David Vance SubstackRead More
If the UK economy was a patient, it would be on life support. The final figures for 2025 have been released and “growth” in the final quarter was 0.1%. In order words, we are close to being totally stagnant. UK GDP for the entire year was a humble 1.3%. To provide context, US GDP growth in 2025 in most recent period was 4x that of the UK.
Now some might think this are just random dry economic statistics but they are the measure of the beating heart of our businesses the length and breadth of the country. In summary, we are in bad shape and it can be firmly laid at the door of this Government and Rachel Reeves in particular. Both Labour and the media seem a bit surprised we are in the economic doldrums but what do you EXPECT when you hike the tax burden on employees, force up wages at the bottom enforcement of the scale, capture more people in the higher rate tax trap and simultaneously reward the indolent? Everything we see is absolutely predictable yet the ONS spends its time scrambling about trying to find arcane reasons for this slump we are in.
Against this backdrop of economic stagnation, consider how the socialist Government has forced through wage growth in the public sector. Annual growth was around 7.6% in the public sector and 3.9% in the private sector. So the non-productive part of the economy is being amply rewarded at the expense of the productive sector. This is backwards economic policy and it is the reason why ALL Labour Governments end up bankrupting the country. When you then look at the massive hikes in the minimum wage forced through by Reeves, 11% in two years, you see business being encouraged to reduce the number of number of marginal value employees. That is WHY jobs ate disappearing like snow off a ditch. We have lost a quarter of a MILLION jobs since Labour came to power and a disproportionate large % of those are amongst young people. The hike in minimum wage costs jobs but makes Reeves and her associates feel good. When they see “we are lifting people out of poverty” what that means is they are plunging people into welfare dependency.
And yes, that is also reflected in the stats! (I do love stats, as you may well have noticed) The number of people who claims benefits in this country and who do not work is 1.6m. 400,000 graduates aged 16–64 were out of work and on Universal Credit.
At every level in our country, the economy is broken. We have high taxes, high energy costs, legislation hostile to business and the inevitable consequence are in these GDP figures.
