Rachel Reeves 'to ditch Labour manifesto by hiking one of the big 3 taxes in £30bn raid'

Reeves entered the Treasury promising to make tough decisions. She's no longer in a position to do that.

She began with the symbolic gesture of axing the winter fuel payment for 10 million pensioners, triggering an almighty backlash.

The Chancellor sank her reputation and only saved £1.5billion in the process. Probably less, as many affected rushed to claim other benefits such as pension credit.

In her Spring Statement, she had another shot at appearing tough, this time by targeting the spiralling bill for disability benefits.

Reeves hoped to save £5billion. In practice, she'll claw back £3.5 billion at most. And even that's looking unlikely.

The proposal sparked a Labour Party civil war, with Deputy PM Angela Rayner insisting Reeves drop the cuts and hike taxes instead.

Reeves lost that battle.

Now Labour is rowing back on the winter fuel payment decision, and it will probably abandon the disability cuts as well. That means even less is saved.

Starmer has also signalled he may review the two-child benefit cap, following a sharp rise in child poverty.

Scrapping that would cost a further £3.5 billion over this Parliament.

The fight has gone out of Reeves. As I wrote last week, .

Reeves was happy enough to bludgeon taxpayers in last year's Budget, but now she's under constant fire from her own party.

She responding by embarking on an old-style 1970s Labour spending spree, funding a fresh wave of public sector pay increases.

Many workers received bumper rises last year. They will now get inflation-busting uplifts again.

Reeves just waved them through. But somebody has to foot the bill, and it will arrive in her Autumn Budget.

Economists reckon she'll need up to £30billion in extra tax to balance the books. If correct, that's only £10billion less than the record £40billion she hit us with last year.

Stephen Millard, acting director at the National Institute of Economic and Social Research, has sounded the alarm.

He warned the pressure is so intense that Labour will have to break its core manifesto pledge not to raise income tax, National Insurance or VAT, according to The Daily Telegraph.

"It is pretty much inevitable now that she will have to raise one of those big taxes," Millard said.

There will be uproar if she does.

Starmer and Reeves were clear during the campaign. The big three taxes would not rise. If they break that promise, .

But that's unlikely to deter them. They're used to it.

Those three taxes are the only ones capable of raising the vast sums Labour now needs to sustain its current spending path.

The Spring Statement left Reeves with just £9.9billion of fiscal headroom. Donald Trump's trade war has since wiped out half of it.

The economy grew by 0.7% in the first three months of the year, but that momentum is expected to reverse.

Growth could stall altogether. Especially if Reeves lines up another tax raid, draining yet more life from the economy.

The Chancellor has dug herself a hole. She needs taxpayers to pull her out. And they will, whether they like it or not.