Rachel Reeves is running scared - and all of her excuses prove it

Rachel Reeves is running scared of a tsunami of economic bad news coming her way. That's why the Chancellor surprised everyone by delivering her pre-budget speech yesterday three weeks before the actual budget. With the government's official economic forecaster - the Office of Budget Responsibility - downgrading UK productivity and predicting a bigger-than-expected hole in Britain's public finances, Reeves has wanted to get her explanation in quickly.

The "context" she provided is to blame everyone else but herself. Still blaming Liz Truss's three-year-old mini-budget turmoil (which the Bank of England later admitted was 60% its fault), she also adds Trump tariffs and Brexit to the reasons for the woes we face. It's apparently nothing at all to do with her growth stifling budget she delivered last year, hobbling businesses with higher taxes, regulations and net-zero inflated energy bills.

Reeves is also running scared of the economic facts we face; borrowing costs higher than the rest of the G7 and a national debt amounting to 94% of GDP - a whopping £2.5trillion that is costing one in every ten pounds of tax income to service.

With a ballooning public sector, still high inflation and a faltering economy, she knows we are not far off following the fate of France, which is teetering on the edge of an economic abyss.

In his City of London speech on Monday, Reform UK leader Nigel Farage predicted that imminent economic turmoil would trigger the collapse of the Labour government in 2027. This just got a little closer with Reeves' speech.

Again and again, the Chancellor mentioned that Labour must not choose political expediency over doing the right thing, must not choose party over nation.

But that's exactly what Keir Starmer did this summer when he backed down in the face of left-wing protests against making necessary cuts in disability benefits. Government interest rates are already at a higher rate than after Truss's much derided budget and any further U-turns on necessary cuts in public expenditures will only send them rocketing.

That's why this speech was not necessarily directed at you and me, but intended for Labour backbench MPs, giving them a reality check to stop them complaining about necessary cuts to benefits. She's also readying them for an anticipated break of their election pledge not to raise taxes on working people.

If Britain is not to follow France into economic purgatory, Reeves must cut public expenditure in a meaningful way to calm international financial markets, otherwise we'll all end up paying even more to service our national debt.

She knows also from the failure of her budget last year that she can't just tax her way of trouble because this only further drags down the very businesses she needs to generate growth and higher fiscal income. By raising taxes again on firms, she will only create a death loop strangling any hope of growth.

Taxpayer's money has already been poured into the public sector in the form of higher wages, but without a rise in productivity. In fact, despite Labour's generosity with our money, recent data shows that public sector productivity has actually fallen by 0.7% across the board and in the health service by a staggering 1.5%.

Until Rachel Reeves accepts that it is the onerous costs of public sector wages and pensions that is creating an unsustainable debt mountain, she has little hope of calming the nerves of financial markets. Add to that an unreformed benefits system that is giving away cars to people with minor ailments, you have a maelstrom of demands that can never be met by taxation as it stands.

Her panic is given greater urgency by the fact that the private sector, already hammered by her growth-numbing taxes last year, is refusing to generate more fiscal income by expanding - because newly introduced Labour regulations have made it more difficult and expensive to hire staff, especially young people.

Despite repeatedly claiming Labour are the "grown-ups", Reeves comes across as the child in trouble - pointing her finger at everyone else but herself. This week she has made the case for a budget that will continue on her disastrous path to economic oblivion.

Farage's prediction of an election in 2027 may not be far off and we can only hope for a new government that cuts the size of the State and encourages the entrepreneurs who will give us real growth.