This Week with Mike Graham: Reeves Didn’t Fix the Foundations. She Blew Them Up.
Weak growth, falling payroll jobs, rising borrowing and another 539,000 BBC licences lost.
Every week, I join Mike Graham on the The Mike Graham Show to look at the numbers behind some of the biggest political and economic stories.
This week, we discussed Rachel Reeves’ claim that Labour had “fixed the foundations” of the economy, just as the latest figures showed weak growth, falling payroll employment and continued heavy borrowing.
We also looked at what comes next for Labour, whether Britain can afford even more spending, the cost of energy and the continued decline of the BBC licence fee.
Watch the full discussion below.
Reeves’ Economic Legacy
Rachel Reeves wants her legacy to be one of stability and repaired foundations.
The numbers tell a very different story.
The latest GDP figures showed the economy growing by just 0.1% in May, following a fall in April. Production and construction both declined during the month.
A tenth of one per cent is technically growth. It is not the strong, sustained expansion Britain needs to raise living standards or repair the public finances.
During the discussion, I joked that if Reeves had fixed the foundations of Mike’s studio, the building might have started sinking before the end of the show.
The joke lands because the wider picture is so weak.
In May alone, the public sector borrowed £23.3 billion, while debt-interest costs reached £11.7 billion.
Payroll employment is also down over the past year, while vacancies have continued to fall.
Businesses are facing higher costs, more tax and expensive energy. When that happens, they become more cautious about hiring and investment.
Reeves says she fixed the foundations.
The stronger argument is that she blew them up.
More Spending, More Tax, More of the Same?
Mike and I also discussed what may come next under a new Labour leadership team.
A change of Prime Minister or Chancellor does not guarantee a change in direction.
Whoever takes over will inherit weak growth, high borrowing, rising debt costs and continuing demands for more public spending.
We also discussed calls from Labour MPs to increase foreign aid.
Britain spent more than £13 billion on overseas aid last year, while continuing to borrow heavily at home.
There may be a case for targeted humanitarian help, but politicians demanding a larger budget must explain how they intend to pay for it.
Higher taxes?
Cuts elsewhere?
Or even more borrowing?
There is no free money.
Energy is also central to the growth problem.
Lower energy costs would help households, manufacturers and businesses across the economy. Yet Labour remains more focused on targets than affordability.
Without a genuine change in policy, Britain risks getting the same formula again: more tax, more spending and more debt.
Another 539,000 BBC Licences Lost
The final part of our discussion turned to the BBC.
Another 539,000 television licences disappeared in the latest year, following a fall of around 300,000 the year before.
That reflects a wider change in how people consume news and entertainment.
Audiences now have YouTube, streaming services, podcasts, independent broadcasters and social media.
They can choose what to watch, when to watch it and which voices they trust.
The licence fee was created for a different broadcasting age.
The BBC should have to compete for viewers like everyone else.
If it produces good content, people will watch it. If audiences value it, they can choose to pay for it.
Hundreds of thousands more households are already making a different choice.
The Bottom Line
This week’s discussion came back to one central question.
Has Labour genuinely changed Britain’s economic direction, or has it simply added more tax and borrowing to an already weak model?
Rachel Reeves says she fixed the foundations.
Weak growth, fewer payroll jobs and rising debt costs suggest otherwise.
Watch the full discussion above and let me know what you think.
✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions
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Reeves was just following the party line-Net Zero......
.........growth!!!