including the distribution of goods within them. Inequality is govt policy, they decide tax rates and what is taxed, and preside over regressive tax policies (council tax, NI, VAT, CG), as well as things like anti-union legislation (funny how this never features in proposed bonfires of red tape, or in free-market fetishists’ tirades govt interference), vast corporate subsidy and so on. Govt is immensely powerful and we live in the shadow of that power and they deny its existence. It is a tragedy for the many in the true sense of the word.
Labour ate the party of non-doms, airport expansionists, city bankers etc. They don’t care about British citizens in europe or regular British citizens in Britain. They care about growth and will get it by any means necessary.
The agony of the UK housing crisis relentlessly worsens with every passing day.
Four million new homes are needed to fix it but even the modest government target of 1.5 million new homes in the lifetime of this parliament is unlikely to be met.
We need a complete rethink of the way new house urbanizations are delivered.
Conventional designs offer two distinct solutions neither of which is suitable.
The first is high rise towers but following the Grenfell Towers tragedy this is no longer acceptable.
The second is to build huge urban sprawl estates that consume vast areas of greenbelt land.
To claim that large areas of brownfield industrial land can be used is a fiction as the cost of decontamination is very great.
The often quoted example of building on disused petrol stations is hideously expensive to use for housing as the underground fuel tanks must be removed and the contaminated land made safe which takes years to achieve.
We must find a third way.
Over the last century our existing towns and cities have been torn apart by the motor car.
New towns and cities are presently designed around the car which requires an intricate network of main roads and inner streets which requires massive government funding.
This model has a largely symbolic city centre surrounded by vast unsustainable housing estates.
City residents travel from home by car to out of town shopping malls for food and other retail needs with the city centre a pale shadow of its former glory.
Modern planning has dual carriageways plunging into the old city centre in some cases fragmenting the city by driving straight through to the other side.
Our ”third way” solution to this dysfunctional nightmare is to start all over by focusing on the needs of people and working from there.
Our radical design solution is basically a return to the old city model that existed for thousands of years before the motor car was invented.
Inspired by Sir Joseph Paxton and Ebenezer Howard we have removed all the inner streets and put the out of town shopping malls back into the city centre.
We were inspired by the clean buoyant oxygen rich atmosphere of a botanical garden/palm house.
Our new city model is made up of covered, climate controlled, modular villages that are each fully sustainable.
The fundamental step back in time to fully integrated pedestrian village communities gives people a vastly improved lifestyle.
The new design concept provides large numbers of large area, good quality, low cost homes set in urbanizations with every modern amenity available just a few steps from home.
The new concept is fully explained via the following links.
https://bit.ly/BotanicalGardenVillage
https://bit.ly/BotanicalGardenVillageVideo
https://bit.ly/politicalpitchdeck
Kind Regards
Barry Coots, Designer and CEO, Botanical Garden Village Ltd, 124 Cleveland St, London W1T 6PG
WhatsApp + 34 645357005
I looked at your plan, Barry and thought them utterly alien to good living.
You did not eliminate cars. You recreated high-rise living without access to a garden.
That is not what we need. It has failed before. We do not need new ghettoes.
No mention of factory location one of the original arguments for the Garden City movement.
Perhaps Poundbury without the cars would be a better model, than futuristic modules imposing mars work station chic on nature.
Poundbury is nice just like lots of similar villages in the Cotswold for example but we must try to face reality.
Poundbury homes cost on average £750,000.
We need to deliver large area, top quality homes for less than £200,000.
The cost of the streets network in a conventional estate amortize out at more than £100,00 per house.
Add on the building land cost per home of another £100,000 and the chances of success fall to zero.
Why are you intent on supplying homes people do not want when there is more than £8 trillion of financial wealth in the UK?
Why not fund homes people want?
Maybe a little exaggeration Barry?
“House prices in Poundbury have an overall average of £365,530 over the last year.
The majority of properties sold in Poundbury during the last year were flats, selling for an average price of £258,579. Terraced properties sold for an average of £468,423, with detached properties fetching £530,500.
Overall, the historical sold prices in Poundbury over the last year were 20% down on the previous year and 17% down on the 2022 peak of £439,751.”
https://www.rightmove.co.uk/house-prices/poundbury.html
PS Yes I know construction costs have gone up considerably
Yet social housing in Poundbury is much the same quality as other housing.
Barry, you also seem to ignore low-rise multi-occupancy residential options as a ‘conventional’ solution. These increase urban density (vital to reduce the carbon footprint of transport), make it easier to build to passive house standards, and yet remain on human scale. They can also be introduced into the existing urban landscape piecemeal, rather than needing to consume valuable greenfield land.
The future lies in doing lots of small things well. Grand schemes are largely what has got us into this mess. Having said that, if you can make your ideas work, more power to your elbow!
Botanical Garden Villages ARE on a small scale with each village having its own village dome with health/Carer centre, nursery, pharmacy, hot food outlets, village pub, 24 hr Tesco, community seating, cash points and retailers plus the village spa pool/wellness centre all within 100 metres from the front door under cover giving an all year round warm dry environment.
You can see lots of detail via this link.
Elbow is operating on full power!
https://bit.ly/BotanicalGardenVillage
I think you have had your time now
I remain utterly unconvinced by this
@Barry
Maybe there’s a simple answer to this but if the villages are covered, where does the rain run-off go when we get a month’s rain in a few hours, as is happening v frquently now?
