BBC NewsBorrowing was £17.4bn last month, the second highest October figure since monthly records began in 1993.
Finito World
Sir Keir Starmer left Downing Street this week, and if you ask the average voter what he did for jobs, they will not mention the Employment Rights Act. They will mention the National Insurance rise. That is the whole verdict in one sentence, and it is not a flattering one.
The mechanics of it are worth restating precisely, because precision is not something the policy was ever credited with. In her first Budget, Rachel Reeves put employer National Insurance up from 13.8 to 15 per cent and cut the threshold at which it applies from £9,100 to £5,000, effective from April 2025, expected to raise £25 billion a year. The OBR reckoned it would cost the labour market a little over 50,000 jobs by 2029. By April 2025 alone, payroll employment had already fallen by 167,000 since the Budget was announced, and another 109,000 vanished in May. Whatever else you think of the policy, it did not undershoot.
This is the trouble with calling Starmer a centrist. Centrism is supposed to mean taking the sensible bits of both traditions and leaving the vandalism to the extremes. What Britain actually got was a government that taxed employment in a country already emerging from the most heavily taxed period in its peacetime history, then wondered why hiring dried up. Youth unemployment is now 16.2 per cent, the worst in over a decade. The number of young people not in education, employment, or training has passed one million for the first time since 2013. Ben Harrison of the Work Foundation summed it up without needing to raise his voice: “young people are bearing the brunt of today’s weak labour market.” Nobody in government seemed to plan for that outcome, which is somehow worse than if they had.
The bitterest joke is what a genuine centrist government could have done instead, and largely didn’t. Andy Burnham has been Prime Minister for a matter of hours and is already saying he will scrap the digital ID scheme that consumed a year of Whitehall’s attention for a policy nobody outside the Home Office much wanted. He has also signalled a more pragmatic line on North Sea drilling that Starmer spent two years tiptoeing around out of deference to a manifesto line few voters could recite. These were not difficult calls. They were sitting there the whole time, and it took a change of leader for anyone to pick them up.
It began with that manifesto – a document written in advance of an election he was certain to win. Unable to raise taxes in a straightforward way – a penny on income tax – he and Rachel Reeves (yet another politician who we are told is a hoot in private), resorted to fiddling around the edges with disastrous consequences. None of this makes Starmer a villain. It makes him a timid and unimaginative one.
What he now hands to Burnham is a country with unemployment at 5 per cent, vacancies at a five year low, and a workforce more protected once employed and considerably harder to get employed in the first place. Whether Burnham, whose instincts run rather more towards spending than restraint, resists the temptation to solve a jobs problem with another tax rise is the question that will define his premiership rather more than anything Starmer managed to settle in his own two years. The most damning thing you can say about Starmer’s economic legacy is not that it was cruel. It is that it was avoidable, and everyone in Westminster seemed to know it except the man signing the Budget.
