Labour is heading for war over welfare cuts
Photo by Jordan Pettitt - WPA Pool / Getty Images
After the celebration, the hangover. Rachel Reeves' £300bn Spending Review gave Labour MPs plenty to cheer but reality soon intruded. GDP was revealed to have shrunk by 0.3 per cent in April (as Donald Trump's tariffs and higher taxes depressed growth). Israel and Iran's escalating conflict has only further darkened the global outlook. How, in this climate, will Reeves' largesse be paid for?
Higher taxes are one answer (the Treasury is already compiling potential revenue raisers ahead of this autumn's Budget); the other is more cuts. When Keir Starmer last month U-turned on winter fuel payments and indicated his intent to abolish the two-child benefit limit, some inside Labour questioned whether the government's welfare bill would ever emerge. But the answer will become clear this week with legislation due to be published on Wednesday ahead of a vote next month.
No 10 maintains that there is not just a fiscal case but a moral case for the bill. 'Winter fuel was a policy that was forced on us in a difficult situation at the start,' an aide told me. 'Welfare reform is an argument that we want to make about how to protect the most vulnerable and how to help people into work.'
Starmer himself is moved to passion on this question, telling the cabinet earlier this year that there is 'nothing progressive' about a system in which one in eight young people are not in employment, education or training, and one in ten working-age people are claiming at least one type of health or disability benefit (with spending projected to rise from £48.5bn in 2023-24 to £75.7bn in 2029-30).
But he faces the biggest revolt of his premiership to date. Forty-two Labour MPs have signed a public letter describing the £5bn cuts – which would see 370,000 current Personal Independence Payment (PIP) claimants and 430,000 future ones lose an average of £4,500 – as 'impossible to support'. More than 100 have signed a private letter to the Chief Whip ('none of us are consistent rebels,' they emphasise), warning that they too are unable to endorse the proposals. Here is why a government with a Commons majority of 165 seats has been forced to contemplate the possibility of defeat (with Downing Street also primed for ministerial resignations).
The Work and Pensions Secretary Liz Kendall – who faces the defining test of her political career – has sought to contain the rebellion by offering an 'olive branch' to critics. Those who no longer qualify for PIP would continue to receive payments for 13 weeks (rather than the standard four) and those with lifelong conditions or fewer than 12 months to live would automatically receive a higher rate of Universal Credit and be exempt from reassessments. By the end of the parliament, No 10 points out, there will still be an extra 750,000 people receiving PIP.
Yet most MPs remain unmoved. 'The hang-tough position dressed up as concessions won't wash,' one soft-left figure told me. 'MPs know how this stuff works and can't be fobbed off.' Many privately warn that only a change in the assessment criteria would persuade them to support the bill. At present individuals who need help dressing, washing and feeding themselves would no longer receive PIP.
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What lies ahead is nothing less than a battle over Labour's founding purpose. For some – as cabinet ministers often like to put it, 'the clue is in the name' – this is the party of work, not welfare. Others riposte that Labour's duty is precisely to support those unable to support themselves. Kendall's task is to convince rebels that her bill does.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[See also: Impunity is fuelling Israel's spiralling aggression]
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Telegraph
3 hours ago
- Telegraph
Rachel Reeves's plan is unravelling. She could be gone before the next Budget
It can't be easy living in the maelstrom of 11 Downing Street these days. First, Rachel Reeves had to endure almost four months of being warned what not to do with taxes, such was the brittleness of the UK economy. Then – after she chose to both increase taxes by a record amount and increase borrowing so she could afford her spending commitments – came months of warnings about the dire consequences. People are losing their jobs because of her choices, which will push up benefit claims and spending. Tax revenues will fall rather than increase by the numbers she expected. The economy has been flatlining with miniscule and highly erratic growth as it stops, starts, then stalls – seemingly on an endless repeat. Then there were the cuts to pensioners' heating allowances, the cuts to disability benefits, the death tax changes for farmers, businesses and pensions. On top of that, there were the tax rises we always knew were likely because Labour had refused to rule them out – the increases in capital gains tax and stamp duty, and the removal of incentives to entrepreneurs. It has maybe taken longer than some of us expected, but the bad news for the Chancellor – and us – now seems to be arriving like buses. I've imagined what it's like to be at the end of that constant deluge of bad numbers. 