Rachel Reeves has put party before country – and the people will hate her for it

Rachel Reeves would have been forgiven for shedding a tear again when she stood up to deliver her Budget speech. The theatre of the occasion had been destroyed by the accidental publication an hour earlier of the Office for Budget Responsibility report.

She must have felt that this was the last straw, after she had already lost the chance to pull the biggest ever rabbit from the parliamentary hat when the decision not to raise income tax rates was leaked to the Financial Times two weeks ago.

Imagine the surprise if she had told a noisy Commons, expecting a manifesto-busting income-tax rise, that she had decided that she did not need to do it after all. Instead, she was shouting into a chamber in which MPs had already read about the main Budget measures on their phones.

It was not her fault, but it was unfortunate for a chancellor so often accused of blaming others that she had to begin her statement by – however justifiably – blaming the OBR. After that awkward start, though, it was a strong speech, and much of the Budget might have been described as “playing the best possible game with a very bad hand”.

But no presentational tricks could conceal the reality, which is that Reeves has chosen party before country. She and Keir Starmer have put saving their careers before the national interest. Instead of trying to save money on welfare spending they have increased it, and have raised taxes to pay for it.

The biggest cheers from the Labour benches came for the announcement that Reeves will lift the two-child limit for families on benefits. As it happens, I agree with the chancellor when she said, with some passion, that it is wrong to “punish children for the circumstances of their birth”. But that is not what she said last year, when she said, “If we cannot afford it, we will not do it.”

And it is not popular with the voters and taxpayers who have to pay for it, who do not see why they should foot the bill for parents who have children when they can’t afford it.

What I disagree with, though, is the failure to get to grips with the growing spending on disability benefits. Starmer and Reeves retreated from a modest attempt not to cut but merely to slow the growth of spending when Labour MPs revolted in the summer. They have now given up, and that spending will continue on its higher path.

Again, this is not what the voters want, but Starmer and Reeves have put their political survival first – and that depends on the support of Labour MPs.

Reeves tried to claim that she had been forced to take tough decisions because the OBR had downgraded its forecasts for economic growth. She said the OBR was “clear that this is not about the last 14 months; it is about the previous 14 years, the legacy of Brexit and the pandemic, and the damaging decisions by the party opposite”. See what I mean about blaming others?

What she didn’t mention was that the OBR had also revised upwards its forecast for tax revenue – an unexpected bonanza from what it calls a shift towards “tax-rich” economic activity.

Much of the need for higher taxes, therefore, came from higher spending, rather than from gloomier growth forecasts. And that higher spending is driven by the need to appease Labour MPs who might otherwise decide that Angela Rayner and a new chancellor would be a better bet for achieving the things that they really care about.

Reeves acknowledged at one point that voters would not like the Budget. Retaining some of the language from her “scene setter” speech three weeks ago about everyone having to make a contribution, she admitted that she had gone back on her words in last year’s Budget. Extending the freeze in income-tax thresholds for another three years “is a decision that will affect working people”, she said. “I said that last year and I will not pretend otherwise now. I am asking everyone to make a contribution, but I can keep that contribution as low as possible.”

In other words, it is an income-tax rise, in breach of the manifesto, but it is done in a stealthy way in a few years’ time. She tried to claim after the Budget that, yes she was asking “ordinary people to pay a little bit more”, but the manifesto promise applied only to rates of income tax, not thresholds.

She may be hoping to buy off angry voters by freezing fuel duty and slipping them a £150-a-year bung off their gas and electricity bills, but that looks awfully like taking with one hand and giving with the other.

I do not believe that swing voters in work are going to be impressed by a Budget – a second tax-raising Budget – that puts up taxes to pay for people on benefits. Starmer and Reeves might cling to office for longer than they might have done otherwise, but it won’t do the country any good.