The New Deal

Labour keeps promising renewal but behaves like a timid caretaker government polishing the accounts while the building crumbles. The New Deal lessons are not subtle. Act boldly. Invest visibly. Strengthen people so they can strengthen the economy. Labour instead offers a cautious remix of the last decade, as if restraint were a policy rather than a holding pattern.

Roosevelt understood that you do not revive a nation by muttering about fiscal headroom. You rebuild confidence by rebuilding the country. Americans saw new roads, grids, bridges, forests and public works. That visibility mattered. Labour’s first months have delivered none of that. Taxes up. Investment down. Infrastructure stuck. Nothing on the scale that tells the public that the decline is being reversed. It is managerial drift dressed as prudence.

Then the self imposed straitjacket. Labour insists on fiscal rules that treat investment like a guilty pleasure. Day to day restraint is fine. Every household understands that. But refusing to borrow to rebuild a collapsing country is not caution. It is negligence. Britain’s grid is antiquated. Rail is creaking. Water companies are Victorian in everything except executive pay. Housing supply has collapsed. These are not problems you solve with polite incrementalism. The roof is leaking and Labour is worried about the optics of hiring a roofer.

And welfare. The New Deal grasped that a population in permanent insecurity cannot fuel growth. Confidence is an economic asset. Yet Labour toys with tightening and sanctions, as if austerity had not already hollowed out household resilience. Millions remain one unexpected bill or broken boiler from crisis. You cannot build national prosperity on that foundation. It is like trying to build a skyscraper on a swamp.

The inequality problem sits at the heart of all this. The UK is a low growth, high inequality economy where wealth is locked up in property and passive holdings because there is nowhere productive to put it. Labour whispers about aspiration then reaches instinctively for broad based tax rises that hit workers harder than wealth. It is the wrong instinct for a country in decline.

And here is the point Labour refuses to articulate. The argument that taxing wealth makes it flee is only half a thought. Wealth does not flee taxation. It flees stagnation. It flees a country with failing infrastructure, unstable planning rules, collapsing public services, weak demand, unreliable energy and no clear national direction. In that environment capital hides or leaves because there is nothing worth investing in.

But if you tax wealth fairly while creating the conditions for new investment you do the opposite. You unlock creative wealth. You turn passive holdings into productive capital. Investors swarm to countries where the grid is being upgraded and the planning system actually permits building. They go where skills are rising and where the state is a partner rather than a bystander. A modest tax on stagnant wealth to fund a national rebuilding programme is not a hostile act. It is the entry fee to a growing market. The wealthy do not avoid that. They queue for it.

The most dangerous part of Labour’s caution is political. When a government hesitates during national decline it creates a vacuum. Into that vacuum steps Reform. Farage will offer anger and spectacle where Labour offers paperwork. And if Labour hands them that opening the consequences will be grim. Reform’s programme is a recession in waiting. Unfunded tax cuts for the rich. Deregulation that strips protections. A bonfire of standards. A state shrunk to the bone. And the quiet rewarding of wealthy backers while the public pays the price. Truss was a preview. Farage is the feature length version.

History shows what happens when mainstream parties choose timidity during a national slump. The demagogues move in. Roosevelt understood that inaction invites extremism. Labour shows every sign of forgetting it. They have a historic majority and a country on its knees. This should be the moment for a national reconstruction plan that is visible, unapologetic and ambitious. Instead we have drift. Drift is not neutral. Drift is an invitation.

If Labour does not rebuild the country, Reform will tear it apart and sell off the pieces. If Labour does not harness wealth for creative investment, Farage will harness it for extraction. If Labour does not choose the New Deal path, Britain will continue its decline into a low growth backwater run for the benefit of a narrow elite.

The clock is ticking. Britain needs rebuilding, not bookkeeping.