HUGO DUNCAN: Labour’s dealt the economy a hammer blow. Joblessness is soaring. Now you are about to pick up the tab…

By HUGO DUNCAN

Updated: 12:03 BST, 10 June 2025

The cost of Labour is becoming clearer by the day.

Sir Keir Starmer may believe Labour has ‘fixed the foundations of the economy’.

But official figures today display quite the opposite.

They show his Chancellor Rachel Reeves has dealt the economy – and our prosperity – a hammer blow.

And few will be feeling it more than the 109,000 who lost their jobs in May – the month after Labour’s punishing tax hikes walloped British business.

It is no surprise to see the Chancellor’s anti-enterprise and growth-sapping policies hitting jobs.

After all, she herself has in the past described the national insurance contributions paid by employers as a ‘tax on jobs’.

Indeed it is. Yet she went ahead with a £25billion increase in the levy anyway, making it more expensive for firms to hire staff and breaking a Labour manifesto pledge in the process.

Sir Keir Starmer may believe Labour has ‘fixed the foundations of the economy’, but Chancellor Rachel Reeves has dealt the economy – and our prosperity – a hammer blow, says Hugo Duncan

A women protests against Labour’s economic policies while holding a sign saying ‘Kid Starver out’

This coincided with an inflation-busting hike in the minimum wage, increases in business rates and a new package of workers’ rights that is set to cost business £5billion a year.

The result? A 274,00 fall in what the Office for National Statistics calls ‘payrolled employees’ in the past year. And an unemployment rate of 4.6 per cent – the highest for almost four years and up from 4.1 per cent when Labour came to power.

So it is the very ‘working people’ Labour claims to be protecting that are paying the price.

Yes, there was a welcome bounce in economic output at the start of this year after Britain ground to a halt in the wake of the election as Labour’s gloomy rhetoric dashed confidence.

But it will be short-lived unless Labour can unleash the ‘animal spirits’ of private enterprise and give businesses the space they need to invest, grow and employ.

That starts with this week’s spending review.

But will we see the sort of spending restraint required to put our creaking public finances back on an even keel and give the Chancellor space to cut taxes to kick-start growth? Of course not.

Which means another round of tax hikes is coming this autumn, dragging the economy further into the mire and leaving us all worse off.

And it will be Middle Britain that picks up the tab, with higher taxes on income, savings, pensions, inheritance, work and success.

Far from ‘fixing’ the economy, Labour’s addiction to big state tax and spend is clobbering it. And we are all paying the price.

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HUGO DUNCAN: Labour’s dealt the economy a hammer blow. Joblessness is soaring. Now you are about to pick up the tab…

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