Rachel Reeves must rethink how tax and spend decisions are made after welfare U-turn

Rachel Reeves during a visit to a manufacturer. Will the chancellor think outside the box? Photograph: Chris Furlong/PA

There are many lessons for Labour’s bruised leadership from last week’s embarrassing U-turn on welfare cuts, but one is surely that how – and when – fiscal policy is set is not working.

Binary fiscal rules, a slim margin for error (less than £10bn), and the Office for Budget Responsibility’s twice-yearly forecasts have combined to turn tax and spending decisions into a grim spectator sport.