BMW is stalling plans to restart production of electric Minis at its factory in Oxford. The Cowley plant, an auto-building site since 1913 and the original home of Morris Motors, was bought by the German carmaker twenty years ago.

The future of this iconic manufacturing hub is now in doubt. And a big part of the reason is the over-zealous imposition by Labour of “net-zero” rules originally introduced by the Tories.

Britain's overly-punitive electric vehicle (EV) rules are pushing us towards an economic, political and societal disaster.

My latest weekly "Economic Agenda" column

@Telegraph @TeleBusiness

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telegraph.co.uk/business/2025/… BMW has halted a £600m overhaul of Cowley, it emerged last weekend, amidst slow demand for electric vehicles (EVs) and the UK’s ZEV (zero-emission vehicle) regulations – which are even more punitive than those operating across the European Union.

I’m astonished this move by BMW hasn’t attracted more attention.

It calls into question not only production at Cowley, a site employing well over three thousand people, but is a moment of truth for mass car-making in Britain per se – a sector providing upwards of a million jobs, and many more in related industries and activities.

The UK’s switch away from petrol and diesel cars and towards EVs has now descended into chaos.

Carmakers previously happy to take subsidies to facilitate the huge upheaval of shifting from internal combustion engines to battery-powered cars, now bemoan weak consumer demand for EVs and the extremely punitive fines manufacturers face as a result.

Either ministers get beyond virtue-signalling and ease net-zero rules, quickly and significantly, or what remains of UK car-making will be decimated, as production becomes economically unviable and the market is overwhelmed by a flood of heavily-subsidised Chinese-made EVs.

Heavily-subsidised Chinese-made EVs now account for 76pc of all EVs sold worldwide. Plus China controls 90pc of global production capacity of the rare earths and other metals used in EV batteries.

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An economic boom could be in the offing - the UK certainly needs one - if the government gets its policies right when it comes to Artificial Intelligence.

But the energy demands of this AI revolution are so high that, over the near-term at least, @Keir_Starmer will need to choose between a tech-driven growth-boost and his government's increasingly costly and growth-sapping "net zero" priorities.

My latest weekly "Economic Agenda" column

@Telegraph

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telegraph.co.uk/business/2025/… Back in mid-January, as the full impact of Rachel Reeves’s tax-raising October budget began to hit home, consumer and business sentiment plunged.

Keir Starmer badly needed to a new growth narrative – to try to convince voters and investors the UK economy, having shrunk in two of the previous three months, would soon bounce back.

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My weekly "Economics Agenda" column in @Telegraph often focuses on the UK’s national accounts – with good reason.

Britain’s public finances are in a parlous state, teetering on the brink of systemic meltdown. I don't say this lightly.

In this week's column, I show that, even though our headline national debt figures are alarming, the underlying reality is even worse.

That's because the true scale of our national debt, the liabilities that the government - ie. taxpayers - face is much, much bigger than the numbers we hear discussed in Parliament and on our airwaves.

Serious financial analysts understand this - and the scale of our vast "off-balance sheet" liabilites is another reason why "gilt yields" have been rising.

In other words, the borrowing costs faced by governmment have been going up – along with the related debt interest bill which must be funded by higher taxes and/or even more borrowing.

In 2023/24, the government spent a jaw-dropping £107 billion on debt interest – almost 4pc of GDP, around 9pc of all government spending, roughly what the state spends on education !! This is insane - and deeply immoral - and that total is set to rise even more.

The danger is that the state's debts and related interest payments spiral out of control, causing a funding crisis and a market meltdown that does very serious economic and societal damage.

Again, I don't say this lightly - and, even though I'm an optimist by disposition, I certainly don't apologise for pointing out these bleak financial realities.

Read the rest of this thread to learn more ...

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telegraph.co.uk/business/2025/… In 1997, when Tony Blair took office, the economy was growing 4.9pc a year and the national debt was 36pc of GDP – low by historic standards. Growth continued at 3-4pc per annum for the rest of that Parliament – so a relatively small government debt pile remained manageable as a share of total output, allowing the state to borrow and spend more.

