Rachel Reeves has many problems. She's realising that her Brexit bind may be the biggest of all | Rafael Behr

"Rachel Reeves has approached this week's budget like a reluctant swimmer inching into freezing water, trying to ease the unpleasantness by incremental exposure. The chancellor started paddling delicately around the problem of insufficient revenue at the end of the summer. First, she refused to stand by former insistence that tax rises in last year's budget would be the last. The world has changed, she said. Then, earlier this month, she took a bigger stride into the icy waves."

"There was a speech promising to do what is necessary to fund public services and keep borrowing costs down. Downing Street did not discourage speculation that this meant reneging on Labour's 2024 manifesto promise not to raise income tax. Too deep! Within 10 days the Treasury had retracted the hint. The manifesto commitment still stood after all. As any cold-water swimmer knows, this aborted plunge and shivering retreat is the worst of all techniques. Nothing prolongs the pain like indecision."

Rachel Reeves approached the budget with visible hesitancy, inching into difficult fiscal choices rather than making a decisive single move. She backtracked from earlier assurances that tax rises would be the last and then briefly hinted at stronger measures to fund services and control borrowing costs before reaffirming the manifesto pledge not to raise income tax. The chosen strategy avoids a single large tax but spreads many smaller tax increases over time. That approach distributes political cost, relies on hoped-for productivity and growth improvements, and attempts to recoup revenue from pensioner winter payments and employer national insurance.

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