Nothing better illustrates Labour’s hopeless mismanagement of the economy than its ludicrous attempt to blame British industry for the nation’s economic ills.
It’s true that neither the Prime Minister nor his chancellor are to blame for the bombing of Iran or the resulting energy catastrophe now engulfing us.
There’s no legislating for the reckless actions of Donald Trump.
The oil and gas shock slowly upending our economy is by far the greatest test this government has faced since coming to office.
Yet the best that Keir Starmer and Rachel Reeves have managed in response is to summon corporate leaders and warn them against ‘price gouging’ – a display of finger wagging taken straight from the socialist handbook.
Their atrocious performance shows a fundamental failure to grasp how an economy works, let alone how to get us out of this mess – a depth of incompetence that fills me and senior figures I speak to in the world of finance with nothing but foreboding.
Going into any international crisis, one would expect ministers to try to keep the nation’s grocers and fuel suppliers onside. It was, after all, the heroics of the supermarket chiefs and their colleagues that kept the nation supplied and fed during the pandemic.
So, it’s no wonder that supermarket bosses were taken aback last week when the Chancellor told the House of Commons they would be ordered to Downing Street, as part of a mission to get prices down. In the event, most of them declined the summons, sending more junior colleagues.
Supermarket bosses were taken aback last week when the Chancellor told the House of Commons they would be ordered to Downing Street, as part of a mission to get prices down
The sight of supermarket bosses being dressed down by Reeves might have gone down well on Labour’s fractious backbenches and in the Left-wing media, but demonstrated no knowledge of the fierce price competition gripping Britain’s high streets.
Such ignorance, sadly, is par for the course. And Labour’s pre-election love-in with commerce is well and truly shattered.
You might remember that in May 2024, 120 prominent business leaders including Wikipedia founder Jimmy Wales and Heathrow boss John Holland-Kaye signed a letter to a newspaper expressing a desire for an end to an economy ‘beset by instability’.
A not-so-subtle dig at the Tories. They wanted to work with a ‘changed’ Labour Party. How foolish that choir of toadies must feel now.
Just how toxic the relationship between Britain’s leading corporations and the government has since become was vividly demonstrated just a few days ago when Stuart Machin, the normally cautious boss of Marks & Spencer, felt compelled to go on the attack, condemning Reeves’ ‘green’ levies for destroying businesses and ‘letting down a generation of young people’.
It seems to me that the real April Fools are sitting in Cabinet, imposing extra costs through new rises in the minimum wage and business rates (both of which come into force today) even as energy bills rocket and the economic outlook, already poor, crumbles away entirely.
Labour’s £75billion of tax rises are the beginning and end of this perverse folly. Even before the current crisis, they stifled profits and investment, thereby sowing the seeds of recession, surging inflation and rising interest rates. Britain was in a parlous state well before the mullahs’ rockets destroyed Gulf refineries and closed the Strait of Hormuz.
In the face of the coming crisis, our country is hopelessly ill prepared – which is why blaming business for the government’s own economic incompetence is disingenuous on a grand scale.
A leading Paris-based think-tank, the Organisation for Economic Cooperation and Development, recently took a meat cleaver to British growth prospects, slashing the output forecast this year by half a percentage point to a pathetic 0.7 per cent.
It has also raised its UK inflation projections to four per cent, twice the Bank of England’s target and the highest among the richest G7 countries.
Britain could face a blow to consumer prices every bit as devastating as 2022 when inflation shot to a 41-year high of 11.2 per cent.
The International Monetary Fund warns that our dependence on imported gas supplies means that we, along with Italy, are more exposed to inflation than the rest of Europe. Today, meanwhile, the Institute of Directors says that the Middle East conflict has driven confidence among business leaders to an all-time low.
The boss of one of Britain’s leading packaging firms confided to me this week that a new packaging tax – yet another unaffordable ‘green’ measure – was adding three per cent to his company’s costs and on its own could erase the group’s profit margins.
Much of the dogmatic drive to label the oil companies, energy suppliers, and petrol forecourts as enemies of the consumer comes from Energy Secretary Ed Miliband. No surprise there. Miliband, responsible for so many of the most damaging restrictions on British industry, is reportedly ‘obsessed’ with the spectre of fuel-market profiteering.
Clearly, there will be examples of over-reach by some fuel stations. It is also true that, when it comes to energy supplies, the ‘rocket and feather’ principle tends to operate, with prices rising rapidly at times of stress and falling slowly in better times.
Yet Miliband and Reeves are engaged in a huge act of dishonesty. The biggest beneficiary of higher forecourt prices is the Exchequer: together, fuel duty and VAT make up 70 per cent of the price you pay at the pump.
The truth is there is plenty they could do to protect British people and businesses ahead of the coming storm. Governments around the planet, from Italy to Australia and Spain to Thailand, are taking radical steps to do just that.
Fuel duties have been slashed, free public transport provided, in some cases rationing has been introduced. Huge financial assistance has been offered with heating bills.
Yet here in Britain, there has been almost no response at all, aside from a knee-jerk attempt to blame ‘big business’ for our economic woes. It’s as if our government has relinquished all control of the situation.
Labour politicians must get a grip, abandon socialist dogma and concentrate on what works.
They need to understand that there is no route to a healthy economy without the help of private enterprise: the productive part of the economy which earns the money to pay the ever-rising bills incurred by this government’s profligacy.
Starmer and Reeves in particular need to dial down the anti-business rhetoric and recognise that taxing enterprise to a standstill is the road to inflation, slump and ruin – and truly pernicious at a time when the global economy is teetering on the edge of an abyss.