Keir Starmer’s incoming administration faced a different situation. Over the previous fourteen years, the Tories had overseen a decade of tough fiscal rhetoric during which the national debt actually ballooned, then a wildly over-stringent Covid lockdown which weakened our public finances even more.

As a result, Labour entered government last July with Britain in a high-debt-high-tax-low-growth doom loop – with growth at a historically paltry 1.1pc and national debt near 100pc of GDP, a 60-year high.

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Earlier today I spoke at @FarmersToAction rally - because I believe this government's proposed changes to inheritance tax (IHT) will seriously damage our farming sector, push up food price inflation, negatively impact the stewardshire and beauty of our countryside and undermine the UK's food security.

Plus, the IHT changes announced in Labour' s October budget will also do real harm to the UK's family-owned small and medium-sized enterprises (SMEs) - the backbone of the British economy, the health of which is vital to jobs and growth.

I believe the public in general will support Britain's small farmers once they understand more about how the removal of agricuiltural property relief (APR) and Labour's other IHT changes will destroy many family-run farms and SMEs more generally.

I agree that some investors have been using APR to buy land purely for speculative reasons, abusing the original purpose of this tax relief - and that practice should be curbed.

But in this thread I propose a policy solution to that problem which doesn't damage our small family-run farms, the future of which is so vital to our countryside and the UK economy more broadly.

🧵1/7 Back in September 2000, British farmers working together with truck drivers brought the UK almost to a standstiill. Sharp rises in petrol and diesel prices saw farmers and hauliers blockade roads, fuel terminals and refineries, putting huge pressure on Tony Blair’s New Labour government.

Blair declared an “NHS red alert” and invoked “emergency powers” to ensure essential fuel deliveries in a bid to sway public opinion. But many voters, as sick of spiralling fuel costs as the farmers and truckers, staunchly backed the protests even as slow-moving rows of tractors thwarted motorway traffic.

Even what was then a popular government suffered badly. As petrol stations closed and supermarkets began rationing, Labour’s poll-rating plunged from a ten-point lead to a five-point deficit in a single month.

Blair and then Chancellor Gordon Brown were forced to back down. They eased the tax burden on motorists including a freeze in fuel duty – the protesters’ main demand – policies ministers had previously dismissed as “impossible”.

For the autumn of 2000, read the Spring of 2025. I genuinely believe that if Britain’s farmers stage serious - and peaceful - protests about Labour’s deeply misguided IHT changes, then the broader public will back them.

Unless the Government changes its mind on these spiteful and counter-productive measure, I’d say we’re likely in for a rerun of September 2000, with even worse political fall-out for a Labour government that is already far less popular today than Tony Blair’s Labour was almost a quarter of a century ago.

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Rachel Reeves last week claimed that she is “fixing the foundations of the economy…creating the conditions for growth and investment”.

Yet in last October’s budget, with the tax burden already at a seventy-year high, the Chancellor raised taxes another £40bn per year – equivalent to putting 5p on the UK’s 20-pence-in-the-pound basic rate of income tax.

Reeves also said in her speech at Siemens in Oxfordshire, that: “There is no trade-off between economic growth and net zero”.

This is arrant nonsense.

A major example of how net-zero policies are curtailing growth, doing serious economic damage in fact, is the zero-emission-vehicle (ZEV) mandate, including the ban on new petrol and diesel cars by 2035.

ZEV rules, and the related fines, which are far more punitive in the UK than across the EU, are now systemmatically destroying the UK's car-making industry - a sector which employs upwards of a million people.

My latest weekly @Telegraph "Economic Agenda" column.

telegraph.co.uk/business/2025/…

🧵 1/7 Much of the historically huge £40bn annual tax rise in Reeves's October budget actually falls on business - not least the £25bn increase in employer national insurance contributions.

