Despite Labour rivalling Celebrity Traitors for intrigue, Rachel Reeves must be faithful to this key pledge
As we have learned from bitter experience, voters can pay a high price for Chancellors’ mistakes
Fans of Celebrity Traitors who’re missing their regular fix of intrigue, bluff and counter-bluff might as well tune in to the blossoming reality TV show that is the Labour government.
Days after Chancellor Rachel Reeves strongly hinted income taxes would have to rise in the upcoming Budget, breaking a manifesto pledge, Labour is now strongly hinting that they will not.
Conservative leader Kemi Badenoch was aghast, saying: "I've never seen a government do this in the run-up to a Budget. I have never seen this level of chaos, this level of irresponsibility.”
READ MORE: Why the public needs decisiveness, not a government under Keir Starmer that changes with the wind
‘Surprised and confused’
Clearly, she must have had a mental blank about the Liz Truss era of government – a comfort not afforded to some mortgage payers – but still, she has a point. What, we wonder, will next week bring, a third U-turn?
Jim O’Neill, a crossbench peer and former Conservative Treasury minister who advised Reeves while Labour was in opposition, told BBC Radio 4 he was “a bit surprised and confused”, saying the change appeared to have been motivated by divisions within the Labour party.
“I think you’ve got to be very careful to not send messages to financial markets that you’re going to put party consolidation ahead of fiscal credibility and the way the markets have initially reacted shows you exactly that,” he warned.
The power of the markets
In contrast, the markets had liked Reeves’ “wartime” speech about everyone doing their bit in which she sought to prepare the country for income tax rises. The problem is what the alternative strategy might be. O’Neill said that if Labour decided to “whack business because it sounds good to the left wing of the party, that isn’t going to go down well and just stores up more issues going forward, I suspect”.
As we have learned from bitter experience, voters can pay a high price for Chancellors’ mistakes. The political pressure on Labour may be enormous, but the power of the markets is far greater.
Reeves has made great play of her determination to be fiscally responsible and that is one pledge to which she must stay faithful. Failure to do so would be an act of betrayal and one that few would be likely to forgive.
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