UK Economy

IT was perhaps the most famous poster in election history. “Labour Isn’t Working,” proclaimed its simple slogan above a photo of a long, snaking queue outside an unemployment office. 

The image helped Margaret Thatcher’s Tories to win a decisive victory in 1979. 

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That poster could be revived today as the beleaguered Labour Prime Minister, Sir Keir Starmer, seems to be trapped in a kind of doom loop created by his party’s epic mismanagement of the economy. 

Growth is anaemic, the tax burden colossal. Just like in the late 70s, Britain is gripped by rising debt, inflation and unemployment, as well as increasing militancy in the public sector workforce, where recent generous pay settlements have fuelled a mood of greedy irresponsibility. 

Only yesterday the distinguished business leader Lord Stuart Rose, the former head of Marks & Spencer, warned that Starmer and his bumbling Chancellor Rachel Reeves had dragged Britain “to the edge of crisis.” 

In a bleak analysis, Lord Rose argued that because “there is no growth in the economy,” neither wealth nor jobs are being created. 

The parallel with the 1970s is at its most stark in the hostility to hard work. Fifty years ago Britain became known as “the sick man of Europe” because of its addiction to strikes, with an astonishing 29million working days lost in 1979 alone. 

Modern Britain has yet to plumb those depths, though the pig-headed unions are trying to go in that direction, as shown by the current miserable strike on the London Underground, which has paralysed the capital this week. 

What makes this strike so ridiculous is that the Tube drivers are extremely well-paid, typically earning around £72,000-a-year, and enjoy excellent job security, pensions, hours and holidays. Yet they act like they are oppressed members of the proletariat. 

The same is true of the resident doctors who went on strike last month in support of an outrageous 35 per cent pay claim. 

These grotesque demands are part of a wider culture of self-serving entitlement that is destroying Britain’s work ethic, reducing productivity and weakening the dynamism of business. 

That destructive spirit can be seen in the recent surge of sick leave in the national workforce, a phenomenon caused not by harsher conditions but by more indulgent management, and the fashion for treating normal emotions as mental health problems. 

Mental-health crisis 

Yesterday a study by the Chartered Institute of Personnel and Development revealed that employees are now taking an average of nearly two weeks off sick every year. 

Only two years ago absenteeism stood at an average of 7.8 days a year. Now that figure has risen to 9.4 days a year, with the mental-health crisis the key driving force. 

All too predictably, the record of the public sector is much worse than the private sector. That is not because work on the state payroll is tougher. Just the opposite is true. 

The heavily unionised culture of public employment, with its emphasis on workplace rights and victimhood, promotes weak management and a lack of accountability. 

The rise in absenteeism is mirrored by the growth in welfare dependency where ever increasing numbers of people think that the state owes them a living. Social security is no longer just a temporary safety net but has become a comfortable lifestyle choice. 

There are now 6.5million adults of working age who are claiming out-of-work benefits, while some forms of incapacity payments have become a sort of subsidy for early retirement. 

As Lord Rose puts it, “We have arrived in a situation in Britain today where there is effectively no obligation to work, absolutely none.” 

In a recent newspaper interview, one claimant called Clare Russell gave an insight into the mentality of some of the worst freeloaders. 

Labour likes to boast that it is the party of ‘working people’. Now it should live up to that description. 

Ten years ago she gave up work at the age of 46 and since then has lived off the disability benefits she receives for a bad back, as well as a substantial rental income from some property, plus a carer’s allowance to look after her mother who lives 30 miles away. 

In her sickening interview, she said that she has “a lovely life, thanks to the great British taxpayer.” 

Just to heighten the outrage she added, “when I am at the gym, I watch young people scuttle past the window on the treadmill of work and I must admit to feeling smug.” 

The disappearance of the work ethic is neither morally defensible nor financially affordable. 

The disability benefits bill is expected to reach £100billion by 2030 while the overall cost of welfare is forecast to go up from £210billion a decade ago to £380billion by 2030. 

The welfare leviathan is tracking us ever deeper into debt and towards national bankruptcy. 

In the depths of its current political crisis, France — which has an even more lavish benefits system than Britain — shows what can happen when the cost of welfare spirals out of control. 

We were the nation of the industrial revolution. We must revive that kind of drive and determination. This should be an absolute priority for the new Labour cabinet. 

Reform of welfare and the workplace is not an option, it is a necessity. 

Labour likes to boast that it is the party of “working people”. Now it should live up to that description. 

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BRITAIN’S top restaurant chains have seen profits soar by almost a fifth after replacing staff with ­self-service tills and apps.

They hit £365million at the top 100 groups this year, up from £308million in 2024.

Accountancy group UHY Hacker Young also found that turnover was up 19 per cent to £12.9billion, from £10.8billion.

It said growth had been particularly strong for the fast food and casual dining sector, with burger and steakhouse chains enjoying some of the largest turnover increases.

UHY Hacker Young partner Martin Jones said chains had been investing in technology such as touchscreen tills in fast-food outlets.

Many had also upgraded menu offerings to increase prices, as a way of boosting earnings.

He said: “While many chains are still suffering from depressed margins and weak demand, there’s enough innovation and expansion to deliver better results.”

Hospitality has been particularly hard-hit by the increase in employers’ National Insurance.

Half of all job losses since the Budget have been in that sector, according to ­analysis of data from the Office for National Statistics by UKHospitality.

It means one in every 25 jobs in pubs, hotels, cafes, restaurants and bars has been axed.

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T&C’s ARE KAFKA-ESQUE

BANKS and insurance firms need to stop writing terms and conditions that are “longer than some classic novels”, campaigners urge.

