The decision to water down the imposition of inheritance tax on family farms, slipped out by the Government just before Christmas, is only the latest in a string of Labour U-turns.
Since taking office last year, Sir Keir Starmer’s administration has repeatedly tried to stand firm on big promises before giving in under political pressure later on.
Axeing winter fuel payments for most pensioners, overhauling disability benefits and protecting workers against unfair dismissal from the moment they start a new job are among the decisions that have been reversed in embarrassing climbdowns.
And with the Prime Minister struggling in the polls while he deals with mutinous MPs, there could be more U-turns to come on policies to which the Government is currently committed.
No more tax hikes
After two tax-raising Budgets, Rachel Reeves has given herself enough headroom against her fiscal rules that she hopes it will not be necessary to do a third.
But she notably dd not rule out the prospect of further tax increases in an interview with The i Paper – and if she is unlucky with global economic conditions, or if her policies prove as economically damaging as her political opponents claim, then a fresh round of hikes may become inevitable.
Even if the overall tax burden is not raised at future Budgets, it is almost certain that some specific levies will go up as part of the annual tinkering that the Treasury can rarely resist.
Likelihood: 4/5
Stay out of the EU’s structures
The Government is trying to get closer to the EU, but with three “red lines”: Britain will stay out of the customs union and the single market, and there will be no return to freedom of movement.
It is the first of those pledges that is looking shakiest, with senior Cabinet ministers, including health secretary Wes Streeting this week, hinting publicly that rejoining the customs union could boost growth by removing barriers to trade with the continent.
For as long as Starmer is in No 10, he will not want to break his manifesto promises on Brexit as he is terrified that Reform UK and the Conservatives could take political advantage. But if he is replaced, there is every chance that a new prime minister could announce a change of course, especially as the Greens and Lib Dems could take pro-Europe votes off Labour.
Likelihood: 2/5
Maintain the triple lock
The triple lock on state pensions, which guarantees they will rise over time faster than either inflation or wage growth, is wildly popular with voters and all parties committed to it at the last election.
But economists have warned that it cannot last indefinitely, or pensioner incomes – funded by taxpayers – would balloon to unaffordable levels.
If Labour does decide to signal the end of the triple lock, it is likely that would come as part of a long-term plan to reform the state pension rather than being introduced immediately.
Likelihood: 2/5
New tax on electric cars
At the last Budget, Reeves announced the introduction of a pay-per-mile tax for electric vehicles to account for the fact that they do not pay fuel duty.
But crucially, this does not come in to force until 2028 – leaving plenty of time for the Treasury to cancel or water down the proposed levy, which has sparked a backlash from those who would be affected.
With many questions unanswered about how exactly it would work, it seems unlikely that the tax will ever take effect in exactly the form currently envisaged.
Likelihood: 4/5
No money for striking doctors
Key to the strike by resident doctors which reignited in the week before Christmas was a demand for an inflation-busting pay rise to make up for what the doctors’ union says has been a decade-long salary squeeze.
Wes Streeting, the Health Secretary, is adamant that pay is the one thing he will not negotiate, even as he offers better working conditions and more training places for new medics.
But if the doctors do not back down, then giving way on this point may prove to be necessary to get them back to work and give the Government a hope of meeting its promises to improve the NHS.
Likelihood: 3/5
Push further on workers’ rights
The Employment Rights Act became law this month only after the Government agreed to U-turn on a promise that workers would be able to sue for unfair dismissal no matter how long they have been in their job.
Even though it is on the statute book now, many of the details of how the law will be implemented are still up for consultation, and businesses will be pushing for further concessions in the months to come.
Any more watering down would prompt fury from Labour’s allies in the trade unions, some of whom have grown more critical this year.
Likelihood: 3/5
Keep capital spending intact
One way to fill a black hole in the public finances without putting up taxes or cutting services is to slash capital budgets- money spent on infrastructure such as buildings, tunnels and roads – a route often taken by previous administrations.
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If the fiscal situation grows truly dire, Reeves may come under increasing pressure to take this option, which feeds through to public attention much more slowly than cuts to day-to-day Government spending.
But she has put “investment” at the centre of her plan to grow the economy, so would be very reluctant to go ahead with any infrastructure cuts.
Likelihood: 1/5
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