Why it's time for Rachel Reeves to ditch her 'very foolish promise', writes Andrew Marr

Every day, as next month’s nightmare Budget lurches closer, she gets completely contradictory and self-certain advice about what she must do.

Elderly economists, excitable think-tanks, shrill journalists and self-serving MPs are standing round the Treasury, yelling at full volume: Cut this tax. Abolish that tax. Slash this spending. Raise spending there.

To add to the cacophony, the Treasury itself likes to fly some kites – suggesting that there must be a mansion tax on properties over £2 million, or that a radical change is coming on pension lump sum withdrawals.

These things might happen. They may not. But we are being told about them now because officials want to see how the market might react if they were used.

For executives planning in companies, it’s utterly confusing and a reason to delay investment. For ordinary folk trying to protect their savings, sell homes, or make prudent financial decisions of any kind, it’s a daily frustration. Really, the best financial advice right now is the so-called serenity prayer: “grant me the serenity to accept what I cannot change, the courage to change what I can; and the wisdom to know the difference.”

We can’t change the Budget. Rachel Reeves knows that, having juggled all the conflicting advice, whatever she announces will very quickly be condemned everywhere as the worst possible, most economically damaging and politically witless choice, even by those who earlier suggested exactly the same.

But there is one huge choice we can all understand and talk about ahead of time. Along with Keir Starmer, Reeves decided to fight the general election on the promise not to raise income tax, national insurance, or VAT for working people. Given the depth of the financial hole the new government inherited last July, that has turned out to be a very foolish promise.

It has led her to raise money in other ways, which have proved particularly damaging for vocal and significant groups, whether it is farmers and inheritance, pensioners and winter fuel, or the impact of the employers’ national insurance on companies hiring.

So the big question now is whether she should scrabble around finding more “small” taxes to raise, perhaps on gambling or on the banks or on inheritance, or pensions, creating further political firestorms around her – or take a deeper breath and announce, because of the economic situation she has no choice but to break her election promise and raise (for instance) income income tax by (for instance) around 2p.

The obvious answer is that she cannot do the latter because there is nothing worse than breaking a manifesto promise. That’s how you lose trust. But the obvious answer to the obvious answer is that Labour has lost so much support and trust, already – it’s down to 17 points in a recent poll – that Reeves might as well go for bust.

A general tax rise would fall on almost all of us. Many of us would be very angry. But then, many of us are already very angry. If it really helped stabilise public services, so that we no longer felt we lived in a country where nothing worked, perhaps, in three years, it would prove politically worth it.

For what it’s worth, I think things are so dire that the chancellor should do exactly that. I know that at the heart of Government, there have been serious discussions about this dilemma – so they are thinking, or some of them are thinking, about raising income tax. With a certain sinking of the heart, this may be the fairest bad choice among many bad choices.

And there we are: another dollop of, I’m sure, deeply unwelcome advice for a chancellor drowning in the stuff. Sorry, Rachel.

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Andrew Marr is an author, journalist and presenter for LBC.

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