Labour is inflicting real economic damage

Labour has taken great delight in talking down the British economy over the past two months. Sir Keir Starmer and Rachel Reeves have missed no opportunity to remind the public that the situation will deteriorate before it improves, after they were bequeathed the “worst set of economic circumstances since the Second World War”.

Not only is the accuracy of such claims questionable but the new Government has achieved the rare feat of destroying confidence in the economy before even holding its first Budget. The latest GfK consumer confidence survey indicates a sharp fall in household morale, while the CBI recently revealed businesses fear an imminent downturn and are adjusting their plans accordingly. It is now apparent in advance of the October Budget that wealthy individuals and entrepreneurs are already fleeing the country.

Despite pre-election promises to end uncertainty and instability, by keeping a smorgasbord of tax rises on the table Labour have left companies with little option but to delay their hiring and investment plans. City grandees and influential economists are urging the Chancellor to give a message of hope, but an agenda to realise Sir Keir’s stated aim of boosting economic growth is visibly lacking.

Angela Rayner has unveiled sweeping reforms to planning rules to ease our chronic housing shortage, yet is reducing targets in areas where demand is highest. Wes Streeting has promised an overhaul of the NHS yet Labour remain doggedly committed to a healthcare system funded through general taxation in which inefficiencies and a misallocation of resources are guaranteed.

Sir Keir may want growth but the only expansion we have seen thus far is in the salaries of public sector workers and government borrowing, which this week reached 100 per cent of GDP for the first time since the 1960s. He may want “wealth creation”, but his policies will make it harder for businesses to launch, flourish and create new jobs.

Ms Reeves will need to reset the tone when she addresses Labour conference delegates on Monday but an opportunity has regardless opened up for the Tories to set out clearly how they would generate the prosperity that has evaded Britain since the global financial crisis. Where there have been pockets of growth, the proceeds have not been widely spread. Too many people have experienced 15 years of stagnant living standards, as real wage growth has plateaued whilst costs – of energy, housing or childcare – have soared.

For millions of Britons, the pain inflicted by a Labour Government devoted to hiking taxes in order to fund an ever more bloated public sector will be severe. The new Conservative leader should waste no time persuasively explaining how they will alleviate it.