Nothing shows Labour’s poor economic management more than their baffling attempt to blame British industry for the country’s economic woes.
It is true that neither the Prime Minister nor the Chancellor are to blame for the explosion in Iran or the energy crisis that has engulfed us.
There is no law for Donald Trump’s reckless actions.
The oil and gas boom that is slowly lifting our economy is the biggest test this government has faced since it came into office.
However, the best Keir Starmer and Rachel Reeves have done in response is to call business leaders and warn them against ‘price gouging’ – a finger-wagging gesture taken from the socialist textbook.
Their poor performance reflects a fundamental failure to understand how the economy works, let alone how to get us out of this mess – a depth of ignorance that fills me and the elites I talk to in the financial world without fear.
When we get into any international crisis, one would expect ministers to try to keep the country’s exporters and fuel traders at bay. After all, it was the supermarket giants and their associates who kept the public supplied and fed during this pandemic.
So, it’s no wonder that supermarket bosses were surprised last week when the Chancellor told the House of Commons that they would be ordered to Downing Street, as part of a plan to lower prices. In that event, most of them refused the summons, sending their junior colleagues.
Supermarket bosses were shocked last week when the Chancellor told the House of Commons they would be ordered to Downing Street, as part of a plan to cut prices.
The sight of supermarket managers being dressed by Reeves may have gone down well in Labor backrooms and in the Left-wing media, but it did not reflect the knowledge of fierce price competition that has gripped Britain’s high streets.
Such ignorance is, sadly, justified. And Labour’s pre-election love affair with business is broken and broken.
You may recall that in May 2024, 120 prominent business leaders including Wikipedia founder Jimmy Wales and Heathrow chief John Holland-Kaye signed a letter to the press expressing a desire to end an economy ‘damaged by uncertainty’.
Not so easy digging for the Tories. They wanted to work with a reformed Labor Party. How stupid that group of zebra singers must be right now.
Just how toxic the relationship between Britain’s big corporations and the government has always been was clearly shown a few days ago when Stuart Machin, the conservative boss of Marks & Spencer, felt compelled to attack, criticizing Reeves’ “green” taxes for damaging businesses and “letting down the young generation”.
It seems to me that the real April Fools are sitting in the Cabinet, imposing additional costs with new increases in the minimum wage and business rates (both of which come into force today) and when the energy bills and the economic outlook, which is already poor, collapse completely.
Labour’s £75billion tax hike is the beginning and end of this depraved folly. Even before the current crisis, they stifled profits and investment, thus sowing the seeds of recession, inflation and rising interest rates. Britain was at peace long before the mullahs’ rockets destroyed the Gulf’s refineries and closed the Strait of Hormuz.
In the face of the coming crisis, our country is woefully unprepared – which is why blaming business for the government’s economic inefficiency is grossly irresponsible.
A leading Paris-based think tank, the Organization for Economic Co-operation and Development, recently took a major hit on Britain’s growth outlook, lowering its forecast for this year’s output by half a percentage point to 0.7%.
It also raised its UK inflation forecast to four percent, which is twice the Bank of England’s target and the highest among the richest G7 countries.
Britain could face a consumer price crisis as soon as 2022 when inflation rises to a 41-year high of 11.2 per cent.
The International Monetary Fund warns that our dependence on gas imports means that we, along with Italy, are more exposed to inflation than other European countries. However, today the Institute of Directors says that the conflict in the Middle East has caused the confidence of business leaders to drop to the lowest level of all.
The boss of one of Britain’s leading packaging firms told me this week that the new packaging tax – another unlikely ‘green’ one – adds three per cent to his company’s costs and could itself wipe out the group’s profit margins.
Most of the strong will to call out oil companies, energy brokers, and petrol fronts as enemies of consumers comes from Energy Secretary Ed Miliband. No wonder there. Miliband, who is responsible for many of the most damaging restrictions on British industry, is reported to be ‘desperate’ about the prospect of a profit in the fuel market.
It is clear that there will be examples of overreach by other fuel stations. It is also true that, when it comes to energy supply, the ‘rocket and feather’ principle often applies, with prices rising rapidly in times of depression and falling slowly in better times.
Yet Miliband and Reeves are committing a major act of dishonesty. The biggest beneficiary of higher council prices is the Treasury: together, fuel tax and VAT make up 70 per cent of the price you pay at the pump.
The reality is that there is more they can do to protect British people and businesses before the next storm. Governments around the world, from Italy to Australia and Spain to Thailand, are taking drastic measures to do just that.
Fuel consumption has been reduced, free public transport has been provided, and in some cases food distribution has been introduced. Substantial financial assistance is provided for heating bills.
Yet here in Britain, there is almost no response at all, apart from a desperate attempt to blame ‘big business’ for our economic woes. It is as if our government has abandoned all control of the situation.
Labor politicians must buckle down, drop the socialist doctrine and focus on what works.
They need to understand that there is no way to a healthy economy without the help of private businesses: the productive part of the economy that earns money to pay the rising debts caused by this government’s negligence.
Starmer and Reeves in particular need to tone down the anti-business rhetoric and realize that tax trade freezes are a path to inflation, recession and bankruptcy – and very dangerous at a time when the global economy is teetering on the edge of the abyss.
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