Union-friendly regulation in Labour’s employment bill will cost companies another £5bn per annum, with firms shelling-out for an inflation-busting rise in the minimum wage too.

Just the prospect of these measures ­– the tax rises and minimum wage increase start in April – has seen firms rapidly shed workers, with employment now falling at its fastest rate since the 2008 financial crisis.

Since the October budget, consumer and business sentiment have plunged, pushing Britain to the brink of recession.

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“Is Labour’s economic plan working?”. That was what an audience member asked the panel, of which I was a member, on last week’s BBC Question Time.

"To be fair," I answered, Keir Starmer’s government come into office last July facing “a pretty ropey economic inheritance”.

"Yet actions since, especially Chancellor Rachel Reeves October budget, have made a bad situation far worse”.

My latest weekly "Economics Agenda" @Telegraph column.

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telegraph.co.uk/business/2025/… In 1997, when Tony Blair entered Downing Street, UK GDP was expanding at an annual rate of 4.9pc, with growth over the next few years often exceeding 3-4pc.

The national debt was just 36pc of GDP, very low by historic standards, with a buoyant economy keeping that debt pile manageable as a share of total output, with interest payments under control, allowing scope for the government to borrow and spend even more.

Starmer’s incoming administration faced a different situation. Yes, annualised growth of around 1.1pc in the middle of last year was, as the Tories often point out, “the fastest in the G7”. But the entire Western world, except the US, has long been in the post-lockdown doldrums.

Britain hasn’t managed 3pc growth – bang average during the Blair years – for over a decade. And government debt when Labour came in this time around was around 100pc of GDP, its highest level since the 1960s.

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Back in June, a fortnight before the government’s landslide election victory, I warned in my weekly "Economics Agenda" column in the @Telegraph that "ghosts of the 1970s haunt Labour’s economic resurrection”.

Would-be Chancellor @RachelReevesMP claimed ahead of the election that her party could significantly increase government spending “without raising taxes on working people”.

Labour’s “pro-growth” policies would deliver the economic expansion needed to allow the government to take on more debt to fund lots of extra spending, we were told.

The Tories had, of course, already pushed the UK’s tax burden to 100pc of GDP – a 60-year high.

But the argument seemed to be that Reeves could jack up government borrowing even more because she “used to work at the Bank of England” and her name wasn’t Liz Truss @trussliz

Here's my column from six months ago

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telegraph.co.uk/business/2024/… Liz Truss was bundled out of office, of course, in October 2022, becoming the UK’s shortest-serving Prime Minister in history.

Measures in her “mini budget” were judged by practically the entire political and media establishment to have “crashed the economy” – not least given the subsequent sharp spike in government borrowing costs.

“That’s not true,” I wrote last June. “And claims it is risk sparking bond market turmoil and resulting economic chaos far worse than we saw in the autumn of 2022”.

I evoked “ghosts of the 1970s” in that June column because in 1976 Jim Callaghan’s Labour government pushed the UK economy off a cliff – with Britain enduring the ignominy of being rescued by the International Monetary Fund.

A generation of misguided and ideologically-driven industrial subsidies, soft-budget constraints and, above all, “spend to grow” hubris drove Britain into an insolvency cul-de-sac.

Financial markets – more specifically, the huge pension funds, insurance companies and other global institutional investors that lend governments money – had forced a fiscally incontinent Labour administration to go “cap in hand” to the IMF for a bailout.

“I’m not saying that will happen over the coming months,” I wrote last summer. “But the notion that it couldn’t because Truss and the Tories will be gone is reckless in the extreme”.

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This should be the season to be cheerful. But no amount of festive spirit can hide the fact the UK economy is in trouble.

I have no wish to be a grinch – Christmas is a time to be optimistic and to give thanks.

But the reality is that the British economy has stalled, inflation is rising and there are growing fears the current mild downturn could morph into a fully-blown crisis.

