Chancellor Rachel Reeves has made so many awful mistakes it’s hard to keep up.
Attacking the winter fuel payment within weeks of the election triggered a humiliating U-turn. Talking down the state of the UK economy to justify a brutal tax blitz in her maiden Budget was another disaster, crushing economic sentiment at a stroke. When it came, her Budget was a betrayal, hitting us with £40billion of taxes, far above the £8.5billion floated during the election. Reeves then faced another climbdown as her plan to trim the ballooning welfare bill was shot down by Labour backbenchers.
Since then, the missteps have kept coming, including last year’s chaotic second Budget, which pushed the total tax take towards £70billion. Farmers, small businesses and working taxpayers have all taken a beating. Of all Reeves’s errors, I reckon the most damaging came in her first Budget. Loading an extra £25billion onto employers’ National Insurance costs has triggered a jobs bloodbath. The Chancellor saw it as an easy revenue grab, but her ‘jobs tax’ has triggered an economic and social disaster that could scar Britain for a generation.
Reeves keeps claiming she’s “restored stability” but that’s rubbish. Britain is in a mess, and now the consequences could spill onto the streets.
Labour doesn’t understand how business works. Whether they’re FTSE 100 giants or small cafés and pubs, they’re all treated as greedy capitalist enterprises ripe to be squeezed for tax. The proceeds are then funnelled into welfare benefits and public sector pay.
What Reeves forgets is that business is the engine of the economy, creating wealth, providing jobs and filling the Treasury’s coffers. But now she’s throttled the golden goose. The NI raid helped killed economic growth and drive employment to a five-year high of 5.2%, destroying at least 325,000 jobs. Youngest workers are being hit hardest of all, as employers now pay NI on part-time workers earning as little as £5,000.
Reeves has compounded this with two inflation-busting minimum wage hikes, making younger staff almost as expensive as experienced ones. Employers are plumping for the latter. If they hire anyone at all.
Angela Rayner’s Employment Rights Bill will add yet more red tape and make employees reluctant to take on new staff because they won’t be able to get rid of the slackers and shirkers. Incredibly, Labour is doing this at a time when AI is wiping out entry-level jobs. It’s madness.
As young people struggle to find jobs, they’re likely to get angry. Last week offered an early warning, as gangs of youths rampaged through Clapham High Street. There’s even been trouble in Milton Keynes, sparked by an Easter egg hunt. I fear disorder could spread as summer arrives.
The ages of those arrested so far range from 13 to 17. Most involved are still at school. But they know what lies in wait. This is a bleak time to be young, with jobs thin on the ground. Youth unemployment is now higher than in France, long plagued by a rigid labour market. Incredibly, we’re taking the lead from that country’s bad example.
Almost a million young Britons are classed as Neets – not in education, employment or training. That’s roughly one in four in London. Those numbers are rising fast, thanks to Reeves and Rayner. A report into the 2011 London riots showed six in 10 were unemployed. As their numbers swell, more social disorder is a clear risk
Susan Hall, who challenged Sadiq Khan to be Mayor of London in 2024, says youth joblessness “will definitely be contributing” to the scenes seen in Clapham last week.
Youngsters are also feeding on a wider sense of lawlessness in the adult world, as PM Keir Starmer releases 50,000 criminals early and shoplifting becomes a socially acceptable pastime.
Let’s hope I’m wrong, and we escape widespread unrest. Reeves has locked a generation out of the labour market, potentially for good. That would be a lasting scar on their lives and the UK economy, and the darkest mark on Reeves’s record. Which is saying something.