Labour’s promise to turbocharge economic growth has already hit trouble
The prime minister and chancellor were in lockstep as they reacted to Friday morning’s GDP figures.
“Disappointing”, the PM’s spokesperson said, echoing Rachel Reeves’s words two hours earlier.
The UK economy shrunk for a second month, contracting 0.1% in October.
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‘Small businesses need the support now’
The government’s message: bear with us, it will take more than a few months to make up for years of economic stagnation; theirs is a long-term, sustainable plan rather than a short-term sugar rush.
They will need public patience to hold.
Labour’s promise to turbocharge economic growth has already hit trouble.
We don’t know how higher National Insurance contributions will weigh on business and economic activity, or whether ambitious plans to build houses will quantifiably impact growth by the next general election.
There is also the question of what the second Trump presidency, and his talk of tariffs, will mean for the UK economy.
The fastest growth in the G7 is still the official target, but it looks increasingly difficult to achieve.
What’s interesting is that Number 10 appears to be talking a little less about growth and the overall economic outlook, and more about personal finances.
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Last week, Sir Keir Starmer announced the new target of delivering higher living standards across every region of the UK.
His spokesperson said on Friday the government’s plan for change is about “the type of growth people feel in everyday lives”.
It is a subtle but important shift in language.
Whatever the wording, the government will likely be judged on whether people feel materially better off by the time of the next election. Whether negative or positive headlines about GDP figures cut through.
Six months since the election, the economy is smaller than when they came into office.
The PM and chancellor may need public patience to hold for a while yet.
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Less than a year ago in Downing Street, the bunting was out, and Keir Starmer was walking into No 10 to a chorus of cheers after winning a landslide victory.
Now there’s such a rebellion from his own MPs, he’s being forced to climb down on his welfare reforms.
PM set to make serious concessions – politics latest
For a prime minister to face such a challenge so early in his premiership, with such a big majority, is simply unprecedented.
It is a humiliating blow to his authority from a parliamentary party that has felt ignored by Downing Street.
How has this happened?
The PM’s entire focus for the past 12 days has been on international diplomacy.
He’s gone from the G7 in Canada, trying to deal with Trump, trade deals, de-escalation; then Israel-Iran, he was at Chequers trying to deal with that crisis; and then he was straight to NATO.
You could forgive him for being pretty angry that those who should have been managing the shop back home have ended up in such an enormous blow-up with MPs. A PM needs to be able to trust his team when he’s dealing with international crisis.
As I understand it, a month ago up to 140 MPs signed a private letter to the whips warning they would not accept the welfare reforms.
The whips told No 10 – and No 10 it seems stuck their fingers in their ears and didn’t pay attention to it.
But this is really draining on the PM’s authority. Ultimately, he carries the can.
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Who will take the fall for welfare chaos?
What happens next?
As I understand it, he’s now looking at serious concessions in order to get his welfare bill passed on Tuesday.
No 10 are considering whether they drop the PIP changes for existing claimants, and the health element of universal credit for existing claimants too.
Speaking to me on the Electoral Dysfunction podcast, Labour peer and ex-minister Harriet Harman said she expects concessions to be enough to appease enough of the rebels.
It will leave the chancellor needing to look somewhere else to make billions of pounds of savings.
Read more:
What are the PM’s welfare reforms?
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‘I don’t know how I will survive’
It’s a hot mess, and it was avoidable. It has left very bad blood between the parliamentary party and No 10 and No 11. There’s a lot of ire directed at Rachel Reeves at the moment too.
For a PM to be facing such an overt challenge to his authority with a working majority of 165, less than a year into his leadership, having to U-turn because he’s facing defeat?
I’ve never seen anything like it.
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