huffingtonpost - 11 days ago

Rachel Reeves takes journalists questions after delivering a speech in the media briefing room of 9 Downing Street.Sitting in her office in 11 Downing Street with HuffPost UK last April, Rachel Reeves could not have been clearer.Asked if she would stick to Labour’s election pledge not to put up income tax, VAT or National Insurance, she said: “We made those manifesto commitments for a reason and we will stick with those manifesto commitments.”Shortly after 8 o’clock this morning, the chancellor all-but confirmed that those promises will be torched as she desperately tries to fill a £30 billion black hole in the government’s coffers when she delivers her next Budget on November 26.Reeves did not say that she is definitely going to blow up what remains of Labour’s political credibility, but it was very clear that the great betrayal of voters’ trust is in the post.In a highly-unusual pre-Budget speech from Downing Street, she told the country that “each of us must do our bit”.“As I take my decisions on both tax and spend, I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity and to ensure that the economy that we hand down to future generations is secure with debt under control,” she said.“If we are to build the future of Britain together, we will all have to contribute to that effort.”By ruling out deep spending cuts and a massive increase in government borrowing, the chancellor left herself with just one option – yet another hike in taxes.And given the huge sums that she needs to raise to balance the books, the smart money is on the basic rate of income tax going up by as much as 2p in the pound.“I think it is important people are honest,” the chancellor said as she prepares to break a solemn promise to the electorate. “As everyone can see, this year has thrown many more challenges our way.“It would be possible to cut capital spending, to change the fiscal rules, to make the numbers superficially add up, but I’m not convinced that would be the right thing for our country.“I have to respond to the world rather than the world I might want it to be.“And I believe the public will respond better to doing the right thing than just doing the expedite thing.”Reeves tried to blame the legacy of the last Tory government – specifically 14 years of austerity and Liz Truss’s mini-Budget – as well as the impact of Brexit for her government’s economic woes.A downgrade in UK productivity by the Office for Budget Responsibility has also blown a hole in the Treasury’s calculations.However, the government’s inability to force through £5 billion of welfare savings, the decision to lift the two-child benefit cap and the U-turn on scrapping winter fuel payments for 10 million pensioners have also contributed to the deep hole the chancellor finds herself in.Asked repeatedly by the media after her speech whether Labour’s election promises on tax still stood, Reeves refused to say they did.The political calculation inside Downing Street is that the voters will appreciate the fact that the chancellor is levelling with them and treating them like grown ups as she prepares to deliver the bad news in the Budget.But that is a huge political gamble because the public well remember Reeves and Keir Starmer promising not to put up their taxes before the general election.The chancellor may well have believed it herself when she said barely six months ago that Labour’s election manifesto promises were set it stone.It is now clear, however, that they were not worth the paper they were written on – and workers about to be hit in the pocket should not be blamed for delivering a withering verdict on Labour’s performance come the next general election.Related...All The Times Rachel Reeves Promised Not To Hike Taxes AgainRachel Reeves Paves The Way For Budget Tax Rises As Labour s Economic Woes Continue

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