"Britain has developed a dangerous credibility gap in the markets"

My final @telegraph column of 2025

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telegraph.co.uk/business/2024/… Last week, the Bank of England’s monetary policy committee (MPC) warned that “most indicators of UK near-term activity have declined”, while highlighting that stubborn inflation will prevent any further cuts in interest rates anytime soon.

The MPC voted six-to-three to keep its benchmark rate at 4.75pc on Thursday, with a majority expressing concern that recent increases in wages and prices had “added to the risk of inflation persistence”.

Having previously predicted 0.3pc growth during the last three months of 2024, the Bank now points to zero growth during the final quarter.

That’s shocking, but hardly surprising. GDP fell by 0.1pc during both September and October.

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On the day that thousands of farmers protest in London, my most recent @Telegraph column on Labour’s plans to slap inheritance tax on family farms.

This policy is ill-thought through and deeply counter-productive – with a strong whiff of class prejudice.

The government needs to think again - and fast.

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telegraph.co.uk/business/2024/… Back in September 2000, British farmers, working together with truck drivers, brought the UK to the brink of collapse. Protesting at successive sharp rises in petrol and diesel prices, farmers and hauliers blockaded roads, fuel shipping terminals and oil refineries, putting huge pressure on Tony’s Blair’s “New Labour” government.

Blair declared an “NHS red alert”, invoking “emergency powers” to ensure essential fuel deliveries in a bid to sway public opinion. But many voters, equally sick of spiralling fuel costs, staunchly backed the farmers, even as slow-moving rows of tractors thwarted motorway traffic.

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The battle over "net zero" has only just begun.

My latest weekly "Economic Agenda" column

The UK, and much of the Western world, faces huge enviro-industrial conflict over the coming years, which could shatter the "net zero" consensus and tear governments apart – particularly those on the left.

@Telegraph

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telegraph.co.uk/business/2024/… Scotland’s last remaining oil refinery – Grangemouth – is to shut, we learned last week, with the loss of 400 jobs.

The plant – co-owned by Sir Jim Ratcliffe’s Ineos – is closing due to the UK’s incoming ban on new petrol and diesel cars to hit net zero targets.

Grangemouth is a hugely important facility. It produces most of the petrol, diesel, heating oil and aviation fuel used in Scotland, northern England and Northern Ireland.

The closure, said Ineos, reflects lower fuel demand given the "ban on new petrol and diesel cars due to come into force".

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My election take - as outlined in my latest @Telegraph column.

Labour’s majority of 170 is, of course, historically large – and that is what has rightly dominated the post-election headlines.

Yet talk of the @Conservatives being wiped out, with the Lib Dems becoming the main opposition party, was so much campaign hyperbole.

Tony Blair’s first-term majority of 179 back in 1997 was bigger than that just won by Starmer. And as statistical nerds have been pointing out, Labour’s latest vote share was just 34pc – significantly less than the 40pc chalked up by @jeremycorbyn when he lost to @theresa_may in 2017 (while denying the Tories a Commons majority)

Labour’s huge majority today, and the enormous power that represents, was backed by just 20pc of eligible voters – that is, 34pc of the 60pc of the electorate who turned-out and cast their ballot. This is Starmer’s “loveless landslide”.

The @UKLabour leader is riding a wave of media positivity - for now. But this government's low popular support - despite that Commons majority - combined with serious economic challenges, means Labour's "honeymoon" is likely to be short.

And here's why ...

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telegraph.co.uk/business/2024/… Tony Blair came into office off the back of a 72pc national turnout in 1997, reflecting genuine enthusiasm for “New Labour”.

That's in stark contrast to last week's election – when so many of us stayed at home - or voted negatively, for our least-worst option.

Labour now boasts 412 seats, 63pc of all MPs in the new Parliament, having won little more than a third of votes cast. And while the Liberal Democrats have surged to 72 seats, 11pc of the new Parliament, on around 12pc of the vote, Reform chalked-up 14pc of the national vote share but got just 5 seats (less than 1pc of this Parliament).

