The one thing Labour is good at is creating uncertainty

Pensions industry. Housing market. Investors. Founders. Ordinary workers. Expanding businesses, like Bodycare. Hospitality industry, including Wetherspoon’s pubs. The Southampton boat show (who knew that was a thing…). The gambling industry. Even ITV’s Christmas ad sales. They have all been impacted by the growing uncertainty over Labour’s autumn budget and what to do with their money – and there is still 15 days of uncertainty left to go.

In the Bank of England’s quarterly monetary policy report, published last week, the damage done was made clear. Explaining poor GDP growth, it flags that it “may reflect uncertainty ahead of the upcoming autumn budget”. “Elevated uncertainty, including ahead of the autumn budget,” too, explains “subdued” investment intentions.

Until Rachel Reeves finally announces where exactly tax rises will fall on 26th November, this is likely to just continue. The Chancellor decided to hold her budget later than usual, extending this period. She also decided to, for example in an interview yesterday with the BBC’s Matt Chorley, all but admit that Labour’s manifesto commitments on tax will be broken.

Part of the problem is Starmer’s complete and total lack of any political compass.

It means that no one knows if they, or their industry, will be the next one hit – because how could they? I know we talk of kiteflying policies but in terms of their direction it feels more like Reeves has been blindfolded, spun around three times, and told to fling a dart at a dartboard. Wherever it lands then, bad luck. Duncan Robinson at The Economist had another analogy for the Labour government’s approach to different industries: the childhood game Buckaroo as sectors are laden with more tax and duties, with the pain only stopping when they kick out – then the policy is scattered once more. It has been reported that Reeves is considering more than a hundred policy options. There is no clear sense of direction.

The uncertainty could give cause for arguments, like those of The i’s political editor Hugo Gye, that a fundamental part of the problem is the budget itself. Having a set fiscal moment creates so much speculation as it contains every major tax and spending decision into one package that then fuels suspended decision making around finances. Why not just announce policies when they are ready? It might reduce the horror-fuelled anticipation and I do see some of the appeal. 

But it has worked since the 19th century, it binds tax and spend together, and not always seen the same sort of reactions as those to Reeves’ moves. For example, if you don’t want paralysed speculation and anticipation, perhaps the Chancellor shouldn’t give an unhelpful and vague speech like she did last week. The last time there was this much uncertainty around a budget was … Reeves’ budget last year. There are other ways to do this.

If Reeves does break her major manifesto pledges, what is left in the budget will be the only thing left of Labour’s economic strategy. The public won’t trust her or the party, but at least there will be some form of costed policy platform – even if it is fundamentally destructive because the Government can’t get a steady hand on the tiller. 

Something they could turn to, if they did want to get a grip of the issue, is the hugely impressive Tax Reforms for Growth report published last week. I was on my holiday when it was released and I couldn’t help but break my no-politics ban to have a look given the consensus behind it – not only leading economists but think tanks like the Adam Smith Institute and Centre for Policy Studies (alongside some left-leaning organisations) all authored and agreed the report.

This breaks down, not specific money-raising policies in that sense but a plan for tax restructure, making the economic costs of raising funds as the government minimal while promoting growth. Turning to this impressive review, including sorting out the property tax system, reforming the VAT system, tweaking income tax, and more would show that sense of direction the Labour government have been so desperately lacking. If any party were to fully embrace it, in fact, it would be a fantastic sign.

Unfortunately there is zero indication that any of this will be embraced on 26th November by Reeves.

More uncertainty is about the only thing that is certain.