'Incoming!' The annual estimate for public sector borrowing for year ending March 2025 is £148.3bn – £17.2bn more than last year and £11bn more than the OBR forecast. Reeves carries on with her Sudoku. 'Incoming!' Oh no! The latest inflation figures for April have surged to 3.4pc, trending towards double the Bank of England's target of 2pc. Reeves stares out the window. 'Incoming!' The unemployment rate is up 0.2pc to 4.6pc – the highest since 2021. The unemployed claimant count is up 107,000 year-on-year to 1.73 million. 'Incoming!' Monthly GDP is down -0.3pc, three times worse than the -0.1pc consensus prediction. Reeves purses her lips. Looking forward, we can imagine over the months of July, August and September an unrelenting series of indicators breaking bad. 'Incoming!' The latest tax receipts are below estimates. The latest borrowing numbers are up again. Finally, the markets are beginning to react. 'Incoming!' The pound has fallen to $1.20, the lowest since 2023. Gilts are moving too. 'Incoming!' Ten-year gilt yields are over 5pc. The Bank of England reverses course and puts rates up to 4.5pc. 'Incoming!' The team from the IMF has arrived. 'Incoming!' Prime Minister! I have the Chancellor's letter of resignation. That type of scenario might seem far-fetched, but it is the trajectory the country is travelling. Unemployment is already up 10pc since Labour came to power, and sadly there's no reason to believe this trend will be reversed. Since 'modern' records began, in 1971, every Labour government has left office with unemployment higher in percentage and absolute numbers than when it took power. Reeves is continuing that tragic tradition. The spending statement from Rachel Reeves was not so much a review as a litany of unfunded spending commitments aimed not at reassuring the markets, but at reassuring Labour backbenchers. The brighter among them will not buy it. They will soon notice the important numbers getting worse every month as the full effect of the employers' National Insurance increase, the lowering of the threshold to start paying it and the increase in the minimum pay rates costs jobs and halts hiring. What does this all mean for people trying to get by: the savers, pensioners and those running their own businesses? It means that tax rises are not just inevitable in October's Budget, they will become a must-do if an embarrassing bail out is to be avoided. Labour likes to talk of having ended austerity – something that Philip Hammond, former Conservative chancellor, first claimed back in 2017. The truth of it is the UK has never had real austerity this century. The direction of travel of our public spending has always been up. When you hear of spending cuts, what you are being told about is cuts to the rate of increase in government spending, not a cut in the total amount of spending, which continues to rise year-on-year. Increasing taxes means an attack on our pensions, our savings and our properties. The tax hikes will be passed off as necessary to save the NHS when the NHS really requires an overhaul that boosts its productivity. The much hyped increases for the NHS of £29bn each year over the next three years is most likely to be eaten up by rising pay awards. The NHS is one of the world's largest employers, with around 1.3 million full-time equivalent staff in England (as of February 2024). Consequently, the wage bill for the NHS makes up a substantial proportion of its budget. Nurses are already being balloted about strike action over an 3.6pc inflation-busting pay offer – junior doctors are also wanting more again. In 2022-23, the total cost of employing the staff in the NHS was £71bn – 45.6pc of the NHS budget. These statistics don't include salaries for GPs (who are not directly employed by the NHS), nor employees in the Department of Health and Social Care and other national bodies, such as NHS England. GPs and GP practice staff are indirectly funded by the NHS through a complex system of contracts. The Resolution Foundation think tank estimates that, by the end of the decade, half of all public spending will be going to the NHS – and continuing to rise. So optimistic has Reeves been about 'fixing the foundations' and 'delivering growth' while 'making the right choices', that there will be no way back for the Chancellor when the next crisis begins. The next time someone shouts 'incoming!' in the Treasury, everyone had better duck under their desks. It will be to announce a new Chancellor.
The Guardian
3 hours ago
- The Guardian
Investing apps: which offer the most for beginners?
