Rachel Reeves put UK on life support. Angela Rayner will pull the plug | Personal Finance | Finance

What has the UK economy done to deserve this deadly duo? And what will be left when they’re done?

Reeves started her tenure by robbing pensioners of their Winter Fuel Payment, and continued it by destroying thousands of jobs in her Budget.

Businesses and consumers alike have been paralysed by the fear that any success they achieve will simply be raided by her tax-hungry Treasury.

Her biggest error – and there have been many, I’ve counted them – was to slap £25billion of extra national insurance (NI) charges on the UK’s squeezed businesses.

The independent Office for Budget Responsibility warned this would destroy at least 50,000 jobs, but she went ahead anyway.

Others put the losses at around 100,000 as cash-strapped employers laid off staff, froze hiring and pulled job adverts.

Yesterday, we learned that the unemployment rate jumped to a four-year high of 4.5% in the three months to March.

Vacancies are shrinking by the month while growing numbers are looking for work, a dismal combination.

Donald Trump’s tariff nonsense has played a part, but Reeves played a bigger one.

And the NI hike doesn’t even come into force until April, when unemployment is expected to rise again.

It turns out that constantly piling new taxes on businesses and consumers doesn’t make people want to work harder, more like the reverse.

The economy is in urgent need of life support. Instead, it’s getting Angela Rayner.

As Deputy Leader of the Labour Party and Shadow Secretary of State for Levelling Up, she’s a big noise in Keir Starmer’s cabinet.

Now she’s preparing her own economic wrecking ball in the shape of sweeping new workplace reforms.

Rayner, the darling of the trade union movement, is about to reward their loyalty with a set of measures straight out of the 1970s.

Her Employment Rights Bill is expected to give unions expanded powers and reshape the balance of power in the workplace.

But far from improving the lot of workers, these changes risk grinding the private sector into a state of permanent underperformance.

If Rayner has her way, it may become as unproductive as the public sector, where productivity hasn’t increased since the pandemic.

The Civil Service headcount has rocketed from 416,000 in 2016 to 546,000 today. The wage bill, paid by taxpayers, jumped from £11.6billion to £19.7billion in that time.

Yet as professor Len Shackleton of the Institute of Economic Affairs made clear, “productivity and performance has clearly fallen in many areas”.

And they will continue to fall as Rayner gets to work.

Her bill will introduce day-one rights for unfair dismissal claims, a ban on zero-hour contracts and sector-wide pay bargaining led by unions.

All of this will tie up small firms in red tape, reduce flexibility and discourage employers from taking risks on new hires.

Especially younger and less experienced workers, who we desperately need to get onto the jobs ladder.

We’re still battling the fallout from the Covid work-from-home culture, as employers report a generation of younger staff focused on their “mental wellness” and entitlements instead of showing up and delivering results.

Rayner’s agenda will only cement this anti-work ethos into law. The workplace won’t be happier or healthier as a result, just more militant.

Encouraged by the big pay rises Reeves granted public sector workers last year, the unions will be back for another round this summer.

The economy is teetering. Growth is flatlining, business confidence is fragile and inflation remains a menace.

With Reeves draining the life out of investment and Rayner about to pull the plug on productivity, the economy’s vital signs are about to flatline.