So the Lib Dems are set, for the next five years, to control fourteen-times more Commons seats than a party which fundamentally opposes them on many issues and which beat them easily in terms of electoral support – by around 600,000 votes.

Starmer has floated the idea of lowering the voting age from eighteen to sixteen – a move likely to prove hugely controversial.

But the deeply “unrepresentative” nature of this Parliament means that, if constitutional upheaval is anyway afoot, there will be huge pressure – not least from Nigel Farage – for a move away from the vagaries of first-past-the-post and towards a more "proportionate" system.

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Some thoughts on UK utility bills and "net zero" ....

From April, households using an average amount of energy will face an annual bill of £1,690 for their combined gas and electricity – down from £1,928 between January and March – after regulator Ofgem lowered the energy price cap last Friday.

This amounts to a saving of £238 a year for the typical household. But given the price cap is set on a quarterly basis (this newly-announced level is in place until the end of June), it makes more sense to think of an average saving of around £20 a month.

Despite this reduction, UK utility bills remain much higher than before Russia invaded Ukraine in February 2022 – even though wholesale gas prices are now considerably lower. UK utility bills are also very high by international standards.

Sky-high electricity prices - despite the relatively large share of "cheap renewables" in our energy mix – are hammering UK households and making many of our manufacturers less competitive.

My latest @Telegraph column argues that unless voters see renewables leading to cheaper, rather than more expensive energy bills, attempts to achieve "net zero 2050" - or any meaningful carbon reduction target - are likely to be politically derailed.



Thread 🧵 1/9telegraph.co.uk/business/2024/… During January, domestic end-user electricity prices were 40.73 c€/kWh (euro cents per kilowatt hour) in the UK – some 62pc above the EU average

The equivalent figures were 29.08 c€/kWh in France and just 22.04 c€/kWh in Spain.

In the US, while there is variation from state to state, average domestic electricity prices were just 16.27 c€/kWh last month - two-fifths UK levels.

This at least partly reflects America’s success in transforming itself from a major importer to a major exporter of energy - reflecting the impact of the fracking revolution on US oil and gas industry output.

Back in 2020, the last full year before signs of rising Russia/Ukraine tensions started spooking global energy markets, UK electricity prices averaged around 27.15 c€/kWh – a third lower than now.

Thread 🧵 2/9

Raising corporation tax from 19% to 25% in April makes no sense. @RishiSunak @Jeremy_Hunt need to change their minds.

The @OBR_UK should be a guide to policy, not a straitjacket. I explain why in my latest @Telegraph column, summarised below:

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telegraph.co.uk/business/2023/… Far from raising revenue, the upcoming 6ppt corporation tax hike will likely cost @hmtreasury money.

For many lockdown-ravaged firms, now facing soaring costs & sky-high energy bills, this huge tax hit will be the last straw.

They'll fold altogether...paying no tax at all

2/8

When ONS recently released new wage data, countless newspaper headlines & broadcast bulletins suggested public sector workers are paid less than rest of us - so deserve a particularly big wage rise.

But it's not true - as I write in @Telegraph 1/12 🧵

telegraph.co.uk/business/2022/… Public sector workers are paid MORE on average than private sector workers – and have been for decades.

The average weekly public sector wage in 2021 was £579, but just £536 in the private sector – with state workers’ wages around 8% higher. 2/12

I back free-at-point-of-use healthcare.

But despite efforts of frontline staff, NHS clinical outcomes compare very badly with other wealthy nations.

Voters are losing patience with this chronically inefficient organisation.

My @Telegraph latest 🧵 1/9

telegraph.co.uk/business/2022/… Cost-of-living squeeze won't ease soon. Global energy prices still high & "core" inflation (minus food/energy) is 6.2%

While CPI 9% higher, Producer Price Index is 18.6% up over last year - costs that will soon fed through

So inflation will get worse before it gets better

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