The Butcher of the Treasury: How Rachel Reeves’ Austerity 2.0 Slaughtered 109,000 Jobs Last Month

The Employment Tax: Rachel Reeves’ NIC Hike Became a Job Destruction Machine

When a government destroys a quarter of a million jobs and calls it fiscal responsibility, you know the lunatics have seized the Treasury.

Today, Rachel Reeves will stride to the dispatch box and announce her latest round of “tough decisions” while carefully avoiding mention of the economic carnage her policies have already unleashed. One hundred and nine thousand jobs lost in a single month the worst employment collapse since the first Covid lockdown. Over 250,000 jobs vanished since her autumn budget. Unemployment at a four-year high.

Business leaders blamed the hit to jobs on Reeves’s tax-raising October budget, including a £25bn rise in employer national insurance contributions (NICs) affecting more than 1m companies, which came into effect in April.

If Britain still had a functioning press or a government that gave a damn –109,000 jobs lost in a single month would be splashed across every front page. Instead, it’s buried behind puff headlines about billions being funnelled into a French nuclear plant, one that will charge the British public three times more for electricity than it charges French citizens. You couldn’t script a better betrayal if you tried.

The Anatomy of Economic Vandalism

Let’s speak plainly about what’s happening: this isn’t market forces or global headwinds or any of the other euphemisms politicians deploy to avoid responsibility. This is ideological sabotage dressed up as economic competence. Reeves’s £25 billion National Insurance raid on employers her flagship October policy has achieved exactly what critics predicted: a systematic cull of British workers.

The sectors that keep communities alive, hospitality, retail, small businesses warned this would happen. They pleaded for sanity. They were ignored by a Chancellor more interested in impressing bond traders than protecting British jobs. Now unemployment queues stretch longer while Reeves prepares to inflict more “hard choices” on a country already bleeding employment.

This is austerity 2.0: cripple the real economy to appease financial markets, then blame workers for the consequences. It’s Thatcherism with a red rosette, implemented by people who claim to represent labour while systematically destroying it.

The Great Pretence

The most sickening aspect of this crisis isn’t the job losses, it’s the silence. Where are the emergency debates? The prime ministerial statements? The media investigations into policy failure on this scale? Britain has normalised economic destruction so thoroughly that a quarter-million job losses barely registers as news.

If Rachel Reeves were a Tory Chancellor presiding over this employment massacre, Labour MPs would be demanding resignations. Shadow ministers would be holding press conferences. The party machinery would be mobilised for political war. Instead, we get complicit silence from a government that’s forgotten which side it’s supposed to be on.

The media, meanwhile, obsesses over Westminster gossip while the real economy burns. A functioning press would be tracking down every business owner forced to shed staff, every family thrown into uncertainty, every community watching its economic heart ripped out. Instead, we get breathless coverage of cabinet reshuffles and social media spats.

The Logic of Managed Decline

What makes this employment crisis particularly damning is its deliberate nature. This isn’t accidental policy failure, it’s the intended consequence of a government that prioritises fiscal orthodoxy over full employment. Reeves has explicitly chosen to sacrifice British workers on the altar of Treasury respectability.

The National Insurance hike was designed to raise revenue while appearing to avoid direct tax increases on “working people” a semantic sleight of hand that reveals Labour’s complete disconnection from economic reality. Every pound extracted from employers through NICs is a pound less available for wages, investment, and job creation. The policy was an employment tax disguised as business taxation, and now we’re seeing the predictable results.

Yet rather than acknowledge this failure, the government doubles down. Today’s spending review will undoubtedly contain more of the same: higher taxes on productive activity, deeper cuts to public investment, and further restrictions on the economic activity that creates jobs. It’s a masterclass in how to destroy an economy while claiming to save it.

The International Embarrassment

Britain’s employment crisis becomes even more humiliating when viewed internationally. While other European economies maintain or expand employment, we’re witnessing controlled demolition under a supposedly progressive government. The contrast with countries that invest in their workforce rather than punish it couldn’t be starker.

France, Germany, and the Nordic countries understand that employment is not just an economic metric it’s the foundation of social stability and national prosperity. They tax wealth, invest in productivity, and maintain social partnerships that protect workers during transitions. Britain taxes jobs, disinvests in infrastructure, and abandons workers to market forces.

The result? We’re becoming the sick man of Europe again, this time under a Labour government that promised transformation but delivered managed decline. When your flagship economic policy destroys more jobs in months than most recessions manage in years, you’ve achieved something genuinely historic just not in the way you intended.

The Political Reckoning

This employment crisis exposes everything rotten about modern Labour. They’ve accepted Conservative assumptions about economics that deficits are inherently dangerous, that markets must be appeased, that workers must sacrifice for fiscal credibility. Having internalised Tory ideology, they now implement it more efficiently than the Conservatives ever managed.

The 250,000 workers who’ve lost their jobs since October weren’t consulted about this trade-off. They didn’t vote for a government that would prioritise Treasury orthodoxy over their livelihoods. Yet they’re paying the price for Labour’s intellectual cowardice and political timidity.

Meanwhile, the same government that claims it cannot afford to lift the two-child benefit cap somehow found billions for winter fuel payment reversals when focus groups demanded it. The message is clear: economic policy serves electoral calculation, not economic logic or social justice.

The Silence of the Lambs

Perhaps most damaging of all is the deafening quiet from Labour MPs who know this is wrong but lack the courage to say so. They sit in parliament, watching their constituents lose jobs, while their own Chancellor systematically destroys the employment base of their communities.

This isn’t party loyalty it’s complicity in economic vandalism. When backbenchers prioritise career advancement over constituent welfare, democracy itself becomes a hollow exercise. Representation without resistance is just elaborate theatre.

The trade unions, meanwhile, offer the occasional press release while their members join unemployment queues. Where are the strikes? The demonstrations? The political pressure that once made Labour governments accountable to working people? Apparently, institutional capture runs so deep that even organised labour won’t fight for labour anymore.

Today’s Charade

As Reeves prepares her spending review performance, remember what she’s really announcing: more of the same policies that have already destroyed a quarter-million jobs. More taxes on employment. More cuts to public investment. More punishment for the productive economy.

She’ll dress it up in the language of responsibility and difficult decisions. She’ll claim the mantle of fiscal discipline while presiding over economic chaos. She’ll position job destruction as economic realism while ignoring the human cost of her ideological choices.

This is what happens when a Labour government forgets that full employment was once the foundation of social democratic politics. When they abandon that principle for Treasury respectability, workers pay the price while politicians claim credit for managing decline responsibly.

Britain deserves better than a Chancellor who destroys jobs and calls it success. Until Labour remembers that employment is a political priority, not a market outcome, expect more months like this one and more silence from those who should be screaming loudest.

Paul Knaggs