It’s time for Rachel Reeves to stop gambling

Next Wednesday Rachel Reeves will stand up in the House of Commons to deliver what she is calling her ‘spring forecast’. As so often with political language, everyone in Westminster knows it is no such thing, just as there was nothing ‘mini’ about Kwasi Kwarteng’s Budget of September 2022. The ‘spring forecast’ will be an emergency Budget, and the reasons for it reveal a surprising truth about the Chancellor of the Exchequer: she is an inveterate gambler.

Unless everything turns out to be a brilliant exercise in expectation management, the worst-kept secret in Whitehall is that Reeves has already broken her ‘iron-clad’ fiscal rules. The Chancellor’s team will receive the Office for Budget Responsibility’s final forecasts, but the damage has already been done by negligible growth, rising interest rates and higher than expected borrowing. As a result, there has been a rushed attempt in the Treasury to cobble together savings from the welfare budget and cuts to departmental spending to make the sums add up.

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For the Chancellor to be forced to come back and change spending plans within six months of a ‘once in a parliament’ Budget – and in the middle of a spending review – is unprecedented and, frankly, embarrassing. The Treasury spin operation has tried to disguise this embarrassment by claiming that the world has changed: defence is the new priority, and welfare savings were always planned. But nobody is falling for it.

The truth is that, just as with her first troubled Budget in October, Reeves’s own rash decisions have come back to bite her. In that Budget she increased taxes by £40 billion a year and added £30 billion to annual borrowing, yet left only £10 billion in headroom.