𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

It’s not the type of gift the PM will be happy to receive. When he unwraps it, he’ll discover a ticking time bomb, primed to explode at the worst possible moment. It could wreck his plans to lift the national mood and secure himself 10 years in power. It might even tempt him to call a snap election next spring. It’s the only way to reset the clock on that bomb.

Reeves surpassed herself with this. Because incredibly, her timebomb was originally primed to blow up in her own face. Now she’s gone, Burnham will feel its full force. Wise politicians know that if you have to cut spending, do it right after winning an election. With luck, voters will have forgotten by the next one. That’s when you go on a spree spending. To ramp up the feelgood factor before going to the polls.

Any chancellor worth their salt gets this. So naturally, Rachel Reeves did the opposite. Instead, she unleashed a reckless spending spree straight after the election, throwing money at public sector pay, the rail unions, the NHS and welfare. Anything to please the party’s left-wing backbenchers and trade union paymasters. Spending is always the easy bit for a Labour chancellor. She left the hard bit for later.

Under her insane plan, Reeves was going to spend the final two years of the parliamentary term tightening the screw. I can only assume she thought that, thanks to her genius, the economy would be rattling along by then. Instead, her tax onslaught has destroyed growth.

Now she’s gone. Andy Burnham is in Number 10 and John Healey has her old job. Unfortunately, he’s also inherited her fiscal timetable. And it’s the timetable from hell.

Sadly for him, Reeves has already spent the cash. So what can Healey do? Given our dire fiscal position, with net debt approaching £3trillion and borrowing costs rising, he’d be mad to borrow more money (although he’ll probably try).

Hiking taxes again is another option. But Burnham has pledged not to increase income tax, National Insurance or VAT, all Labour manifesto commitments. That leaves the nightmare option. To cut spending. That should be easy, as the UK spends £1billion a day on welfare. Not for a Labour chancellor.

A wave of spending and benefit cuts would tear the party to pieces, right before the 2029 election. The left will be screaming ‘austerity’, and Burnham’s feelgood factor will turn to dust.