Back to the 70's with Labour

To be honest, I liked the 1970’s! The music was great, we had a more simple lifestyle and I even went off to University! Like sensible young people, I paid minimum attention to politics and maximum attention to Agnetha from Abba! But politics still happened and I was vaguely aware that things weren’t great. The UK was seen as “the sick man of Europe” and the IMF bailed us out in 1976 with a massive loan. Labour was in Government then. Which brings us to today!

Today’s headlines scream: “Reeves ‘heading for IMF bailout’! Are we heading back to the past? Some non regime economists are sounding the alarm over a potential 1970s-style debt crisis. Rachel from Accounts stands accused of steering Britain toward financial ruin unless she dramatically shifts course. And she won’t.

The warning signs are stark and the blame lies squarely with Labour’s reckless economic policies. Tax and Spend never works but Labour can’t resist doing it! Economists, including the respected former Bank of England rate-setter Andrew Sentance, argue that Reeves’ tax-and-spend spree is driving the nation into a debt trap reminiscent of the 1970s. They point to her handling of high inflation and borrowing, which they warn could force the UK into an IMF lifeline. They’re right. Having said that, I think the Bank of England is also acting as her accomplice, bringing interest rate DOWN and Inflation goes up! This is insane economic behaviour.

Reeves’ disastrous autumn budget last year, with its £40 billion tax hike, deepened the crisis, risking a fall that could see the nation begging for international aid. Liam Halligan, a commentator I like to read, warns that Labour’s “economic mismanagement” threatens to unravel decades of progress. The party’s pledge to raise taxes to cover spending—potentially £40 billion more—is desperation, not strategy. This could force Britain into a humiliating IMF bailout, a scenario Halligan deems “very real.”

Starmer’s government’s refusal to adjust its course, despite warnings, is ideological stubbornness over pragmatism. With inflation rising and growth stalling, Government policy is choking businesses already strained by rising costs.

Helen Dickinson, head of the British Retail Consortium, has warned how increased taxes could stall economic recovery, with food inflation stuck at 5% and consumer confidence at a low.

Reeves’ plan to lean on VAT and income tax hikes could break the already fragile retail sector, pushing unemployment higher.

The 1970s comparison isn’t just idle chatter! Back then, IMF intervention followed a debt crisis fuelled by Labour overspending. Today, Reeves’ refusal to heed warnings mirrors that era’s mistakes.

Labour’s obsession with big government spending, risks a repeat of history. Unless Reeves pivots, the IMF’s shadow will loom large, and Labour’s economic legacy in the 2020’s will be similar to in the 1970’s. Back then, we were rescued by Margaret Thatcher. Who can rescue us now?