LAST week saw the spring statement.
Readers will remember that we used to have a budget every spring but this was changed a few years ago.
None the less, the spring statement was an unusually dour affair with the Chancellor working hard to get in the usual buzzwords.
Obviously, we had the “£20 billion black hole”, denied by every single economic commentator except the Chancellor.
We had the “catastrophe of the Liz Truss government” but I am slightly surprised Rachel Reeves still uses that as she and Keir Starmer have lower poll ratings than at the worst point of Truss’ leadership.
And Reeves got bond rates to a new high after Truss.
We had “I’ve brought down inflation” without pointing out that her policies increased supply side inflation to twice what she inherited in 2024 and it is still higher than the target level.
But it was her reference to “inflation under the Tories of 11 per cent” that gave me real concern.
Reeves claimed to have spent a decade at the Bank of England — untrue, as it turns out — but the bank did send her to the LSE to do a masters in economics.
This is important because it means Reeves should understand the reasons why we had high inflation.
It was because of the energy price shock after the invasion of Ukraine in 2022.
This was classic supply side inflation and all will remember the measures the government took to help shield people from steep rises.
This seems like a strange topic to attack on.
The current war in the Gulf is leading to a similar spike in energy prices.
And it’s a far more serious one than back in 2022.
A bigger proportion of the world’s energy comes from the Persian Gulf than from Russia and we have seen massive shipment problems of this energy — oil and gas — through the Strait of Hormuz due to the war.
Energy production has been cut by as much as 75 per cent as storage facilities fill up with oil prices close to double their January levels.
So what is Reeves up to?
Is she gaslighting us all, pretending that nothing can go wrong under her watch?
Or is she utterly incompetent, completely unaware of the impending crisis?
Conservatives got rid of Truss when she messed up.
Why is Labour sticking with this lamentable chancellor and dismal Prime Minister?
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