Rachel Reeves and her government colleagues are keen to get more Britons investing in the stock market. She said recently that a lot of money was being put into cash savings accounts 'when it could be invested in equities, in stock markets, and earn a better return'. The good news is that the rise of DIY tools and mobile apps means it is now easier than ever to get investing. However, the vast array of options can make it daunting to know where to start. For new investors who don't have the time or confidence to manage a portfolio, 'robo-advisers' can be a good option. They might sound like something out of a sci-fi movie but are basically online investment platforms that use technology to help automate the process. Most are app-based and typically offer a range of ready-made investment portfolios tailored to your individual preferences. You usually fill in a short questionnaire to determine your goals, how long you want to invest for, and how much risk you want to take. Typically, the longer you are investing for, the more risk you can afford to take. But you need to factor in your personal attitude to risk, too. Stocks and shares have historically delivered better returns than savings accounts, but there is also a chance you could lose money – and there will be ups and downs along the way – so you need to feel comfortable about this before taking the leap. The ready-made portfolios typically invest in a selection of exchange traded funds (ETFs). These are low-cost funds that track a chosen index such as a UK or US stock market, government bonds (such as UK gilts or US Treasury bills) or the price of a commodity such as gold. The apps put a selection of these funds together to create a balanced portfolio which spreads your money across different assets. So which of the apps – if any – is right for you? We looked at some of the most popular ones to see how they stack up. Who? One of the first robo-advisers to hit the market, Nutmeg launched in 2012, and in 2021 it was bought by the investment company JPMorgan Chase. It has more than 200,000 users in the UK, with more than £4.5bn invested through the app. Minimum investment: £500 for Isas and pensions, £100 for lifetime Isas and junior Isas. Investment choice: Nutmeg has different tiers of service, which will affect costs. With its fully managed option, you choose a risk level from one to 10, and a team monitors the portfolio and makes regular adjustments. With the fixed allocation option, there are five risk levels and the portfolio is set by the investment team once a year. Fees: Nutmeg says the total charge for the fully managed option is 0.98%. Someone investing £3,000 would pay about £29.40 a year. For fixed allocation, it is 0.65% – about £19.60 a year for that example. We like: Nutmeg is transparent about performance, and you can see how its fully managed portfolios have done over the past decade. For example, the 6/10 risk portfolio has returned 43.4% over 10 years, compared with 36.7% on average for comparable funds. The 5/10 portfolio is up 31.9% over that time, compared with 36.7% for its peers. Anything else? For those who want more support, Nutmeg offers free guidance to help with general questions, and full financial advice starting from £900. Who? Launched in 2016, Moneybox specialises in savings and investments and is reported to now have more than 1.5 million customers and in excess of £10bn of assets under management. Minimum investment: You can open an account with as little as £1. Investment choice: There are just three core options: cautious, balanced and adventurous. The cautious option has just 15% in company shares, with 40% in bonds and 40% in cash, which makes it less risky but means your returns may not be as impressive as with other options. The adventurous option has 80% in shares, 15% in property and 5% in bonds. Fees: A £1-a-month subscription fee covers trading costs. Then there's a 0.45% platform fee, plus the cost of your actual investments – 0.17% for the core funds. Moneybox says someone with £3,000 invested in its balanced fund would pay total charges of 0.85% – about £25.60 a year. We like: The round-ups feature. Link your bank account or credit card to the app, and it will round your spending to the nearest pound and automatically invest the difference. For example, if you spent £1.87, it would be rounded to £2, with 13p invested – a handy way to boost your contributions. Anything else? Those who feel more confident can pick their own ETFs to invest in rather than the ready-made portfolios. Or, if you want to cherrypick specific companies, there is a limited range of stocks to select – though currently only US stocks are available. Who? Dodl is the newest of this cohort, launched only in 2022, but it is owned by the wealth management giant AJ Bell, which has been around since 1995. Dodl offers a simpler