The first Labour Budget in 15 years! The first delivered by a woman in the 800 years of having a Chancellor of the Exchequer! Or something to that effect. Wednesday’s Westminster spectacle is not lacking in superlatives. And that’s before we even come to the contents of Rachel Reeves’ Red Box — record levels of spending and record levels of public sector investment but also record levels of taxation and quite a bit more borrowing.

You could be forgiven for thinking that all this had already been announced and you would be right. Since our elected representatives abandoned the age-old convention of first announcing government policy in Parliament, we have seen an exponential rise in briefings from ministers and their spin doctors. In the run-up to this Budget, Treasury leaks seemed to exceed the annual amount of sewage pumped into our rivers by the water industry.

The blatant contempt for the Commons has left Lindsay Hoyle, the usually gentle Speaker, rightly apoplectic with anger. His righteous wrath will be ignored though. So much for greater public integrity — a prominent election promise that Labour already broke in opposition when it accepted lavish gifts from donors such as Lord Alli. Freebies and leaks certainly don’t help clean up our politics.

Higher spending and higher public sector investment financed by higher taxes and higher borrowing based on new fiscal rules were not in the manifesto

Nor do election victories won on partial or plainly false premises. Higher spending and higher public sector investment financed by higher taxes and higher borrowing based on new fiscal rules were not in the manifesto or in Labour’s publicly stated plan for power. Instead, the party pledged to match Jeremy Hunt’s spending plans which the head of the Office for Budget Responsibility Richard Hughes had described as worse than “a work of fiction”. Labour also said it would not raise tax significantly besides taxing non-doms, private schools and the windfall profits of energy giants. Some called it a “conspiracy of silence”, but I prefer to think of it as a lack of strong philosophical convictions that underpin political imagination and the courage to do things differently.

Yet on debt and deficit targets, we were told again and again that Labour would stick to the rules no matter what. In an echo of Tony Blair’s mantra of being “tough on crime, tough on the causes of crime”, the opposition Labour Party went into the July election promising to be “tough on spending, tough on the causes of spending”. Now it turns out that extra expenditure and more investment are possible after all. Where the Conservatives once discovered the magic money tree, Labour has now found and opened the spending tap — except that taxpayers present and future will have to foot the bill. Debt is debt, however defined, and only growing national assets will get us out of the “doom loop” of low growth and increasing liabilities.

Borrowing from George Osborne’s playbook, the government will continue to blame the Tories for the mess we’re in, not least the £22 billion fiscal blackhole that is just the tip of the iceberg. To mix metaphors more, the Chancellor says that her new fiscal rules will be the “rock of stability” that delivers on the “promise of change”. 

… the government’s woes go far beyond unforced errors and avoidable comms messes

To be fair, “fixing the foundations”, “getting Britain building” and “making sure those who can work, do work” are messages that will resonate with working people. The irony that the governing party that bears the name Labour cannot define who working people are seems lost on the Cabinet.

Yet the government’s woes go far beyond unforced errors and avoidable comms messes. The lack of a clear narrative betrays the absence of political principles and strategic direction. Instead, we get confusion and the inability to confront contradictions at the heart of Labour’s economic agenda. To take just two examples. One is to attract foreign investors who snap up successful start-ups while also wanting to grow British businesses. At present UK plc privileges private equity and venture capital from abroad over supporting domestic enterprise with access to finance and other assistance.

Another is to meet existing commitments to curb greenhouse gas emissions by 2030 while simultaneously hoping to build a modern industrial economy. The latter requires cheap, reliable energy sources, which has to include building nuclear reactors as a priority. A wholesale conversion to renewable energy would involve a massive shift from fossil fuels to metals and thereby demand extremely energy-intensive mining which renewables cannot secure for the foreseeable future.

These tensions reveal a more fundamental problem — the lack of thinking and strategy to overcome corporate abuse of power, combined with rebuilding state capacity. Since 1997, Britain has seen a concentration of market power and ownership in more than two-thirds of economic sectors. Oligopolies are rife, not just banking behemoths and tech giants. As Dan Hitchens has argued, “It’s not obvious how you can raise working conditions without confronting exploitative firms. It will be hard to protect everyday institutions like nurseries, veterinary practices and care providers without crossing the private equity people. […] And hard, ultimately, to flourish without diverting investment and talent away from the financial sector, where fortunes and careers are made.”

To coin a phrase: Labour risks collapsing under the weight of its own inner economic contradictions. That would be tragic for trust in politics on which our increasingly fragile democracy depends. And for the country that so desperately needs a new economic model beyond centralised yet ineffective statism and the speculative, rentier economy of free-market fundamentalism. There is time to rethink but who in government has the courage to set out a realistic vision of radical economic transformation?