Rachel Reeves has lost control
On Tuesday, Sir Keir Starmer told the nation that the Government's U-turn on cuts to winter fuel payments was the result of 'better growth'. On Wednesday, Rachel Reeves felt able to announce billions of pounds of new spending on public services and infrastructure. And on Thursday, April's GDP figures showed the biggest monthly drop since 2023 as Labour's tax hikes came home to roost.
It is hard to think of a better summary of the mess this Government has made of its messaging and this nation. After less than a year in office, Rachel Reeves and Sir Keir Starmer appear to have run out of ideas entirely.
As Paul Johnson of the Institute for Fiscal Studies has pointed out, the notion that this was a careful exercise in cutting the waste in state spending is without merit. There is no 'particular area of spending' where the Government has decided to 'withdraw', with virtually every department facing 'exactly the same cut in its administration budgets'.
Moreover, the plan for dealing with the NHS – an organisation that has translated massive rises in the number of hospital doctors and nursing staff employed into an 8 per cent fall in productivity since 2019 – is to simply throw more money onto the furnace. Yet while Sir Keir and Ms Reeves feel ready to start splashing the cash on the Government's favoured causes, the underlying state of Britain's finances remains parlous, with any knock to growth likely to trigger further tax rises.
The blunt truth of the matter is that this country is on an unsustainable fiscal course, and that tough decisions will need to be faced if we are to rectify this. The evidence to date is that this Labour Government is unwilling and unable to take them.
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