process and lower minimum investment level than its parent company, and a more limited choice of investments. Minimum investment: £100, or set up a direct debit from £25 a month. Fees: 0.15% a year, with a minimum of £1 a month, plus the cost of your investments – 0.31% for the core range. Someone with £3,000 invested would pay about £19.30 a year. Investment choice: The range of ready-made funds, run by AJ Bell, are labelled by risk level – from cautious to global growth. You can also choose individual shares, with the ability to browse by region (either the UK or US) and sector (such as finance, health or technology). We like: The option to invest by theme, which directs you to a relevant ETF for your trend of choice. For example, the 'On top of the world' theme invests in the HSBC FTSE All-World, an index of some of the biggest companies around the globe, which charges 0.13%. Other options include 'the home team' for UK-focused investments, and 'robo revolution' for a fund investing in robotics companies. Anything else? It pays a competitive 4.25% (variable) on cash you have not yet invested. Who? Founded in 2014, Wealthify is now owned by the insurance giant Aviva and has about 100,000 customers. It has a big focus on keeping things simple and jargon-free. Minimum investment: Currently £1 for Isas and £50 for pensions, though from Wednesday 25 June the minimums will be £1 for junior Isas, and £500 for stocks and shares Isas and pensions. Investment choice: There are five risk levels: cautious, tentative, confident, ambitious and adventurous. The cautious portfolio has 85% of its assets in government bonds and just 5% in company shares. The adventurous option has 74% in shares and 14% in government bonds, and also invests in property and infrastructure. Fees: The platform fee is 0.6%, which includes the cost of managing your portfolio. The cost of your investment on top is 0.16% for a general portfolio, and 0.7% for the ethical option. That adds up to £22.80 a year, or £39 for the ethical option, for someone with £3,000 invested. There is no minimum fee. We like: Its outlook page, which offers a short overview of the prospects for different investment regions and assets. It's a handy way for investors to learn a bit more without hours of research. Anything else? Wealthify boasts of various customer service awards on its website – a good reminder to consider factors aside from fees and the investment range. Always be sure to do your own research and read independent reviews before choosing a provider. Who? Moneyfarm originated in Italy and launched in the UK in 2016. It now has about 160,000 active users and more than £5bn in assets under management. The firm has backing from big investment groups such as M&G and Allianz. Minimum investment: £500. Investment choice: There are seven risk levels for its managed funds, which are regularly rebalanced by the investment team. For example, the 6/7 risk option has 72% of its assets in developed market companies and 10% in emerging markets companies, while the 2/7 risk option invests predominantly in bonds. Fees: Someone with £3,000 in the actively managed option would pay management fees of 0.75%, plus 0.3% for their investments – equivalent to about £31.56 a year. For the fixed allocation options, which are adjusted just once a year, the management fee is 0.45% plus 0.17% for the investments – a total of 0.62%, or about £18.60 a year for that example. We like: It is easy to see a breakdown of each portfolio on the website to understand how it is invested. You can see how it invests by asset type, region and sector – and there's a simple explanation of each, too. Anything else? As with most of these apps, there is an option to apply environmental, social and governance (ESG) criteria to your investments, which is good for any investor worried about where their money is going. This will screen out certain investments – for example, heavy polluters or companies with a poor human rights record. Selecting this option typically increases the costs. Before choosing a robo-advice app or service, make sure the company is regulated by UK watchdog the Financial Conduct Authority (FCA). It should also be a member of the Financial Services Compensation Scheme (FSCS), the UK's official consumer 'lifeboat' scheme which protects up to £85,000 of your money if your provider collapses. Most apps offer a variety of accounts, but a stocks and shares Isa is usually the best choice. You can put up to £20,000 a year into an Isa, and any interest or growth is sheltered from HMRC, meaning you get to keep all of your gains. When it comes to fees, you are usually charged a percentage of the amount you invest – for example, if you invested £1,000 and the fee was 1%, you would pay £10 a year. However, sometimes there is a minimum charge, so check carefully what you would pay.
