PopCon Director, Mark Littlewood, writes about next week's Budget. "Brace yourself. Wednesday is going to be grim." 

Brace yourself. Wednesday is going to be grim. Having pledged last year that she had fixed the public finances and wouldn’t need to return to tax us even more, Rachel Reeves is about to do just that.

The run up to the budget has been a fiasco. Strict protocol dictates that the details of the budget are not supposed to be in the public domain until the Chancellor gets to her feet at the despatch box. This supposed rule also provides helpful cover for government ministers who can answer virtually any question from the media with, “Well, you can’t possibly expect me to speculate on the contents of the budget at this stage.”

Of course, in practice, the tax policies being considered tend to leak out in advance - either by accident or design. The government sometimes believes it to be advantageous to “fly some kites” and see what the reaction might be. If heads nod in response to an idea this might encourage them to pursue it. If there are frowns - or worse still cries of despair - the government can retreat without it being a fully public U-turn.

It’s fair to say that virtually every idea Rachel Reeves has floated so far has been about as welcome as a fart in a spacesuit.

The greatest fiasco was her absurd attempt to “roll the pitch” to prepare people for a breaking of Labour’s manifesto promise not to raise income tax. She didn’t say that she was going to raise income tax. But because she was supposedly “rolling the pitch” for such rises, the media duly reported this as her intention.

The reaction was pretty disastrous - especially as it combined to form a toxic brew with speculation that the prime minister could face a leadership challenge. Although Keir Starmer is already holed below the water line, such an explicit breach of a public promise would have been the coup de grace. The income tax hike now appears to have been shelved and Rachel Reeves is going to seek to plug her black hole by taxing milkshakes instead. Brilliant.

You can tell from the Chancellor’s facial expressions and demeanour that she knows she is caught on the horns of an insoluble dilemma.

State spending is way too high and is on a trajectory to rise. But her own MPs will not allow her to make any meaningful reductions. Efforts to simply stem the rise in welfare benefits by a smidgen had to be wholly abandoned. Incontinence is therefore going to continue.

The public debt is spiralling to absurd levels and Reeves’ only hope is to keep it under some sort of control - there’s no prayer of meaningfully reducing it. Because she can’t get any spending cuts adopted her efforts on deficit reduction are akin to putting clingfilm over the mouth of a volcano.

She is left with only one lever to pull - jack up taxes - but is straitjacketed in two ways. First, trust in Labour is so low that any further breaches of pledges would be fatal. Second, growth and productivity are on the floor and tax hikes will cement our future as a near zero-growth economy.

To add to all these woes, the Chancellor is beholden to numbers on a quango’s spreadsheet. The OBR’s forecasts are about as useful as reading tarot cards. But Reeves promised to obey these hapless stargazers in order to try and build a reputation for fiscal discipline and there’s no going back now. The consequence is that a tiny tweak in the way the OBR chooses to guess at future economic output can derail the Treasury’s efforts to get somewhere close to adding up the numbers.

Reeves is trying to hit the bullseye on a dartboard which is consistently moving whilst also being blindfolded, drunk and having both hands tied behind her back. Her chances of hitting it are, well, slim.

All of this means, I’m afraid, that whilst things are currently bad, they are probably going to get even worse.

The beatings will continue until morale improves.

Keep the flag of freedom flying!