No surprise that the inflation rate is up to 3.4%, 70% above target and above the rate Labour inherited in July 2024. No surprise the unemployment rate is up to 5.1%, 23% above the rate they inherited in 2024. This site has set out consistently how their two large tax rising budgets coupled to their wasteful and excessive spending was bound both to produce inflation and to slash jobs in an increasingly overtaxed private sector. Indeed, they made sure of that by making one of the biggest tax rises an actual tax on jobs through National Insurance.
The Official opposition and this site have pointed out the large climb in the number of people on benefits and said the benefit bill is out of control, along with good ideas on how to control it. Putting many more people on benefits for life with no work requirement, and cutting job opportunities so more are unemployed is a big part of the disaster of the public finances.
The latest figures also reveal another reasons why they have run out of money and are squeezing the private sector too hard. On the latest numbers public sector pay is up 7.9% compared to private sector pay up 3.6%. The Public sector pay growth rate is 120% more than the private sector pay growth rate. No wonder the cost of public services has gone up so much, and no wonder why the government needed to tax the losing private sector more in order to reward the public sector more.
I am all in favour of better paid public sector employees, but have always stressed this needs to come from measures to raise productivity and improve the quantity and quality of service they produce. This may need better training and investment to back them, but is fundamental to having an affordable public sector that is well paid. Instead we have seen larger increases in public sector pay than private, whilst the public sector has still not overall got back up to 2019 levels of productivity, let alone achieved another 7-14% productivity gain for the missing years. Meanwhile the private sector has boosted its productivity but been unable to afford better rises. More of this delivers low or no growth, means business flees to other countries and leaves the growing public sector imposing unacceptable strains on tax demands.
January 22, 2026
The doom loop lunacy continues, virtually everything this government does is anti-growth yet they say “Growth is the number one priority of this government”. But we know that with politicians we can only judge by their actions not their words.
For growth we need cheap reliable energy, far less (employment, planning and other) hugely damaging red tape, to ditch net zero, to cut the size of the state and stop them doing negative things, to stop the wars on private schools, Non Doms, landlords, the rich, the hard working, road users, the self employed, employers… then ditch DEI, then we want free and fair unrigged markets in energy, education, transport, healthcare, banking, investment, employment, farming…
So U turns all round please (and not just a touch on the brakes) which is all we have seen do far!
January 22, 2026
My Lord,
I suppose it comes as no surprise to anyone who has lived through a Labour Government before. Labour governments always break the economy and leave everything in a worse state than when they took it over.
There are many more people on Universal Credit now and many of whom are also working. It got me thinking, although I know IDs was the architect of the UC policy but, do you think it is maybe the forerunner to a universal basic income policy? Has it been manipulated by the left to lay the foundations of the Marxist idea of a universal basic state income?
January 22, 2026
Nobel laureate Milton Friedman advocated for a form of Universal Basic Income (UBI) called the Negative Income Tax (NIT) in his 1962 book Capitalism and Freedom, aiming to replace complex welfare programs with a simple, market-friendly system that guaranteed a minimum income floor, treating poor and rich alike and enhancing individual freedom by giving people cash to spend as they choose, reducing bureaucracy and coercion.
January 22, 2026
I am in favour of decently paid public sector employees but only when they are doing positive things in efficient and positive ways. Alas this so rarely happens so much of what they do is almost entirely negative perhaps about 10% do positive things efficiently at best. Furthermore it often forces the private sector to be less efficient too wasting large sums on expensive energy, employment and compliance with other very damaging red tape, DEI lunacy and the likes.
Less in favour of them when they are mugging motorists, forcing people to employ the wrong people (for DEI reasons), fining people for pouring left over coffee down a street grain, licencing landlords, forcing people to jump through expensive and damaging planning loops, encouraging lives on benefits, enforcing mad energy, car buying, transport and home heating agendas!
January 22, 2026
Good morning.
Benefits disguised as the, Universal Basic Income ?