Letter from the North

16 December 2025

First of all, a disclaimer:

Nothing I say in the following piece is to be interpreted, or imply, that I in any way support acts of violence, race hatred, discrimination or exhortation to use anything other than a peaceful expression of one’s views.

There follows a boring, dry-as-dust summary of the UK’s economic position as at November 2025.

Headlines are that UK unemployment is now 5.1 per cent and rising, youth unemployment is 16 per cent and expected to rise as the decline in the hospitality and construction sectors continues. These are traditionally the sources of first entry jobs for young job seekers.

Inflation is now 3.1 per cent down from 3.6 per cent, due to commodity prices falling globally and some drop in domestic prices (suppliers dropping prices to boost sales?) The bottom line is that the INCREASE in prices has slowed.

Meanwhile, at the Bank of England, rate-setters voted by a narrow five to four majority to cut rates from four per cent to 3.75 per cent – the sixth cut since the summer of last year – but flagged that further reductions would be a ‘closer call’.

It is the lowest level for bank rate since early 2023.

GDP shrank by 0.1 per cent whilst we in a Labour-led growth phase. This is now the fourth consecutive period of stagnation. And it’s close to being an official recession.

The UK’s economy contracted unexpectedly in October, as the autumn budget cast a shadow of uncertainty ahead of Rachel Reeves’ statement on 26 November.

Office for National Statistics (ONS) data showed UK GDP slipping 0.1 per cent month on month, confounding city forecasts of a 0.1 per cent expansion. The decline followed a 0.1 per cent fall in September and flat output in August, evidence of what economists describe as a protracted period of stagnation.

Source: Yahoo Finance 12 December 2025.

UK public sector borrowing was around £150 billion for the financial year ending March 2025, the third highest on record and equivalent to about 5.1 per cent of GDP, with figures showing borrowing remaining high but with forecasts for a decrease in the coming years. The national debt is over £2.8 trillion, approaching 94–95 per cent of GDP, though interest costs are rising. Monthly figures fluctuate, but the trend shows elevated borrowing compared to pre-pandemic levels, driven by increased spending on services, benefits and debt interest. 

Whilst the statistics were down on the previous year, they still represented a hefty level of borrowing and indicates quite how much spending this Labour Government is doing in the first few years.

Come October, ONS data revealed that public sector borrowing had climbed by £17.4bn in November in a significant pre-budget setback. City analysts had anticipated government borrowing would settle at £15.2bn for the month.

These numbers meant aggregate borrowing in the current financial year had breached £100bn, reaching £116.8bn – almost £10bn above the projection made by the Office for Budget Responsibility (OBR). 

This will be alleviated by more stealth tax takes. The increase in the minimum wage is, of course, paid for by the employer. This means that income tax and NI (national insurance) paid by the employee will increase, and employers’ NI will increase. It will also reduce universal credits payable, thus reducing benefits, but may neutralise the net benefit of the employees take home pay. And Labour kept its word not to raise taxes!

This shows that the government has found a way to increase tax revenue without raising tax rates:

• It increases minimum wages.
• That triggers automatic increases in:          
  • Employer NIC
  • Employee NIC
  • Income tax
• Businesses are forced to pay the difference.
• HMRC quietly collects a larger slice.

This is why many accountants now refer to wage increases as ‘fiscal levers disguised as social policy’. 

All this has been complicated by the Labour policies of increasing benefits in a time of national crisis. It still cannot rid itself of the traditional inbuilt desire to tax and spend.

The country is getting more and more fed up and hates Starmer with a venom not seen before. They realise that they are being duped and fed untruths. The suspicion is that Labour is moving towards increased control over the public (see previous letters) and democracy is slowly being strangled. As if this weren’t enough, the Labour Government has announced a policy of allowing local councils to defer the elections due in May 2026 for a year, as they say to ensure a ‘smooth transition’ to unitary authorities as a result of local government reorganisation. They claim that it will save money.

Even the Electoral Commission has raised concerns about the prospect of more delays to council elections in England, saying it risks “damaging public confidence”.

Ministers have indicated they would agree to postpone local polls due next May until 2027 if councils request a delay.

The government said some were concerned about their capacity to run the polls alongside a planned overhaul of town halls, as well as the cost to taxpayers of holding elections for councils that are due to be abolished.

But the commission, which oversees elections in the UK, said it did not think “capacity constraints are a legitimate reason for delaying long-planned elections”.

Vijay Rangarajan, the watchdog’s chief executive, said there was also “a clear conflict of interest in asking existing councils to decide how long it will be before they are answerable to voters”.

Delays to elections risk “affecting the legitimacy of local decision-making”, he added.

Labour has a majority in 18 of the 63 councils that have been asked about a potential delay, with the Conservatives holding a majority in nine and the Liberal Democrats in seven.

However the Conservatives are defending the largest number of seats, at 610 – more than a quarter of those currently due for re-election in May.

Reform UK, which is hoping to translate its leads in national opinion polls into big wins in May’s local elections, has accused Labour and the Conservatives of working together to prevent the party making further gains.

The Liberal Democrats have also claimed the move is a “Labour and Conservative stitch up to deny people their votes.”

Source BBC 19 December 2025.

Current polling suggest that the Reform Party would gain a majority in most of these councils. Surely this can’t be the reason behind the desire to postpone the elections…

The country, especially the North, is febrile, and discontent with Starmer and the Labour Party has reached unprecedented levels. There are talks of petitions and marches on Downing Street; indeed the farmers have started their actions already.

I have worked in volatile countries and I can see the signs in the UK of the possibility this discontent could spill over into civil unrest.

Watch this space!