Week in Business: Is Keir Starmer leading the UK into recession?
The Prime Minister, in his own words, in City PM, vowing to unleash the animal spirits of the private sector. It was intoxicating stuff, but does it stack up?
In his article Starmer heaps praise on “entrepreneurs who work day and night to build a business from scratch” and the “family companies that have passed know-how across the generations.”
Those entrepreneurs are currently braced for a spike in the cost of employing people in their fledgling businesses while the family firms that Starmer celebrates have been knocked for six by potentially ruinous changes to the inheritance tax system.
The PM writes that economic growth is “the number one mission of this government” but the evidence suggests this zeal is more a panicked afterthought than a foundational purpose.
On the day that the PM’s article ran in City PM, the Resolution Foundation – a think tank with close links to Downing Street – warned that the UK was entering recession territory as firms adapt to a wave of cost and tax increases coming into effect next month, alongside the imposition of new employment legislation that makes a mockery of Starmer’s claim to be slashing regulations that hold businesses back.
The government’s deregulation agenda is welcome but it only feels radical because it’s a Labour government doing it. It isn’t actually that radical at all, it should have happened years ago and we can slam the Tories for not lifting a finger in this area but we shouldn’t confuse this government’s regulatory housekeeping with a Bing Bang style revolution, because it isn’t.
And the areas where Labour has been bold – or reckless, depending on your view – on business taxes, on wage costs, on employment law, are without a doubt holding back economic growth, fuelling inflation and undermining confidence.
And it will take more than a punchy op-ed in our newspaper to make up for all that.