Thursday, November 28, 2024

Britain faces economic isolation as Trumpism takes over from Bidenomics

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At the same time Labour has had to water down its promise that GB Energy would slash £300 off energy bills, as it is increasingly clear that piecemeal contributions into different green energy projects do not amount to an outcome which slashes costs.

How will this all compare to the United States, where subsidies are set to be cut, state spending substantially curbed and businesses given free rein to flourish?

There is, of course, no guarantee Trump will deliver this. If anything, Trump has done Labour a favour so far, by distracting the markets from the UK Budget – which caused borrowing costs to rise after it was announced.

It also serves as a temporary point of blame for instability. If there are outstanding questions about the cost of potential tariffs – or higher defence spending – don’t blame Labour, the narrative will go. Blame Trump.

But this kind of cover won’t last long. If Trump resists his worst instincts and does indeed make good on his promises to get the public finances in order, Labour is going to have an increasingly difficult time explaining its own decisions to ramp up borrowing and expand the influence of the state into the private sector.

It’s possible that the Government has already clocked this. Reeves’s first Mansion House speech not only noted that she was looking forward to “working closely” with Donald Trump.

It was also an ode to “growth, competitiveness and investment”, with emphasis on regulation post-financial crash going “too far”. A strangling of business, she suggested, “we must now address”.

Very laissez-faire. Perhaps Labour doesn’t intend to go it alone after all.

Kate Andrews is Economics Editor at The Spectator

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