Policies on travel insurance and investment products are the worst, clocking in at 26,000 words — around the same length as Franz Kafka’s Metamorphosis, analysis by Fairer Finance claims.

It comes despite the financial regulator in 2023 introducing rules forcing firms to prove that customers understand such documents.

Fairer Finance said the longer the documents were, the less likely customers were to know what they mean — or to engage with them at all.

Managing director James Daley added: “The grace period is now over, and we expect the regulator to start holding companies to account.”

ENERGY CRISIS

HOUSEHOLDS cannot afford more energy price hikes, the regulator has been warned.

More than 12 million people are struggling to pay already — but Ofgem is expected to announce tomorrow a rise in the energy price cap to £1,737 from October.

Commenting on the research from York University, Simon Francis of the End Fuel Poverty Coalition, said: “The time for tinkering with the price cap is over.”

RENT CONS UP

RENTERS have been warned to watch out for fake landlord scams after crooks made £20million from them last year.

The average victim lost £4,711, Action Fraud said. The total haul was up by 45 per cent on the previous year.

Richard Daniels, of TSB, said: “Scammers prey on a competitive rental market with too-good-to-be-true listings that trick house- hunters into making advanced payments.”

THE UK’s economy grew in the three months to June but slowed on the first quarter of the year.

The latest figures from the Office for National Statistics (ONS) reveal Gross Domestic Product (GDP) grew by 0.3% between April and June.

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This is lower than the 0.7% recorded between January and March, but stronger than expected by analysts.

GDP grew in the second quarter of the year mostly due to the services and construction sectors.

It’s worth bearing in mind these latest quarterly figures are estimations and are open to be revised at a later date.

Liz McKeown, director of economic statistics at the ONS, said: “Growth slowed in the second quarter after a strong start to the year.

“The economy was weak across April and May, with some activity having been brought forward to February and March ahead of Stamp Duty and tariff changes, but then recovered strongly in June.

“Across the second quarter as a whole growth was led by services, with computer programming, health and vehicle leasing growing.

“Construction also increased while production fell back slightly.

“Growth for the quarter was also boosted by updated source data for April, which while still showing a contraction, was better than initially estimated.

“Services also drove growth in June with scientific R&D, engineering and car sales all having a strong month.

“Within production, which recovered, manufacture of electronics performed especially well.”

The data today was largely expected by analysts to show the UK economy slowed to just 0.1% growth in the second quarter of 2025 after a strong start to the year.

Last Thursday, the Bank of England forecast second-quarter UK GDP growth of 0.1%, slowed from 0.7% in the first quarter.

Figures have already shown that GDP contracted by 0.3% in April and 0.1% in May.

Plus, figures on Tuesday showed the UK jobs market weakened again, but overall wage growth remains strong, prompting traders to trim their bets on the possibility of another Bank of England rate cut this year.

What it means for your money

GDP measures the economic output of companies, individuals and Governments.

If it is rising steadily, but not too much, it’s a sign of a healthy and prosperous economy.

This is because it usually means people are spending more, the Government gets more tax and businesses get more money which then means pay rises for workers.

When GDP is falling, it means the economy is shrinking which can be bad news for businesses and workers who face pay cuts or even losing their job.

The Bank of England (BoE) also uses GDP and inflation as key indicators when determining the base rate.

This decides how much it will charge banks to lend them money and is a way to try to control inflation and the economy.

If GDP is low, the BoE cuts its base rate in order to encourage people to spend and invest money.

If it is higher, the BoE may keep its base rate higher in order to keep inflation in check.

No forgiving a Brexit betrayal

WILL today go down in history as the day Sir Keir Starmer betrayed Brexit and the British people?

From the moment he entered No10, or Remainiac Prime Minister — who spent years in Opposition trying to reverse the historic 2016 vote — has been hellbent on securing a so-called “reset” with the EU.

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His approach to the negotiations with Brussels has been naive at best, and craven at worst.

Indeed, the message his public desperation sent to the hard-nosed Eurocrats was “I want a deal at any price, so shaft me”.

The vengeful EU — which will never get over Brexit, and cannot stand the idea of us being a sovereign nation again — duly obliged.

Its list of demands, in return for a defence partnership, a sop on passport queues and the simple lifting of some spiteful checks on British food exports, would put a mafia extortionist to shame.

Through a series of snide anonymous briefings (the EU’s tactic of choice for decades), we know it expects to agree the following at today’s Lancaster House talks:

Britain to slavishly adhere to every pettifogging Brussels edict on standards, a straitjacket known as “dynamic alignment” which would make trade deals with the rest of world far harder.

Subservience to the over-mighty, expansionist European Court of Justice.

Generous access to our fishing waters for mostly French vessels for ever more, undermining a core reason why millions voted Leave.

Bundles of cash to once again be paid into the EU’s coffers for participation in its various programmes and schemes.

Most unbelievably, a “youth mobility scheme” for anyone under 35 – yes, 35! – which would restore free movement by the back door, and give 80 MILLION EU citizens the chance to live and work here.

So much for getting a grip on runaway immigration.

And what has Sir Keir’s response been to all of this?

He and his Chancellor have effectively said bring it on, and that this is just the start of a much deeper future partnership with the EU.

We remind them both of two things, before they sit down to formally ink this seemingly wretched surrender deal.

First, the best economic days of the EU are long behind it — look at the state of the German and French economies.

Britain should be looking to do ambitious trade deals beyond Europe — indeed the new partnership with India, and the recent easing of US tariffs were only possible because of Brexit.

Not tying our hands and alienating allies like Donald Trump.

And, second, the British people voted nine years ago to take back control of our money, borders and laws.

If the PM hands all of this back over to Brussels today, he will not be forgiven.