Arrogant Labour has played fast and loose with the jobs market
As the first full calendar year of life under this Labour government comes to a close, it’s an appropriate time to reflect on how they’ve done and how their promises to renew Britain marry up with reality.
How can I put this delicately?
Ministers should slope off to their constituencies this Christmas with their heads hanging in shame.
Chances are they won’t be able to console themselves with a drink at the local pub (as swathes of the tax-battered hospitality sector have banned Labour MPs) but fingers crossed they can find a quiet moment to reflect on what their time in office has done to the private sector economy.
This time last year the unemployment rate was 4.3 per cent; today it is 5.1 per cent. Among the many victims that these dry-sounding figures conceal are 85,000 18-24 year olds who joined the ranks of the unemployed in the three months to October. Almost 40 per cent of that age group are out of work.
The last time the labour market was this fragile was March 2021, 12 months into a catastrophic pandemic. Prior to that, you have to go back a decade, to November 2015 and the depths of what Labour insist on calling David Cameron and George Osborne’s “brutal austerity.” The difference is that at that point unemployment was on an undeniable downward trajectory from its post-financial-crisis high, and it only started to climb again (from a low of 3.7 per cent) as Covid took hold.
National Insurance hike was the original sin
Redundancies are now at their highest level since February 2021; there were 156,000 layoffs in the three months to October. Many factors are in play, but the original sin of this government, the foundational error, was to increase employment taxes in its first Budget. It followed this act of arrogance with a messianic commitment to the Employment Rights Bill and topped it off with a reckless announcement last month that the minimum wage will increase again.
If the economy were growing in a meaningful way (it is not) and if wider government policy and political strategy whipped up some confidence and optimism (both are in short supply) then businesses may – in aggregate – have weathered the storm whipped up by this barrage of left-wing labour market policies.
Instead, as the private shrinks the public sector grows. That is a road to ruin, and it is a road down which we are being dragged by this government.