Tomorrow could be Rachel Reeves’s last chance to rescue the country from job-destroying despair. The Chancellor’s Spring Statement is about much more than making tweaks to the Treasury spreadsheet. She needs to convince families and businesses this country is not crashing into a chapter of turmoil. The share of the public who believe Britain is heading in the wrong direction has surged from 43% before Christmas to nearly six out of 10, according to KPMG.
A downgrade in growth forecasts today by the Office of Budget Responsibility will confirm what millions of people feel in their bones – Britain is in trouble. They know things could get much worse if the diplomatic scramble to persuade President Trump to spare the UK the worst of his tariff plans fails. But the Chancellor herself has dismayed the managers of care home, charities and businesses with her shock rise in employers’ National Insurance contributions. Right at the moment when she needs to get the UK growing to rescue the national finances, she has hit the country with a tax on jobs.
Families are straining after yet another year of huge council tax increases. The freeze in the point at which you begin paying income tax means more and more pensioners are forced to pay the tax.
Labour MPs can see how serious the situation is. They did not stand for election to strip retirees of their winter fuel allowance, slash foreign aid or raid the benefits budget for savings.
Survation polling of self-declared Labour members shows Ms Reeves is the least popular member of the cabinet. Alongside Work and Pensions Secretary Liz Kendall, she is one of two cabinet members whose favourability ratings are in negative territory.
The gloom will deepen when the full scale of the cuts is revealed. The challenge of fixing the crises in the courts and prison systems will get even tougher if they have to do more with less.
Ms Reeves can expect cries of protest and demands she should change the fiscal rules which govern her decision-making. On the Left, there are calls for a wealth tax – but there is also real worry that the gargantuan cost of servicing the state’s debt will get worse if the markets think she cannot balance the nation’s books.
Tomorrow, if she looks like a Chancellor who is failing to manage decline then families and businesses will prepare for the worst, stop spending and the country will tip towards recession. She needs to give entrepreneurs and households credible cause to hope a more prosperous future is within reach.
Britons are yearning for prosperity and tired of stagnation. People want to work hard and improve their lives.
The Chancellor must not deny them that chance.
