ANDREW NEIL: Inflation. Interest charges. Living requirements. Jobs. Housing and nationwide safety… Labour’s OPERATION GASLIGHT is in full swing

The country has been understandably mesmerised by, first, the Prime Minister’s ongoing job security crisis and, more recently, the jaw-dropping trials and tribulations of the Andrew formerly known as Prince.

All of which has meant that government policies on matters which most directly affect our lives – prices, jobs, cost of living, housing, national security – have not been getting quite the scrutiny they deserve. Time to put that right.

After a miserable first 18 months in which almost nothing seems to have gone well for the new Labour government, ministers have taken to claiming that 2026 will be the year when the country turns the corner, a year of delivery in which people will start to see and feel real improvements in their lives.

Well, perhaps. About time too, you might think. But the omens, it has to be said, are not propitious. Let’s start with prices, which are always on everybody’s mind.

Ministers were out and about this week heralding a fall in the inflation rate to 3 per cent in January, from 3.4 per cent in December. But let’s not forget Labour inherited 2 per cent inflation from the previous Tory government in July 2024 – and proceeded to almost double it in a year with inflationary public-sector pay rises while lumbering private-sector firms with higher taxes and labour costs.

Inflation, Keir Starmer claimed, was falling because of ‘choices’ his Government had made while ‘lower food and petrol prices’ were easing cost-of-living pressures

As a result, even at 3 per cent, inflation is still 50 per cent above the official 2 per cent target – and still the highest in the G7 club of the world’s major market economies. As I’ve written in these pages before, I expect inflation will reach 2 per cent again by late spring or early summer. But just why the Government deserves any credit for getting it back to the rate it inherited two years before escapes me – as I suspect it does you.

But, of course, that hasn’t stopped Keir Starmer. Inflation, he claimed, was falling because of ‘choices’ his Government had made while ‘lower food and petrol prices’ were easing cost-of-living pressures. Thus did the PM manage to gaslight the nation with untruths — while simultaneously showing that his grasp of economics is as firm as his grip on the Chagos Islands.

For a start, his Government has done nothing to reduce food and fuel inflation. The price of petrol at the pump is falling because of a global glut in oil production. But food prices are not falling – they’re just rising more slowly than they did (still up 3.6 per cent last month on a year ago) – with all the previous rises under the Tories still baked into today’s food prices.

We have a PM who doesn’t seem to know that a lower inflation rate is not the same as falling prices. It cannot hide the fact that we’re in the midst of two wasted years when it comes to inflation, two years which have prolonged the Tory cost-of-living crisis. The same ignorance is at work when it comes to interest rates.

Ministers regularly boast about six (small) cuts to interest rates since they came to power – even though it is the Bank of England, not ministers, that determines the level of rates. They don’t tell you the Bank has been slower to cut rates than other central banks because the Government allowed inflation to reignite. Nor do they mention that we still have the highest interest rates in the G7.

Chancellor Rachel Reeves vows not to ‘leave a generation of young people to languish without prospects’. Sadly, that is exactly what she is doing

The record is no better when it comes to jobs. Chancellor Rachel Reeves vows not to ‘leave a generation of young people to languish without prospects’. Sadly, that is exactly what she is doing.

When she took charge of the Treasury the unemployment rate was just over 4 per cent, which means around 1.4 million were on the dole. By the end of last year, after 18 months of her tender care, the rate had risen to 5.2 per cent, which meant close to 2 million were jobless.

That overall figure is bad enough. But within it lies a truly horrendous picture of youth unemployment, which has risen steadily under Labour.

Around 16 per cent of 16 to 24-year-olds are now without jobs – higher than even during the pandemic lockdowns and, for the first time since records began, higher than the European Union, in which mass youth unemployment has long been a blight we’ve managed to avoid. No longer.

Turns out that hiking the minimum wage by too much for young people in a weakening labour market and undermining the hospitality sector (a big youth employer) with tax rises while technological change (artificial intelligence) is doing away with the need for many entry-level jobs was a pretty toxic brew for young folks’ job prospects. Who knew? Certainly not the Chancellor, whose warm words of concern about young people ‘languishing’ on the dole have proved to be as bankable as one of Starmer’s regular promises not to execute more U-turns.

Mind you, even those in their 20s with well-paid jobs are still unlikely to make it on to the housing ladder – for the simple reason that Labour isn’t building anything like enough homes.

Labour vowed to build 1.5 million new homes in England in the five years after it was elected. Like so many Labour pledges, just how that was to be achieved was never explained, bar some vague promises about some half-hearted reforms to our growth-destroying planning laws.

During Labour’s first 15 months 175,000 homes were completed in England – well short of the 300,000 homes a year needed to meet the Government’s 1.5 million target by 2029. It’s actually a 14 per cent decline from the previous five quarters – and worsening. Completions in the third quarter (July to September) last year dropped to 31,000, the weakest quarter since the depths of the pandemic. Last year looks like being the worst for housebuilding since 2014.

Government apologists retort that Labour has been in power for only 20 months so housing starts rather completions would be a better metric of success. Fair enough. But starts are stuck on around 30,000 a quarter, again nowhere near enough to meet the 300,000-a-year target.

However you cut it, that 1.5 million goal is already toast. Yet, incredibly, ministers still have the temerity to appear on the public airwaves insisting it will be met. They are asking us to ignore the evidence of their own official housing statistics and the sad state of a construction industry in precipitous decline. It is Operation Gaslight in full swing.

Sometimes you feel that’s all ministers do – they’re just gaslighting, not governing.

Even at 3 per cent, inflation is still 50 per cent above the official 2 per cent target – and still the highest in the G7 club of the world’s major market economies

Nowhere is that more true than defence. Starmer struts the world stage posing as a statesman of substance leading a military power of note. In reality, he’s presiding over our military decline.

Starmer’s penchant for talking big but failing to put our money where his mouth is was remarked on privately by our allies at last week’s Munich Security Conference. They see how far we’re falling behind Europe’s rearmament efforts.

We are barely increasing defence spending at the moment (it will increase 0.2 percentage points to 2.5 per cent of GDP in 2027) and there are no roadmaps, no blueprints, no spending projections to get it to 3 per cent by 2030, never mind the minimum 3.5 per cent required.

Ministers are now grasping at straws. Yesterday’s better-than-expected government borrowing in January had ecstatic ministers implying our fiscal woes were all but over. Even Reeves, recently missing in action, has decided to come out of hiding and deliver next month’s Spring Statement, rather than leave it to an underling. Thus are mythical mountains built on one month’s fiscal figures.

But no amount of blather and denial can obscure the fact that when it comes to inflation, interest rates, living standards (which remain stagnant), jobs, housing and national security – the very stuff of government – we have a new administration which has already failed the nation.

When people eventually grow tired of a news cycle convulsed by drama and scandal – and return their attention to the often harsh realities of everyday living – they are in for a rude awakening. At least now you’ve been warned.