The Guardian
3 hours ago
- The Guardian
‘They feel betrayed': how Reform UK is targeting votes in Britain's manufacturing heartlands
When Nigel Farage called for the nationalisation of British Steel on a visit to the Scunthorpe steelworks this spring, it was a marked change in direction for a man who had spent almost all of his political career campaigning for a smaller, Thatcherite state. Two years earlier, he had questioned why British taxpayers' money should be thrown into keeping the fires of the very same blast furnaces burning. Back in 2018 he told an interviewer: 'I supported Margaret Thatcher's modernisation and reforms of the economy. It was painful for some people, but it had to happen.' After gaining a fifth MP and sweeping to a string of victories in England's local elections last month, his Reform UK is coming for Labour in places Keir Starmer's party once considered its traditional heartlands: the former mill towns, pit villages and workshops of northern England and the Midlands, the steel towns of south Wales and the shipyards of Scotland. Farage's success in what journalists and politicians know as the 'red wall' – ripped from Labour control by Boris Johnson in 2019 – is no coincidence. The targeted campaign plotted from Reform's Millbank Tower headquarters overlooking the River Thames has the general election in 2029 squarely in mind. Rightwing populists around the world are increasingly campaigning on the consequences of deindustrialisation: from Donald Trump's efforts to champion the US rust belt to Alternative für Deutschland (AfD) targeting east German auto workers. Railing against net zero, sky-high energy prices and threats to sovereignty – after supply chain disruption in the Covid crisis, and a fracturing geopolitical landscape – are central to the playbook. There is, however, an irony of a privately educated former commodities trader and career politician offering hope for Britain's deindustrialised communities, where successive governments have promised – and largely failed – to turn around decades of living standards stagnation. In the first on a series on the battle for Britain's deindustrialised areas, the Guardian maps out the rise in support for Reform, and speaks to its campaigners, Labour, the Conservatives, union leaders and economists to document the high-stakes fight. From the vantage point of the 34th floor of the Shard, Zia Yusuf explained how Reform would unshackle the City of London by cutting wealth taxes and deregulating bitcoin. But the party's then chair had his sights elsewhere at the same time. The former Goldman Sachs banker and millionaire startup founder said there was good reason why working-class voters were turning to Reform. 'If you go and speak to people who live in these communities, they just feel completely betrayed,' he said. 'I spent a lot of time in Runcorn. A lot of this is driven basically by a political class that's never really thought about the experience of people living in these areas. And Nigel speaks to those people. '[As with] one of the things Trump is trying to do – whatever your views on the approach he is taking – I think we've got to manufacture more things here. We've got to have energy security. We can't be in a crazy situation where we're unable to produce primary steel.' The message of reindustrialisation is viewed as a unifying theme for Reform's policies. In the pivot to the economic left, Farage's road trip has taken him to Runcorn and Newton Aycliffe, County Durham – where Reform triumphed in elections last month – and the steel towns of Scunthorpe and Port Talbot. In Port Talbot, the south Wales town that recently lost its blast furnaces, he demanded their reopening – along with the valleys' coalmines. However, Labour is fighting back. Rachel Reeves placed investment and regional economic 'renewal' at the heart of her spending review last week, namechecking places that would be sprayed with cash. The government's long-awaited industrial strategy, due on Monday, is designed to bolster manufacturing, and there are hopes that it will tackle sky-high energy prices for industry. Such is the threat in Labour's old heartlands that Starmer used a hastily arranged visit to a St Helens glass factory last month to decry Reform for its 'fantasy economics', comparing Farage to Liz Truss. Will Jennings, the professor of political science and public policy at the University of Southampton, said: 'The fact they are focusing their campaigns there are because the sorts of voters drawn to their messages are there. 