Hope for the best…
As one ages it is hard not to think that the two hands of the clock whirl quicker and quicker. And so, with the arrival of September, meteorological autumn, British business braces itself for the next iteration of Labour’s economic policy. On the one hand, it seems that 2025 is passing in a flash, on the other, the British Government’s economic policy feels like a very prolonged car crash.
With September upon us, the 2025 October Budget is, therefore, less than two months away, what could possibly go wrong???. Thankfully, there has been no re-run of the total chaos of 2024, when Ms., Reeves, Chancellor of the Exchequer, managed to talk down a quite well humming UK economy to incredibly dramatic and damaging effect, momentum that in truth has not to date been regained.
Externalities have not assisted the Chancellor, most notably Donald Trump’s somewhat distinctive tariff experiment, which will single handedly peg the UK economy back a bit, and to be fair such things are not of the British Chancellor’s doing. However, to blame externalities for the deterioration of the UK economy under Labour would be incorrect, responsibility does rest with the ineffective expedition of original plans, particularly around very modest welfare reform, which has meant that many domestic and international investors, the folks that fund the UK Government by purchasing gilts, are feeling that the Prime Minister is not in control of his own dressing room.
As such, with anaemic economic growth and an inability to control expenditure, the 2024 Labour Government’s growth mantras are a euphemism. Indeed, in cornering itself into a tax position by refusing to consider rises to income tax, national insurance contributions and value added tax, plus, crazily, persisting with the triple lock, the Chancellor is raising and spending funds inefficiently; it should be said that public sector waste and deteriorating productivity go well beyond the daft and unsustainable triple lock.
And so, whilst no re-run of 2024, the broad narrative through summer 2025 and now into the autumn, ahead of the Budget, is which taxes will rise and by how much. Such discourse is not helpful to making the UK a country within domestic or international circles that one will wish to invest, far from it. Accordingly, in terms of any future tax rises, it is hard not to be suspicious that the Treasury is throwing fiscal balls into the air and assessing which one’s land more in a more damaging than others as a journey to the last October announcement.
Tax rises sit within a construct of Office for Budget Responsibility (OBR) forecasts that set the scene for how much Ms., Reeves will miss her so called fiscal rules, lines that the gilt market are watching. Indeed, that gilt market has a quite dim view of the management of the UK economy under Labour to date, with yields, the effective price that investors will lend to the Debt Management Office (DMO), sitting at absolute and relative, to international partners, levels – servicing the national debt now account for about one in eight pounds raised in taxation.
All this is a million miles away from the, frankly bull shit, the Labour Government spoke as an opposition ahead of the July 2024 suicide Election of Sunak with respect to growth, industrial strategies and investing in the UK’s competitiveness. Indeed, in terms of beneficial supply-side reform there has been very little achieved – encouragement for Heathrow T6 is about – as the Labour Government approaches one-third of its tenure. The much-heralded industrial strategies are just noise, which do not even embrace the largest industrial system in the UK, which is food – the energy strategy is chaotic as ideology overcomes common sense, and that is not to denigrate net zero but to understand economic reality; the UK is destroying its own hydrocarbon sector to import fossil fuel energy from elsewhere, which does not sound like a sustainable policy of any sorts to me.
One of the biggest policy ideas espoused by Labour was planning reform, which is just about universally agreed upon. Alas, it has expended considerable energy and Parliamentary time on its ill-thought-through winter fuel idea, whilst immigration has just bamboozled it, the Prime Minister clearly happier being an international statesman, with some aplomb to be fair, over the interests and needs of his electorate. Alas, now well into the second year of his tenure, planning reform remains on the to do list and, in reality, hope that it will free a heinous system in the UK, especially for the farming and food sectors, is low,
To be clear, this criticism of the Labour Government is not party political, as opposed to a rather fatalistic emotion, as it did inherit a car crash from a wholly incapable, chaotic and incompetent Tory regime, whilst the Greens appear to redefine the loony Left, the Liberal Democrats are experts in shallow virtue signalling (e.g., Ed Davey of Post Office fame not attending dinner with Donald Trump), and Reform appears a rather ragged right plus band with a remarkable capability to self-destruct (it has four MPs after reaching six); Reform’s welfare busting budget ideas are also truly worrying.
Quite what Rachel Reeves and her team of rather isolated from economic reality ladies and gentlemen come up with in the Budget 2025 remains to be seen, but it has been shown by a cooling UK employment market that her 2024 edition has absolutely hit several hundred thousand working people who have lost their jobs. More to the point, business feels raided by an asymmetric relationship of heads you win, tails I lose; all of which works firmly against confidence and so the application of investment so desperately needed to raise the economic growth bar. Unfortunately, Rach and her pals of public sector philes just do not get it.
hilst never being a fan of talking the UK down, it is a real worry that the 2025 Budget will further depress business confidence by making it less rewarding to invest and hold wealth in the UK, not to say that some elements of the economy do need difficult wider reform from residential rates to social care, and so with a Government that cannot control its expenditure, make for a further deterioration in the nation’s finances that may mean the 2026 Budget is the one that buries Labour’s re-election hopes through necessary increases in the three main taxes.
It would be good to be wholly incorrect on this front but to do so, the UK economy needs tailwinds that are hard to foresee post-summer 2025, many more people in this country to balance entitlement and responsibility, and for an economically literate Government to actually live up to its prior rhetoric and act in a manner that is welcoming and support of entrepreneurs, innovators, and business. In that respect, one hopes for the best, but business may be wise to plan for even more straitened times ahead.
In the food system, this is where Coriolis does add value around operating optimisation, which as AI and labour laws evolve, is a proper external benefit to me. Do give Mark Dudley and his team a call to explore how to be cost effective in a costly Britain.
Dr Clive Black
Senior Advisor to Coriolis Consulting Limited.
September 2025.
