Rachel Reeves achieves what no other Chancellor has - but she won't want to hear it

Has any Budget ever fallen apart so spectacularly before it has even been delivered? It is another 12 days before is due formally to announce the bad news to millions of earners, savers and investors. But already we have been led to expect £35billion worth of tax rises - more than in any Budget in history.

From pensions to properties to - it seems as if few possibilities to sting us for extra cash remain unexplored. There was a time when Chancellors put themselves 'in purdah' before Budget day in order not to give away market-sensitive information, but no longer. It is as if we are all sitting in Reeves' study as she crumples various drafts of her speech and scribbles out ideas for even more dramatic tax rises.

This week's gently-leaked proposals are especially worrying - for the but also for the Government's future. If Reeves is contemplating raising employers' contributions she should first sit down and watch a video of George H Bush - the first President Bush - accepting the Republican nomination in August 1988.

"Read my lips," he famously said. "No new taxes." He received a huge cheer and went on to win the White House. Then two years later he agreed a Budget with the Senate which did, indeed, raise several taxes. From that moment his fate was sealed - when he stood for re-election in 1992 his chief opponent, Bill Clinton, wouldn't let him forget that he had broken his pledge.

Rachel Reeves doesn't have the oratorical skills to come up with such a memorable line, but Labour's manifesto is quite clear. "Labour will not increase taxes on working people," it states, "which is why we will not increase National Insurance, the basic, higher or additional rates of Income , or VAT."

Sorry, but the efforts of Reeves and her colleagues to make out that raising employers' NI contributions does not amount to a tax on working people are pathetic. They are plainly a tax on jobs.

Raising employers' contributions would be, as Paul Johnson, who leads the independent think tank the Institute of Fiscal Studies puts it, a "straightforward breach" of a manifesto promise.

Moreover, Reeves herself once accepted that raising employers' contributions would hurt working people. Two years ago, when the Conservatives were contemplating such a move, she described it as "the worst possible tax rise at the worst possible time".

Reeves has been driven to look at NI contributions because several of her original proposals have come a cropper. She wanted to restrict tax relief on pension contributions to 20 or 30 percent, as opposed to the 45 percent tax relief which high earners currently enjoy. But that was undermined when she realised it would affect higher-paid public sector workers -- and the Government doesn't want to do anything to upset them.

She also appears to be backtracking on proposals to raise capital gains tax, to bring it more in line with income tax rates. Her latest idea seems to be to raise CGT on sales of shares but not properties - for fear of stalling the housing market as sellers balk at a high tax bill.

But the Chancellor's underlying problem is that she is not prepared to countenance substantial cuts to Britain's bloated public sector. There are suggestions she is considering some cuts to benefits, but you can be sure that whatever she has in mind won't reverse the stunning rise in the number of people on out-of-work benefits - up from 3.5 million in 2018 to 5.8 million now. The rise, by the way, began two years before the pandemic.

At the same time, the Government has been merrily handing fat pay rises to public sector unions without them having to agree to any changes in working practices - without which there can be no rise in productivity.

On his first morning as Prime Minister, Keir Starmer told us that his priority was growth, growth, growth. But it is hard to square that with much of what the government has done since. Much needed road schemes have been ditched, and North Sea oil and gas licences refused. And now it looks as if we're destined for a tax hike on jobs.

This is the programme not of a government which wants to promote growth, but of one which is preoccupied with rewarding its union paymasters and with hitting net zero targets to the detriment of economic growth.

Maybe many of the tax rises that Reeves has floated will turn out to be an elaborate case of managing expectations - she wants us to fear the worst so that the Budget, when it comes, won't seem as bad as we think. But I wouldn't count on it.

Investors are already pricing in higher interest rates in response to the government's fiscal policy. Don't be surprised if markets turn out not to like Reeves' Budget much more than they liked Kwasi Kwarteng's.