'The structure of support for Reform, much like for the Brexit party and Ukip before it, very much tends to be in particular areas, described often, sometimes unhelpfully, as 'left-behind towns'. They tend to be older, have former manufacturing industries, tend to be distant from Westminster, and tend to have suffered economic loss.' Reform came second to Labour in 89 constituencies at the 2024 general election, running Starmer's party closest in the 103-year-old south Wales Labour stronghold of Llanelli, a steel town once famous for manufacturing tinplate. Most of the constituencies are in the north and Midlands. It is these seats where the 2029 battle will be most fierce. Analysis by the Guardian shows these target seats have a higher share of manufacturing jobs than the country at large, demonstrating that, despite decades of industrial decline, they remain more dependent than most on steel, car manufacturing and chemicals. Overall they account for a fifth of Britain's industrial base. Including towns such as Redcar, Wigan and Rotherham, the average share of manufacturing employment is 12.3%, compared with 8.8% for the UK as a whole. The seat of Washington and Gateshead South, home to the vast Nissan factory near Sunderland, has the highest share, at 35.3%. Separate research by the Trades Union Congress shows Labour seats with the most manufacturing jobs are more likely to have Reform as the second party (34% of seats), compared with the average across all Labour constituencies (22%). Recent predictions from MRP models show Reform would win at least 180 seats if an election was held tomorrow, including nearly all of the places where it placed second to Labour in 2024. Most of the seats cover towns that have been hit hard economically by manufacturing decline. When Margaret Thatcher came to power in 1979, Britain's industrial base was already dwindling from its peak in the early 20th century, yet still contributed about 30% to GDP. Many areas were also still dominated by industry – including Hartlepool, Burnley and Stoke-on-Trent, where more than half of all jobs were in manufacturing. The deindustrialisation of the 1980s was, however, brutally fast as the UK transitioned to a more services-oriented economy, reliant on imported goods. Today manufacturing accounts for about a tenth of annual output. But Reform is not only targeting nostalgia for a bygone age when Britain made things. When the factories closed, the jobs they offered were either not replaced or were supplanted by lower-paid, insecure work. Whole towns have suffered economically as a result, falling behind the rest of the country despite the promises of successive governments to turn things around. Austerity made matters worse. Last month, research by academics at the University of Staffordshire showed cuts since 1984 have disproportionately affected coalfield and deindustrialised areas, including reductions in welfare and benefit worth £32.6bn between 2010 and 2021. Andy Haldane, the former Bank of England chief economist, said: 'Whichever lens you look at – economic, social, environmental – those places have been lost, and in that sense they have been left behind. And if not overlooked, then underinvested in, systematically, over at least a generation. If not two. 'The longer that has gone on and has turned into generational stasis, or a lack of social mobility, the greater people in those places have willingness to seek redemption elsewhere. Brexit was that, almost a decade ago. And Reform might be it now.' Haldane, the architect of levelling up, and a key figure in the last government's industrial strategy, said Farage had effectively become a 'tribune for the working classes'. The Guardian's analysis shows Reform's target seats would have an average ranking on the English index of multiple deprivation of 92, out of 543 places in total, with 1 being the most deprived. The index brings together a wide range of data sources to build a picture of deprivation, including income, work, education, health and crime rates. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Average wages are £65 a week lower than the UK average. Unemployment, economic inactivity and the rate of jobless benefit claims are higher. To track the rise of Reform, Labour researchers have been using data from parliamentary petitions as a straw poll to see if the party is growing in their local area. Analysts are poring over data from the 'Call a General Election' online poll, launched within months of the last one, and signed by 3 million people. Signatories have to enter a postcode, enabling support to be plotted geographically. Hotspots included Essex and Lincolnshire – Reform strongholds. 'We're looking at how active they are, where we can assign a high probability that it [a petition] is being driven by Reform or their organised groups via WhatsApp,' said one adviser to a Labour MP. Almost all the Reform target seats backed Brexit, including 15 Labour won from the Tories in 2024. Most had only been Tory since 2019, when many decades-old Labour seats backed Boris Johnson's 'levelling up' and 'get Brexit done' messages. On average, leave voters tend to be more socially conservative and anti-immigration. Many 'red wall' MPs are pushing Starmer to adopt a tougher stance on immigration as a result, including the Blue Labour caucus founded by Maurice Glasman. Reform has pushed hard on the issue, in a high-stakes campaign after last summer's riots across the UK – including in many post-industrial towns. Experts said economic conditions alone did not explain anti-migrant views or justify rioting, but that austerity and stalling living standards fuelled grievances and mistrust of institutions. Luke Telford, a criminal and social policy academic at the University of York and author on Brexit and deindustrialisation, said: 'The key narratives we heard in the months after [the riots] was it is all about the far right and social media. 