Labour is procrastinating over policy as UK’s economy goes backwards | Phillip Inman
There is a heavy cloud hanging over Labour’s Christmas celebrations.The most recent figures show the economy is going backwards and worse, the slide is prompting recession talk in the corridors of City banks.If there is a recession, it will only be slight, but with unemployment rising and businesses reluctant to invest, the economy remains stuck in first gear.In this gloomy atmosphere, not many Labour MPs will feel comfortable donning paper hats and toasting their leaders.Especially not when Whitehall is dominated by a single activity – procrastination.
That is, when it comes to boosting the economy.Time after time, a department produces a document setting out a problem and a framework for dealing with it, often winning cross-party praise (this summer’s industrial strategy being a case in point) only to freeze when considering what should happen on the ground.And then, after months of delay, a quick decision is made that ends up being harmful.The new business rates regime is the latest example.Since the budget last month, pubs and hotels have been calculating how much they will pay from April under a regime pieced together by Treasury officials without apparently being road tested.
Small, independent pub chains will be among the worst hit, with some saying the rise in business rates will be 500% or more for an individual pub.Signs have begun appearing outside local taverns – 200 and counting – barring Labour MPs with the #taxedout slogan.The campaign, which originated at the Larder House pub in Bournemouth, is a painful reminder of the delicate ecosystem in publand and the difference between massive chains such as Wetherspoons and the much smaller local pub groups, often operating on wafer-thin profit margins.James Fowler, owner of the Larder House, called the changes a “devastating blow”.He was joined by Andy Lennox, owner and managing director of the Fired Up Collective, which operates three pubs and three restaurants in and around Dorset.
Lennox told the Caterer magazine: “One of my pubs, The Old Thatch, is Dorset’s best pub having won pub of the year, I employ 200 people and turnover is good – we’re not in a bad place, but we’re just not making any money.”He says his business rates are poised to increase 126% by 2028.“We took £1.5m last year and made £50,000 – what’s the point?”It’s the same Whitehall mindset that identifies farmers as a legitimate target for extra tax.Rachel Reeves wants farmers to pay a new inheritance tax (IHT) levy from next April that in many cases denies them passing on the land to their children.
Despite a tweak in the recent budget, farmers say the IHT changes will be too onerous and many farms will be sold, most likely to private equity firms or foreign businesses,It should go without saying that farmers are different,A report by an independent body or even a conversation with the farming community would have revealed why it is not like other industries,For one thing, like pub owners, they can occupy expensive land and yet operate on slim margins,It is the same for family businesses.
A panicked grab for cash in the chancellor’s first budget meant family-owned businesses must also pay IHT after four decades of not paying any.The previous justification for not paying IHT was that the assets were worthless as long as the owners kept the business going.If the assets were put up for sale, then capital gains tax would apply.Without a sale, the assets were passed through the generations.Understandably, family businesses have proved reluctant to make much noise about their predicament.
The cost of living crisis means that special pleading by a group with significant paper wealth is not a good look.All these tax increases should be reviewed and their effects reduced.Otherwise, much of British farming and the family business sector will be shut down or sold off to foreign interests.This trend is already under way, but is likely to accelerate from next April when the new taxes take effect.One reason procrastination has become such a problem is the Labour leadership’s two-term, 10-year project, which allows for endless meetings and delayed decision-making.
This contradicts the short-term demands of Keir Starmer’s advisers, who want to put every decision through an election MRI scanner to decide whether it is a vote winner in next year’s local elections and the 2029 general election.With these cross-currents sweeping ministers this way and that, almost on a daily basis, it becomes difficult to reflect on proposals, checking for the unintended consequences.It’s possible the economy will hand Labour a new year present and the recent run of poor economic data transforms 0.1% monthly contractions into 0.1% increases.
