Labour thinks it can beat the Tories over tax – but can it convince the public? | Politics News

There is one fight Keir Starmer and Rachel Reeves want to have after Wednesday’s budget – one they hope if it lands right this week they could run pretty much all the way to the next election. 

And there is another they are keen to avoid at all costs that could drag down their government and mean the second hundred days bear a greater resemblance to the first than they would like.

Nobody yet knows which will dominate – but all will be clear by the end of the week.

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The prime minister wants to turn the budget into a battle with the Tories – put it at the centre of a refreshed political campaign to reframe and double down on an attack against their main opponent.

Eviscerating the Labour opposition in 2010 helped the Tories win in 2015; now Labour wants to do the same in return.

Indeed, at the heart of the budget is an argument the prime minister and chancellor actually ducked during the election campaign: that Labour will tax a lot more and borrow a lot more to spend on public services over the course of this parliament.

Now safely in power with a three-figure majority, they believe they have the political space to make this case, and can turn it to their advantage in a way they never dared before 4 July.

Sir Keir is so keen to start this fight with the Tories he was up in Birmingham today laying down dividing lines with the opposition over the most controversial bits of the budget.

He is arguing for investment over decline (to justify more borrowing), tax rises or austerity (to lay the ground for £35bn of higher taxes) and honesty over fiscal fiction (to account for short-term pain in some parts of Whitehall).

Labour believe they can win these arguments. The Tories believe their opponents will not. We will see who is right after Wednesday.

However, there is a more toxic outcome for Labour after this budget: that the main argument that begins is not with the opposition but with itself. And surprisingly, there are those in the party and across Whitehall that worry this might be the case.

First there is the fear over broken promises. There are some Labour MPs who don’t yet believe Sir Keir and Ms Reeves will prevail in the fight to convince voters that raising employer national insurance is a manifesto breach.

But the bigger worry is the scale of unexpected nasties in the the budget causing a backlash.

Ms Reeves has told cabinet colleagues a 2% target for savings across government – meaning billions of savings – needs to be found.

Sources tell me this is likely to result in cuts people notice, though some of this might take months to come out because of the way the government budget process works.

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We saw just one example of this today: the bus fare rises unveiled that were initially opposed by the Department for Transport.

The increase of 50% from £2 to £3 is just one measure where voters – and Labour supporters – could judge a hit to working people, breaking the prime minister’s promise to protect those he claims are at the core of all he does.

But I am told there are other dangerous areas that haven’t yet emerged. And there is pain to come.

Ms Reeves and Sir Keir are at their most powerful at this budget – they will never have so much flexibility as they do today.

But will it result in the argument they want to have after Wednesday?