Rachel Reeves strode into Number 11 Downing Street in the summer courtesy of an electorate desperate for a change.
There is no pleasure in saying that she and her boss Sir Keir Starmer have squandered much of the goodwill that accompanied them into office.
A great deal of energy was expended on convincing businesses and the City ahead of the election that the economy was in safe hands.
It is now very hard to find any of those who were wooed so assiduously with a good word to say about Labour.
Darren Jones, chief secretary to the Treasury, was on Friday emulating the Chancellor by droning on about how Labour ‘inherited crumbling public services and crippled public finances, with a £22biliion black hole.’
These socialist anti-Santas are not merely tedious, they are damaging confidence, particularly when they add in divisive rhetoric extolling the public sector over wealth-creating private enterprise.
Fun and games: Rachel Reeves and her boss Sir Keir Starmer have squandered much of the goodwill that accompanied them into office
As the CBI reports today, firms expect a steep decline in business as we move into the New Year.
Its surveys indicate the economy is heading for ‘the worst of all worlds’. Bosses are expecting inflation to rise, accompanied by reduced output and hiring.
The City is in downbeat mode after an exodus of companies from the London stock market and a relative dearth of new listings. The float of French media enterprise Canal+ last week was a rare exception and even that was something of a flop.
One in three companies on the supposedly go-go AIM market for growth companies is at risk of being taken over next year according to brokers Peel Hunt, who foresee a ‘swarm’ of bidders attracted by rock bottom prices.
Reeves could do something about this by heeding the clamour to get rid of stamp duty on share transactions. She has so far turned a deaf ear and risks taxing the stock exchange into extinction.
She delivered a dreadful budget, but she could still give us all a belated Christmas present by ditching the duty as soon as possible in 2025.
That might help reverse the tide of investors, both large and small, choosing to put their capital into the US, not the UK.
On that score, Sir Nigel Wilson, the chairman of Canary Wharf, cites some fascinating figures.
In the early 2000s, Footsie telecoms giant Vodafone had a market value of $210billion, which was 40 times more than Apple at $5billion. In 2024, Apple was valued at $3.7trillion, which is more than the entire UK economy and 160 times Vodafone at around $23billion.
Two other US tech stars, Microsoft and Nvidia, have also been valued at around the same as the UK’s annual output at various points this year.
Sobering. But there is no inherent reason why our economy should trail the US – it performed in line between 1955 to 2005 in terms of real wages, GDP per capita and equity returns.
Unfortunately, the recent trend is not likely to reverse under Reeves and Starmer.
Michael Spencer, as a former treasurer of the Conservative party, is not a neutral. But it is hard to disagree with him when he told the Mail on Sunday this is the most socialist administration the country has had, by a large margin.
The UK is still a great country with some amazing assets, including our financial services industry, life sciences, the creative sector and more.
But the problem with socialists, as the old saying goes, is that sooner or later they run out of other people’s money.
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