Do you remember Rachel Reeves and issues as mundane as how badly she is managing the UK economy? I almost look on moaning about such things with a slight sense of nostalgia. If only that were all we had to worry about now.
Except we have, of course, to still worry about such things. This is from The Guardian this morning, based on the latest announcement on employment data from the Office for National Statistics, out this morning:
The number of employed people in the UK has fallen again, particularly in shops, restaurants and hotels, reflecting weak hiring, while private sector wages grew at the slowest rate in five years, official figures show.
Figures from the Office for National Statistics (ONS) showed the number of employees on payrolls fell by 184,000 in December compared with a year earlier, to 30.2 million.
Three thoughts.
First, the economy is very clearly weakening.
Second, there is no reason to think this is going to change.
Third, no wonder Labout has the poll ratings it has. This unemployment is the deliberate consequence of a combination of both fiscal and monetary policy that is intended to keep unemployment high so that inflation can, supposedly, be kept low, as if there is an obvious relationship between the two when, as a matter of fact, there is not.
We can, and should, condemn Trump and all he is doing. But let's not pretend there is benevolent government going on here in the UK, because there is not. We still have people running this country who think that having one in twenty people unemployed (and one in ten young people) unemployed is a price worth paying for low inflation, when it is glaringly obvious that they have not the slightest idea what is causing the inflation they are supposedly tackling.
We are a long way from being out of a mess of our own creation, in other words. The only reason we are not noticing it so much right now is that so much else is going on, but we should not ignore that Reeves, Bailey & Co are still furiously furrowing the fields for fascism to grow in right here, right now, and nor should we stop worrying about that.
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Agreed, Professor. A critical mass of angry unemployed people, combined with apparent indifference from government, is a fertile recruiting ground for fascist snake oil salesmen.
Prescient.
We plough the fields and scatter the bad seed on the land…..
Rachel Reeves seems bereft of ideas and clearly has no basic grasp of economics. The fact that tax has shifted to labour from capital would appear to be – yet another – demonstration that maintaining a level of pressure on employment and working salaries to control inflation is fundamentally flawed.
Her fascination and focus on capital and the financial markets is perverse. In a good article by Heather Stewart in the Guardian as she heads for Davos ‘Why Rachel Reeves should give bankers more of the cold shoulder at Davos 2026’ https://www.theguardian.com/business/2026/jan/18/rachel-reeves-bankers-cold-shoulder-davos-2026?CMP=Share_iOSApp_Other. In summary, “ As contributors to a timely conference at the London School of Economics (LSE) made clear last week, once a country’s financial industry reaches a certain size – which the UK’s sector has long surpassed – it stops boosting growth and starts to become a brake, a result reinforced in a string of academic papers spread over more than a decade.”
In today’s Guardian – in one of the most direct comments against neoliberal economics – Ingrid Robeyns’ article ‘In Davos, the rich talk about ‘global threats’. Here’s why they’re silent about the biggest of them all’. “ All forms of capitalism are characterised by extensive private ownership of companies as well as the primacy of the profit motive. But the specific neoliberal form of capitalism that has risen to dominance from the late 1970s onwards has additional features: the privatisation of companies previously in public ownership; a shift in power from workers to capital owners; and reduced taxes on entrepreneurs and the richest.”
“ The transition from mixed economies under social democracies to neoliberal capitalism has led to a notable increase of wealth concentration at the top, which is now eroding (and in some places even destroying) our democracies. ”
The fact that the UK government – Rachel Reeves in particular – don’t seem to understand (and possibly don’t care to understand) these fundamentals surely demands that the UKG be pressurised to change…or be changed out. Their incompetence is simply astonishing. Would appear they want to join the neoliberal clown club/oligarchy (I refuse to recognise them as elite).
Thanks.
“private sector wages grew at the slowest rate in five years, official figures show”
How do people “feel” in employment. Probably very very unhappy as increasingly they can’t afford stuff.
LINO was/is functionally incapable of delivering on the economy & wages (a cursory glance at their “crew” shows why).
You are correct: this failure fertilises the electoral ground for fascism/Fart-rage & his private company. The key now is the elections later this year.
Regardless of the result, I expect Starmer to hang on – because leaving/resigning opens the possiblity of a trip to the Hague (for him, his chief of staff and a large part of the cabinet).
I doubt he will do electoral reform. So..????
To use one of his phrases, I think everything might be on the table, except him: he will be gone.
Aside from unemployment, there is another factor that enables fascism; the media. The usual suspects( Mail, Express, Telegraph, Sun) are largely silent on Trump’s madness, but I expect them to start trying to rationalise this madness shortly. Within a few weeks, they are likely, on past form, to start supporting him, albeit with some reservation, before proclaiming him as the great ubermensch that he believes himself to be.