Perhaps, just perhaps, we can see a Black Swan paddling towards us? As the philosopher Charles Hugh Smith wrote (here: https://oftwominds.com/blog.html) “DeepSeek” could utterly upend a lot of the BS surrounding AI and cause the “End of the Everything Bubble” as the big “tech” stocks in the USA tumble? Might save Greenland from a plague of ambient air-cooled data centers, too, which would be nice!
Eventually, everything reverts to the mean but timescales are unknown. Between 2000-2003 the NASDAQ fell by 80% and it took until 2017 to recover, for instance.
Markets are taking this threat seriously today.
https://www.independent.co.uk/business/deepseek-ai-nvidia-meta-google-share-price-news-b2686909.html
Sorry Barry. I like my trees, the birds in them and the insects they feed on. I like to see the rain and snow and feel the wind. I don’t want to shop at Tesco, but prefer the butcher’s and green grocer’s. And at night, I want to see the stars.
So, how much will this third runway cost?
Back in 2017, it was estimated at £14 billion, and that was even after a “cut” of £2.5 billion.
https://www.bbc.co.uk/news/uk-england-london-42399840
The BBC in December last year reported again on the subject.
“The cost of building a third runway would be at least £14bn, and it would be paid for by the owners of Heathrow Airport.”
https://www.bbc.co.uk/news/articles/cre784dnq5go
At least…?
Have they forgotten that we have had several years of rampant inflation since then?
Clearly, it will cost a lot more than £14 billion now. I’d guess £20 billion at a minimum.
I’m assuming that it appeals to Reeves because it would be private money paying for it?
I hope she doesn’t guarantee the cost of building it under some public/private “initiative”.
But to build it would result in 761 homes being demolished, including the entire village of Longford.
https://www.bbc.co.uk/news/explainers-51646562
All in the name of growth.
And building a runway will clearly take away resources from building homes. It’s not like we don’t have a housing crisis.
So, what do we want, homes or airport runways?
Labour are making the same mistake that the Democrats in the USA made. Many Democrats didn’t vote for Harris because they felt left behind. Biden had growth, but real inflation was the concern of many who traditionally voted Democrat. They were losing, even though the system was supposedly winning. I think that’s what the pursuit of growth in a neoliberal economic model results in. Many, many people get left behind.
An airport runway vanity project does nothing to change the lives of ordinary people in the here and now.
Growth for the sake of growth in this system is madness. The failures of it have been going on for 55 years, since 1979.
Same old, same old.
Look where we are!
@ John S Warren. “Britain is incapable of looking past its own narrow interests …” Hardly surprising it’s the cultural norm given it’s been invaded a lot by different ethnic groups with self-same narrow interests over the centuries!
That review must be encouraging for the gold-trading member for Mar-a-Lago S.
My main concern with the bar chart is the relatively low % (18%) of people who blame the Bank of England. Probably because monetary policy isn’t discussed or challenged on MSM much (except by you), and the actions of the BoE are rarely challenged, except to agree or disagree with the amount they raise or lower interest rates by.
You are doing your bit, but we have to get that 18% figure UP, to make sure that the person responsible for strangling our economy, one Andrew Bailey, and the MPC, get their appropriate share of the blame (and a P45).
That is worrying
My videos on the Bank of England are always amongst the most popular.
Does Rachel Reeves interview on the BBC, where she effectively abandons Grangemouth; and seems to think the consolation for Scots in Grangemouth is investment in Tees-side, think that is an answer?
This is no way to go about the planned move to renewables, and an innovation driven Green future; by de-industrialisng Scotland faster than the transition.
“A Scottish Labour MP has compared the closure of Scotland’s only oil refinery to the ‘social devastation’ caused by the closure of coal mines across the United Kingdom under Margaret Thatcher in the 1980s.
Brian Leishman, Labour MP for Alloa and Grangemouth, has been critical of the current government’s direction under Keir Starmer. He has recently urged ministers to step in and save Scotland’s sole oil refinery, which is expected to close by the summer at a cost of 400 jobs.
Petroineos, a joint venture between Ineos and PetroChina, has said the decision to discontinue Grangemouth was because of increased competition from industrial sites in Africa, Asia and the Middle East.
Leishman told PoliticsHome he believed the government had not done enough to save an integral pillar of ‘national infrastructure’, which in turn would make the UK more reliant on hostile nations for oil and gas.
‘The closing of the refinery is not just a constituency issue for Alloa and Grangemouth, it’s a Scotland-wide issue’, he said.
This is a vital key piece of national infrastructure. The problem we’ve got as well is, it is not only in the hands of one foreign power, in the Chinese Communist Party, but also in the hands of a multi-billionaire private capital owner.
‘It will decimate my community. There will be massive implications and knock-on effects for local businesses. The easy comparison is what happened to the mining communities; we have an unjust transition and it is a disaster for workers.’ The refinery was opened by BP in 1924 and is the United Kingdom’s oldest refinery.” (Politics Home, 22nd January, 2025).
I can only assume that Labour is on a political suicide mission in Scotland; it is certainly closing in on total self-destruction. Scotland, as Britain’s boot-scraper. It fits with a Party that sat for fourteen years in-fighting over the detritus over dead ideology, and two completely dud factions comprising ambitious fools battled to control a Party; that was thus unprepared for Government and given insufficient thought to anything beyond themselves, and has completely botched doing Government.
Shame on them all.
Are the real house building ‘brownfield sites’ empty shops and offices in town centres?
Who knows?