Chancellor Rachel Reeves took office promising a new era of growth and wealth creation. Instead, she has presided over economic stagnation, falling employment, squeezed living standards and mounting debts. The desperate weakness of her position led Reeves to take the highly unusual step this week of delivering an early morning, televised briefing which her team claimed would “set the context” for the tough Budget she is planning.
But the much-hyped event was a shambolic anti-climax, where empty slogans were matched by downbeat rhetoric and incoherent verbiage. Beyond the gloomy waffle, however, her aim was clear. She wants to pretend the government has been forced into major tax hikes because of a host of factors beyond its control, including conflicts abroad, Brexit, President Trump's tariffs, and the legacy of Tory austerity.
But such excuse-making will not wash. The real cause of the present meltdown is Labour's inability to live within its means. Bills for welfare, immigration, public sector pay and the NHS are all soaring, while the government, hamstrung by left-wing sentimentality and its links with the trade unions, refuses to contemplate restraint or reform.
Indeed, many left-wingers actually welcome tax rises, both as a supposed means of redistributing wealth and as a vehicle for expanding the state.
In the name of promoting equality they hanker after specific taxes targeted at the rich, even though such punitive levies have never worked because they deter investment and lead to an exodus of wealth creators.
Reeves is in such fiscal dire straits that she may go down this confiscatory path. Only this week, it was reported that she is contemplating a new 20% charge on the assets of citizens who leave Britain.
This is just one of more than 100 revenue-raising measures said to be under consideration by the Treasury, among them a raid on private pensions and the introduction of new council tax bands on high value homes.
But these potential changes will not provide enough cash to satisfy the ravenous appetite of the Labor state. That is why Reeves and Sir Keir Starmer are hinting that the Budget may push up rates of income tax, VAT or national insurance, the three most lucrative revenue raisers.
Every 1p rise in income tax, for example, brings in around £10billion. Yet it would be an act of spectacular political self-harm for Labor to widen any of this trio's embrace, given that the party made a cast-iron commitment not to do so in the General Election.
This manifesto pledge undoubtedly helped Labor win its landslide. To overturn promises on income tax, national insurance and VAT would make a mockery of democracy.
If income tax goes up in the Budget, the positions of the Chancellor and the Prime Minister will be untenable. Their credibility would be so shattered that no amount of buck-passing or spin could save them.
Before his election as US President in 1988, George Bush Snr famously pledged, “Read my lips, no new taxes,” only to increase the burden on Americans once he reached the White House.
That sealed his 1992 defeat, just as Nick Clegg's broken promise on university tuition fees reduced the Liberal Democrats to a rump at the 2015 General Election.
The unpopularity of tax rises is the reason that the basic rate of income tax has not gone up since 1975, when Denis Healey was Chancellor.
Whatever Reeves claims, there is no justification for putting it up now. We already pay far too much in tax – new research shows that the average British family will pay £1.3million in tax over a lifetime, including £600,000 in income tax.
Moreover, spending cuts are an obvious alternative to tax rises. There is ample scope for reductions when the state is spending over £1.2trillion a year, including unprecedented sums on social security payments, asylum accommodation and top-heavy bureaucracy.
The last thing the Chancellor should be plotting is another raid on our pockets.