They would only be repeating past behaviour in favouring extreme right-wing demagogues and their ruinous actions.
In the face of a potential trade war, the risk of not having access to goods we expect to import from America, challenges on energy security, to the challenges in domestic manufacturing, the answer should be clear.
Not austerity. Not letting the malaise fester. Instead direct investment in UK companies and manufacturing, infrastructure development projects with a long-term positive return, and productivity-improving spending.
Where is our domestic drone research? Where is our investment in autonomous vehicles? Where is our investment in rail and transport infrastructure? Where is sufficient investment in upgrading the national grid so that we make effective use of the energy sources we have (I know this part is progressing, but not quickly enough)?
Also, Labour are pussy-footing around with talk of somewhat closer ties with Europe. Reform pushed aligning with the USA. That’s proving to be a terrible idea right now. Instead, work fully with Europe. Do consider rejoining the single market. Help ensure that Europe presents a more united front that’s strong enough to back down Trumpist imperialism.
What the government can’t do is timidly sit there insisting it can’t do anything about trade wars, loss of manufacturing, worsening infrastructure, worsening employment, worsening individual prospects, worsening life expectancy, because it can’t afford it. Don’t wait for catastrophe – steer away.
There is a video coming on this – probably on Thursday now.
Do you think if we kept interest rates at near zero do you think inflation would be as it is now!? Surely both households and corporations would have binged on credit and stoked everything up?
So, we need credit controls as part of economic policy, as I have long argued.
Your next argument is?
Not sure where credit controls have worked. Pretty disastrous in the 73-75 banking crisis and similar results in the US in 1980. Similarly in the 80s in Greece and the Netherlands the policy was quickly abandoned.
I think you need to do a little more research then.
Agree completely about un-employment. Leaving a substantial part of the population out of the system that works at least partially for most is very dangerous. Work has a huge range of benefits for those who can way beyond economics. I would point to a parallel with immigration policy (and previously the EU free movement) and the rise of right-wing political parties. I would argue that Brexit, UKIP, Reform and even more right-wing phenomena are to some degree symptoms of the mainstream political system failing to include a substantial group of citizens, even more of a crime if they are voters. We may not always like what our fellow citizens say and think but ignoring them and viewing them as irredeemable racists as the Tony Blair and Gordon Brown and later Conservative governments did IMHO just stokes up trouble. Pragmatism is my plea. If people feel aggrieved for whatever reason they will turn to people who say they are listening and then feed the grievances. Better the mainstream does the listening, however hard that might be. Polarisation is to be avoided, it’s bad enough with two political parties fighting it out now, there are more on the way and whilst diverse representation is to be welcomed if it is due to exclusion and grievance then we will suffer. Potentially more political discord and less productive political action. We need more consensus in politics, not less. That may not be well argued and I dont know how to fix it I’m afraid.
I think you’ve put your finger on something that Westminster still largely refuses to acknowledge, which is that exclusion is politically combustible.
Unemployment is the obvious example. Leaving people without work is not just an economic failure. It removes status, routine, connection and belonging. That is why it becomes socially dangerous.
But your parallel with immigration and free movement is also important. A lot of what has fuelled UKIP, Brexit, Reform and the wider radical right is not simply “racism”, even though racism is undeniably part of the story. It is also a response to being ignored by mainstream politics, and to real experiences of insecurity, whether created by falling public services, insecure work, unaffordable housing, and communities that feel they have no voice in decisions made about their lives.
When political leaders respond to those citizens primarily with contempt, moralising or dismissal, they do exactly what you suggest: they harden grievance into identity issues. People then turn to whoever offers recognition, even if the recognition comes with poisonous explanations.
So yes, pragmatism definitely matters. Listening also matters and that’s not because every grievance is justified, but because democracy requires inclusion. The politics of care cannot be selective. It has to apply even to people with whom we profoundly disagree. That doesn’t mean conceding to prejudice. It means addressing the conditions that breed it whether they be insecurity, abandonment and the sense that politics is done to people, not with them.
On consensus: I think you’re right to want more of it, but it has to be a consensus built on shared material security, not forced agreement. When people feel safe, they become more tolerant. When they feel threatened, they polarise. Th.at’s not a moral failure. It’s a predictable human response. Material security matters then
The task, then, is to rebuild the economic and civic foundations of belonging, and that begins with employment, housing, services and voice.
The reason for increased unemployment at the bottom of the wage market is the increased costs imposed through increased taxes (national insurance) for employers and higher minimum wage for employees.
Both of which you supported – this is basic economics – so you are being somewhat hypocritical!
Minimum wage is affordable. I never asked for NIC increases. You are, quite simply, wrong. I criticised it.