Rachel Reeves’s speech was a pre-emptive confession that Labour would almost certainly break its manifesto commitment not to put up income tax in November’s budget. The credibility gap between Labour’s political theatre and the fiscal arithmetic has been obvious for weeks. The economic fundamentals haven’t changed for the chancellor, only the politics have – notably with Reform UK and the Tories making austerity policies central to their pitch.
Ms Reeves wants the coming argument to be that Labour is committed to protecting public services and jobs, while portraying her rightwing opponents as ideologically committed to shrinking the state. This is not a bad idea – if the wealthy fund it. And if a promise has to be broken, she has picked the politically optimal one – as even her shadow, Mel Stride, has conceded.