'Undoubtedly that's an important contributor to the outbursts of inarticulate rage we saw. But that rage doesn't occur in a vacuum, it is bound to certain social, cultural and economic conditions that combined. 'It's certain that the areas among the most deprived, were among those with high levels of rioting. It's impossible to ignore that kind of correlation.' However, fetishising industrial jobs and prioritising the restoration of British manufacturing might not be the best route to an economic renaissance. Not least because England's regions are more economically and culturally diverse places than some in Westminster give them credit for. Many economists say the idea is riddled with misunderstanding about modern Britain, where its strengths mainly lie in high-value services, rather than on low-paid production that is at risk of being automated away. Most Britons think manufacturing is important for the economy. Most parents do not want their children to pursue a career in the sector. 'I don't think you have to replace manufacturing job with manufacturing job in a Trump-like fashion to resist the rise of populism,' said Haldane. 'But you do need to replace them with something that is at least as good, in terms of quality of work, pay, security and a degree of pride around it. And you do need to invest in the supporting infrastructure. Whether that's transport, housing, or social infrastructure – like youth clubs and parks.' Reindustrialisation runs like a seam of coal through the rhetoric of rightwing populists worldwide – seen most prominently in Trump's Make America Great Again campaign to 'bring back' factory jobs to rust belt states. Much of the intellectual driving force behind reviving industry emanates from the US. The economist Oren Cass and his American Compass conservative thinktank, with close ties to JD Vance in particular, has promoted a 'new right' strategy prioritising a pro-worker, pro-trade union, pro-industry agenda that is scathing of corporate America. Cass was among speakers – including Farage and Kemi Badenoch – at a London conference held by the Alliance for Responsible Citizenship (Arc) this year, sharing a stage with Michael Gove, the Spectator editor and former Tory cabinet minister. Founded by the Canadian psychologist and self-help author Jordan Peterson and the Tory peer Philippa Stroud, Arc's financial backers include the British hedge fund manager Paul Marshall and the Dubai-based investment firm Legatum – who also co-own GB News, where Farage has a prime-time show. Another figure is Matthew Goodwin, also a GB News commentator and regular speaker at Reform rallies. An ex-academic, he studied what he calls the 'realignment' of British politics, whereby the left has shifted to supporting liberal, metropolitan values, allowing the right to hoover up more socially conservative, working-class voters. Farage and Trump share common ground in promising to roll back net zero – ostensibly to boost manufacturing jobs in heavier polluting sectors, including oil and gas, coal, steel and chemicals. And both are courting trade union members and their worries over foreign competition, the impact of decarbonisation and high energy costs on heavy industry. Gary Smith, the general secretary of the GMB union, which includes offshore workers in Scotland among its members, has called for an 'honest debate' about Labour's plans for industry. He told the Guardian that net zero advocates on the left risked fuelling support for Reform by leaving workers out of the debate. 'Climate fundamentalism and rightwing populism are two cheeks of the same backside,' he said. 'We need to have a programme about jobs and apprenticeships to bring back hope. Neoliberalism is dead and globalisation as we knew it is over. Working-class people aren't voting for cheap TVs and training shoes. They want their jobs back.' At an event in Westminster late last year to lobby Labour MPs on high manufacturing energy costs, GMB's shop stewards were approached uninvited by the Reform deputy leader, Richard Tice, trying to curry their favour. But while Reform can count on support from some union members, the labour movement's leaders are furious at its overtures. 'We wouldn't talk to those fuckers. Load of posh boys hanging tough for the working class? They can go fuck themselves,' said one union boss. Paul Nowak, the general secretary of the TUC, said: 'The hypocrisy is stunning. This is a guy [Farage] who was hanging on the coat-tails of Donald Trump. He turns up at Scunthorpe saying he wants to save British Steel at the same time as his mate in the White House is slapping tariffs on steel and could cost jobs across Britain's manufacturing base. 'In industrial communities there is a lot of cynicism about politics and whether it can make a difference. But it can make a tangible difference to peoples lives who is in Downing Street.' For Labour, the challenge from Farage showed the importance of an 'ambitious' industrial strategy, he said. It could be central to its hopes of winning a second term.
