On Saturday, Keir Starmer and his government had a difficult 100 days in office. Far-right riots, rows among top officials at No 10, anger at freebies in an administration that claims to be in the service of the nation. Starmer now refers to them as “active days,” and he insists the latter two are “sidewinds.”
For cabinet ministers in big-spending sectors, another frustration has mounted since they celebrated a landslide victory on July 4. I am waiting for the budget. New governments – Labor in 1997, and the Tory/Lib Dem coalition in 2010 – tend to run their first budgets in double-quick to set direction and establish a clear objective.
The Labor government's first budget won't happen until October 30, nearly four months after it came to power. Under the Fiscal Transparency System, Liz Truss, Labor decided to restore confidence after office. Responsible time should be given to look at budget figures, make forecasts and check everything. All the while ambitious members of the cabinet are tearing their hair out.
They say Reeves locked himself in the vault, agonizing over what to do. “We can't go anywhere near her,” said a cabinet colleague. “We can't get past Darren,” they said, referring to Chief Secretary to the Treasury Darren Jones, Reeves' number two and effective gatekeeper.
In the face of mounting turmoil and, some would say, a lack of a clear sense of direction, cabinet ministers are making announcements or at least floating ideas. But that's unlikely, without knowing whether that money will be paid for in the budget or next spring's spending review. “We are all very restricted. It has become a problem,” said one.
As Reeves sets out to deliver the first budget by a female president in this country's history, it will be a momentous moment in other ways.
No new inductee could have faced so many competitive challenges. One – specifically the £22bn black hole in the public finances she inherited – can be blamed on exactly 14 years of Tory government. Others, more strategic and tactical, are of Labour's own creation. They boxed themselves in.
Before the election, Labor promised voters it would be fiscally responsible, adhering to strict financial rules on both spending and future investment.
The party promised not to raise taxes on working people, so ruled out any increase in their income tax, VAT or National Insurance. It boldly promised to spur new growth and create the fastest-growing economy in the G7.
The promises did not end there. The election starmer has repeatedly said there will be no return to Tory austerity and no broad-based cuts to public services.
We now have just 17 days to fix growth and public services without raising taxes on working people.
A former Tory cabinet minister said: “They've said they're not going back to austerity and they're going to rebuild services without raising taxes on working people, but they've got to find the money from somewhere.
“We are talking huge sums. The Institute for Financial Research says a £25 billion tax hike is needed. But if they are going to achieve it and stick to their promises, all exams will be very difficult.
“They have made life very difficult because they have refused to increase income tax, VAT or national insurance for working people. Between them it accounts for 75% of the total revenue.
He added: “They were confusing before the election that it would all come from economic growth, but it's not really sustainable because you can never count on growth.”
So with the government's credibility, where will Reeves go to raise the money?
To begin with, he is widely expected to change financial rules to allow more long-term borrowing for investment. Some believe this will worry financial markets as long as this borrowing is strictly limited.
The expectation in Whitehall is that Reeves will move to raise billions by raising employers' National Insurance contributions after Starmer refused to rule this out at Prime Minister's Questions on Wednesday.
Challenged by Rishi Sunak, Starmer pushed back: “We've made an absolute commitment not to raise taxes on working people,” he said, not saying whether Reeves could punch employers instead.
It is also believed the Treasury is looking at raising billions more by increasing NI on employers' pension contributions, in what a Whitehall source said would be a “double whammy for businesses”. At the same time it is expected to raise the main rates of capital gains tax by a few percentage points. Finally, the Treasury could try to raise some extra revenue by increasing inheritance tax, and ending the practice of passing pension pots down the generations tax-free.
None of this seems particularly coherent as the government prepares to host an investment summit for world business leaders in London on Monday, another government source added: “The problem is that we are ready to do business in the time we are in. Trying to grow. The real effect of hitting businesses with a rise in NI will be on working people. As a result, they will receive a small pay rise. The other shakeup would be job losses.
A former Treasury insider said the administration was struggling not only with the mess left by the Tories, but also with their own lack of planning. “My sense is that they didn't really have a plan to come into government because they thought it would be better to do it with the help of civil servants once they came to power.
“In 1997 and 2010, the projects improved a lot. This is a lot of catching-up to do. They require a reset and reboot, a complete change of gear. The obvious time for that is the budget. But there is no easy way. You can't raise this amount without some pretty strong lineups,” said the former insider.