Three weeks till budget day – and Rachel Reeves is ‘being honest’ about tax, just in time | Marina Hyde

4 hours ago 5

This would actually have been quite an understandable day for Rachel Reeves to cry at work. “I’m really clear,” the chancellor told the CBI less than a year ago, “I’m not coming back with more borrowing or more taxes.” Can I shock you …? “We did wipe the slate clean,” she continued less than 12 months ago. “[We] put public finances and public services on a firm footing, and as a result we won’t have to do a budget like this ever again.” Again: can I shock you …?

So, then, to Reeves’s podium appearance from Downing Street this morning. Vibes-wise, it was like knowing you were going to be very incompetently mugged in three weeks’ time, but having to listen to a speech from the mugger about the context of it all. Or maybe a speech from an asteroid trying to get out in front of what people are going to say about it when it craters the West Midlands.

Reeves’s delivery is more wooden than the panelling behind her today, and has all the verve of being informed that we’re experiencing higher than normal call volumes. Your estimated wait time to the budget is 22 days. There were moments in this outing where it felt like the chancellor’s job had already been automated. She must have been absolutely unplayable on the complaints line at HBOS.

Anyhow, please listen carefully as her menu options have recently changed. “The world has thrown even more challenges our way,” Reeves explained, with the air of someone who spent the four months between the general election victory and her first budget last autumn telling everyone how utterly abysmal the situation was, and then being blindsided by the collapse in consumer, business and investor confidence, and a desperately unhelpful economic climate of foreboding about what was to come. Luckily Reeves had a cunning plan up her sleeve back then: raising employers’ national insurance contributions, which took care of any last remaining traces of optimism.

Yet once again this morning, the government was opting to serve as Cassandra for its own forthcoming fiscal event. Maybe because it went so well last time. Having absolutely sworn before the election that there were “no ifs, no ands, no buts” to her tax pledges, Reeves today really wanted to introduce you to Mr If, Miss And and President But. We just need Mrs Fully Costed to complete the set.

A lot of things seemed to have eaten Reeves’s homework, but one of the biggest bites was apparently taken by budget watchdog the Office for Budget Responsibility. The OBR’s decision to downgrade its productivity forecasts for the economy was treated as a serious curveball, as opposed to an arguably belatedly realistic engagement with the facts. For someone who spent half this speech and the Q&A after it announcing that she had to deal with “the world as I find it”, Reeves certainly gave the impression that she could dismiss gravity or the first law of thermodynamics as just an opinion by some unelected physics.

Another of the challenges the world seems to have thrown her way is the discovery that you cannot get a single spending cut through the parliamentary Labour party. Again, if only there’d been signs. Reeves didn’t put it that way, obviously. She said she didn’t think it was fair “to blame the parliamentary Labour party for the OBR’s supply-side review”. And I don’t think it’s fair that a good half of the parliamentary Labour party would not have the first clue what the words “supply-side” even mean. So we’re all having to live with injustice.

Other omissions? It was disappointing that no one asked the chancellor if she defines herself as a “working person”, one of that mythical tribe on whom taxes were never, ever, ever going to be raised. Last week, Sam Coates at Sky got hold of the definition of “working people” that the Treasury is supposedly working around ahead of the budget later this month, which is apparently the bottom two-thirds of earners – which is to say, no one earning more that £45,000 a year. “Extraordinary if true,” the former IFS director Paul Johnson observed drily. But aspirational, surely, for many experienced plumbers and train drivers to learn that they are no longer working people, and have passed with immediate effect into Labour’s upper category: those with the broadest shoulders/the privileged few/fatcats. Under this definition, a chancellor definitely isn’t a working person, even though Rachel is always telling you she’s working tirelessly to do this or that for the country.

Then again, the chancellor does love a simplistic way of putting things – black holes, fixing house foundations – so here’s one for her. Why does she seem to be catching up only now with things many people told her before the last election? Why is the long-term state of the British economy a surprise only to Reeves and to the cadre of full-time dreamers who believed Starmer’s Labour were “the grownups”? As so many made clear before the general election, Labour’s promises on tax and blandishments about growth were totally unrealistic and un-thought-through. In fact, they were such obvious obfuscations or deliberate misdirections that for my money they amounted to lying. Can it genuinely be that the chancellor didn’t catch herself on to the glaring realities of “the books” – which are effectively always open, as the IFS pointed out at the time? No, it can’t. As she put it about the details of the public finances during the run-up to last year’s election: “We’ve got the Office for Budget Responsibility now … You don’t need to win an election to find out.” Halloween might have passed, but huge numbers of these quotes are going to haunt Reeves for the foreseeable future.

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She was dead right on one thing today though, albeit unwittingly: “it’s about being honest”. Clearly, Reeves would love to think otherwise, but it feels already too late for her to be successfully honest. The run-up to a general election it was going to win by a landslide was Labour’s moment to be honest. In terms of its public standing on the economy, almost everything since has flowed from that conscious decision not to level with voters about things it honestly must have known at the time. By way of some speech filler today, Reeves droned vaguely about making the UK an enticing investment for futuristic industries like AI and biotech. No doubt we’re all in favour of that – but for her own personal future, the chancellor would be a lot better off attracting a time machine firm.