This is John Baxter, a conversation with my colleague, Joseph Sternberg. He's in London for the Wall Street Journal about the budget proposed by the dominant Labor Party in Parliament.

Chancellor of the Exchequer Rachel Reeves is recommending tax rises across the board, extremely threatening to the business community, to the farmers,

to everyone in Britain. And yet, Joseph Sternberg lays out the dilemma that the new Prime

Minister, Sir Kirs Starrmer, is in, and that it can't be solved without a lot of trouble.

And even then, doubtful.

Joseph Sternberg laying out the challenge.

For the United States, we should regard this as the road not taken,

raising taxes, raising and raising and raising, spending and spending.

The road not taken so far.

More of this tonight.

The pickle they're in is that they may or may not care a lot about these tax increases,

but they care an awful lot about all of the spending that they want to do.

And that's the part that is really important to the Labor Party and a lot of their

constituencies, you know, including the backbench members

who tend to be a bit on the left. So I think that now Stormer has himself backed into this

corner where he can't say no to these people in the spending, but he's also very, very fearful

of increasing the deficit any more than this budget already was going to do.

And it's going to take a couple of years, but I suspect that they are eventually going to

realize that they're going to get stuck with the deficit in the debt anyway because the

revenue is not going to be there from these tax increases.

I think that they're estimates of the revenue that they can raise are downright fanciful.