Yet, for the long-term health of the economy, the inherent contradiction of procrastination and electionitis will mean that the industrial strategy, most of the proposed new towns, local government reform and much public investment remains stuck in the Whitehall mud,And a series of poorly targeted taxes will, in the meantime, hit British businesses, which could do without the extra punishment,
Almost half of people using employment providers threatened with payment suspensions, new data shows
Almost half of all people using employment services received threats to suspend their payments in the last quarter, new data has revealed.The data from the Department of Employment and Workplace Relations (DEWR) showed a 23% increase in the number of payment suspension notices issued by Workforce Australia, with 618,000 issued from 1 July to 30 September 2025, up from from 504,000 in the previous quarter.It comes as advocates call for a pause in suspensions until the government can ensure the target compliance framework (TCF), the automated system that runs mutual obligations and has just been investigated by the commonwealth ombudsman, is working legally.In an October 2025 Senate estimates hearing, Senator Jess Walsh said the government knew Centrelink payment suspensions were causing harm, but defended leaving them on despite questions over whether they were used lawfully.Of the 618,000 payment suspension notices issued, 347,000 were issued by employment service providers and resulted in at least a temporary pause of payment
How many more times will the Bank of England rescue Rachel Reeves? | Richard Partington
In the economic gloom of Labour’s first year in power, Rachel Reeves has had a reliable shred of comfort to cling to: five times since the general election, the Bank of England has cut interest rates.This week, in all likelihood, the chancellor will get a sixth to shout about, as Threadneedle Street prepares to reduce borrowing costs in an early Christmas present that will be seized upon by the Treasury.The view in the City is that a festive cut on Thursday is odds-on. After last week’s disappointing October growth figures, the jobs market and consumer prices data due out on Tuesday and Wednesday – before the rates decision – are expected to confirm that inflationary pressures in the UK economy are fading.But while a cut will be good news for businesses, mortgage borrowers and the beleaguered occupants of Downing Street, attention will quickly shift to the prospects for 2026
Crypto mogul Do Kwon sentenced to 15 years in prison for fraud
Do Kwon, the entrepreneur behind two cryptocurrencies that lost $40bn (£29.8bn) three years ago and caused the sector to crash, has been sentenced to 15 years in prison for fraud.The South Korean, 34, had pleaded guilty to two counts of US charges of conspiracy to defraud and wire fraud.Kwon, who co-founded Singapore-based Terraform Labs and developed the TerraUSD and Luna currencies, was sentenced at a hearing in New York.The US district judge Paul Engelmayer called his crimes “a fraud of epic generational scale”
Elon Musk teams with El Salvador to bring Grok chatbot to public schools
Elon Musk is partnering with the government of El Salvador to bring his artificial intelligence company’s chatbot, Grok, to more than 1 million students across the country, according to a Thursday announcement by xAI. Over the next two years, the plan is to “deploy” the chatbot to more than 5,000 public schools in an “AI-powered education program”.xAI’s Grok is more known for referring to itself as “MechaHitler” and espousing far-right conspiracy theories than it is for public education. Over the past year, the chatbot has spewed various antisemitic content, decried “white genocide” and claimed Donald Trump won the 2020 election.Nayib Bukele, El Salvador’s president, is now entrusting the chatbot to create curricula in classrooms across the country
Hendy hat-trick helps Northampton to Champions Cup stroll against Bulls
On the face of it Northampton are flying in the Champions Cup courtesy of two consecutive bonus points wins. The more pedantic-minded might also point out that both their opponents have fielded below-strength sides, but when the qualifying sums are completed next month that will not be the top line as far as the Saints’ management are concerned.Because regardless of the depth of the resistance they are facing, Northampton are again underlining their ability to pick apart sides who give them too much space and time. On this occasion they rattled up eight tries, including a hat-trick for George Hendy, two for the fit-again Ollie Sleightholme and one for the roaming Henry Pollock, who showed a further glimpse or two of his rare talent.One searing diagonal burst by the 20-year-old England back-rower, stopped only by a tap tackle within sight of the line, was the most obvious retort to the pre-match lip-smacking in South Africa at the prospect of him venturing down a dark alley populated by hard-nosed Afrikaaners unimpressed by his growing international reputation
Ten-try Harlequins cruise to Champions Cup rout of understrength Bayonne
Christmas is a time for giving and Bayonne presented this game to Harlequins by selecting an inexperienced side who realistically stood no chance. Manu Tuilagi and Gareth Anscombe were listed as injured, along with plenty of others, but four frontline players were rested. There was nothing wrong with Bayonne giving Jonah Thompson, a 20-year-old Australian, his professional debut against rugby royalty in south-west London: but the fact he is a flanker, and was pressed into service on the right wing, was arguably pushing it a bit far.The Champions Cup is supposedly an elite competition and that should be celebrated whenever appropriate. But the current format means too many clubs are selecting weakened sides for matches they regard as unwinnable – or rather, when they think others are more winnable
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