The New Statesman.

After weeks of preparing to break their manifesto pledge, Starma and Reeves have ditched their plans to raise income tax.

It seems two factors are at play. First, the eradication of whatever political capital the Labour government had left at the start of the week, with the strange briefing war that erupted.

Second, an improved fiscal outlook. But how will Reeves plug the remaining £30 billion gap in public finances if she doesn't raise income tax? It's all feeling a little like the convulsions of a fatally wounded animal. I'm Olly Doug Moore. This is the New Statesman podcast. Joining me today's political editor, Alvarez and sketchwriter Will Dunn. Hi, both. Hello. It's a pleasure to break bread with you both for the first time.

I know.

Many more meals to be had together, I hope.

Secondly, I mean, actually Alva, yeah, can you give us the political and narrative context to this story today?

Well, today, yesterday and the FT, of course, reporting that Reid isn't going to pursue this income tax rise. What's happened? How have we got here? So, Ollie, I'm going to take

you back to before the election. Way back when? Way back when a happier time for the Labour Party

in many ways. When they were riding... Unburdened by responsibility. When they were riding high in the polls, but planning for a general election, I understand

that Labour officials went to Rachel Reeves while they were coming up with the manifesto,

and they said, look, I think we're really at risk of boxing ourselves in for government

if we rule out

increasing taxes on working people. And my understanding is that she replied, that would be a

nice problem to have. Because I think a thing you have to really understand what the Labour Party is

that they're very used to losing. And, you know, they have they they have sort of snatched defeat from the Joel's victory many times before.

You know, Labor's tax bombshell.

They have been really bitten by this.

There is a public perception that labor will increase your taxes.

And they wanted to make sure they had economic credibility.

They couldn't be hit on that by the Tories.

So they went into the election campaign wanting to make sure that tax increases were

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