Mel Stride: Make no mistake, Labour is driving us over an economic cliff entirely of their making

Sir Mel Stride is Shadow Chancellor of the Exchequer and a former businessman.

When Rachel Reeves stood at the Despatch box last October to deliver her maiden Budget, she told the Commons:

“Economic growth will be our mission for the duration of this parliament.”

What we got instead was a £25billion hammer blow to Britain’s job creators.

And nowhere is the damage more visible than in our world-leading hospitality sector – the pubs, restaurants, and cafes that sit at the heart of every high street and community across the country.

Since Labour’s Budget, almost 90,000 jobs have been lost in hospitality – a staggering 45 per cent of all UK job losses over the same period. That’s more than 8,000 livelihoods vanishing every month. It’s not a coincidence. It’s a direct result of Labour’s economically illiterate decision to increase employer National Insurance contributions – a tax raid on jobs that this Labour government still insists on defending.

The Chancellor’s ‘Jobs Tax’ is the worst kind of economic vandalism. It’s regressive, it’s counterproductive, and it’s devastating for the very workers Labour claims to champion – especially young people and part-time workers. These are precisely the groups being priced out of employment by Labour’s reckless tax rise.

Kate Nicholls, Chair of UKHospitality, put it best:

“These devastating job losses are a direct consequence of policy decisions at last year’s Budget, which have disproportionately hit the hospitality sector.”

Kate’s absolutely right.

The employer NICs hike is pushing small businesses to the brink and forcing large employers to cut staff and scale back expansion. Small business hiring is collapsing. Official data shows job vacancies at small firms have fallen by nearly a fifth since the Budget – with medium and large employers also pulling back.

And what does this mean for ordinary people? Fewer jobs. Higher prices. Less opportunity. More boarded-up shops on our high streets.

Almost four in five hospitality businesses have increased their prices since the tax rise took effect in April. More than half have already laid off staff. Many now face a stark choice: raise prices again, cut more jobs, or close altogether.

And that’s even before Labour comes back for more in the autumn to paper over the cracks from their economic mismanagement – having created a multi-billion-pound black hole.

This is what happens when you govern from spreadsheets instead of the real world. No one on Labour’s front bench has any real-world business start-up experience, so is it any surprise they don’t understand business. Like many of my Conservative colleagues, I started a business from scratch. In my case, I did it both in the UK and in the US. I know the difficulties. The sleepless nights. Rachel Reeves and her colleagues don’t – and it perhaps explains why she’s recklessly decided to make it much harder for businesses.

The truth is, Rachel Reeves’s economic strategy is crumbling under its own contradictions. She campaigned on “stability, investment, growth” – but her record has delivered the exact opposite.

Growth forecasts are being downgraded. Business confidence is falling. Inflation has doubled. Interest rates remain high. Public debt is ballooning. And now even Keir Starmer is turning against her – with the Prime Minister reportedly sidelining his Chancellor as economic performance slides still further.

The warning lights are flashing red – and yet Labour continues to drive blindfolded toward even more tax rises this autumn. We hear whispers of further tax raids – demonstrating that nothing is safe. Not your home, your pension or your savings. You own it, Labour wants to tax it.

Before the election Labour said they wouldn’t raise National Insurance. They broke that promise. They said after the Budget they wouldn’t come back for more. Who seriously believes they won’t break that promise too?

Let me be clear: this government’s approach is failing. And the cost is being paid by our hospitality workers, small businesses, high streets, and consumers.

At a time when the UK faces one of the most significant economic challenges in a generation, Keir Starmer is distracted by a political crisis entirely of his own making. Instead of focusing on soaring taxes, rising debt, and an unsustainable welfare budget, the Prime Minister is consumed by scandal and infighting within his own party – and that’s even before Labour’s Deputy Leadership election gets going.

Labour MPs are now openly discussing whether Starmer should go altogether. It’s an extraordinary indictment of a Prime Minister who’s barely a year into his term – and it raises serious questions about how Labour can credibly run the country when they can’t even run their own party.

This instability matters because while Starmer squabbles with his own side, the economic situation worsens. Public finances are deteriorating rapidly, with sickness and disability welfare spending set to soar past £100 billion by the end of the decade. The burden on the taxpayer is becoming unsustainable, yet Labour has no plan to deal with it. Their botched welfare reforms prove just how beholden they are to the hard-left factions of their own party. When faced with a rebellion from their backbenches, Starmer and Reeves folded – and the £5 billion in projected savings vanished almost overnight.

The consequences are clear. While mutinous MPs dictate policy, working people are left footing the bill. That’s why the Conservative offer on welfare reform is more vital than ever. Kemi Badenoch has offered to meet with Starmer, Rachel Reeves, and the new Welfare Secretary to find a responsible way forward – because the country cannot afford more Labour chaos. The Prime Minister can either work with us in the national interest or continue down a path of division, weakness, and economic decline.

The Conservatives know what it takes to grow the economy.

We know that jobs are created by entrepreneurs, not by officials in Whitehall. We know that if you tax work, you get less of it. And we know that a thriving hospitality sector is essential to the life of every town, city and village in Britain.

We will always back the businesses that create jobs. We will always stand with those who work hard and aspire to get ahead. And we will always fight to make Britain a place where enterprise is rewarded, not punished.

Labour promised growth – saying they were “the party of business”. What they’ve delivered during their first year in power is a jobs crisis – and the extinction of hope for many.