Left-wingers have demanded the Chancellor spares the ‘working class’ after she took the highly unusual step of laying the ground for her fiscal package with a speech in Downing Street.

In a blatant softening up exercise, Ms Reeves said there was a “clear choice” between “investment and hope, or cuts and division”. Ominously signposting a broad tax assault, she warned that “we will all have to contribute” to getting the country back on track.

But rather than take responsibility for the grim situation, she offed a laundry list of excuses, including Brexit, Tory austerity, Donald Trump, Covid and the Ukraine war.

At Cabinet this morning, Keir Starmer complained that “world events” were spoiling the Government’s plans “on a daily basis”. He dismissed the idea of closing the gap through “austerity”.  

Ms Reeves dodged invitations to repeat Labour’s election vow not to increase income tax, national insurance or VAT. She said she would do “what is right” rather than “popular” and prioritise “protecting our NHS, reducing our national debt and improving the cost of living”.

“Any Chancellor of any party would be standing here facing the choices that I face,” she insisted. 

The intervention was branded a “waffle bomb” by Tory leader Kemi Badenoch, who urged cuts to spending and welfare instead.

And it drew a furious response from Labour’s Left, with MPs and unions insisting that the “rich” should be made to fill the black hole in the public finances – estimated at between £20 billion and £50 billion. 

There was a nervous reaction to Ms Reeves’s speech from markets, with the FTSE 100 and the pound falling sharply – although interest rates on Government debt also eased slightly.

Standing in front of a podium with the slogan “strong foundations, secure future” and flanked by Union Jacks, Ms Reeves said there were no “easy answers”. 

She warned that markets could be even more negative about lending to the UK if they did not believe her commitment to meeting her fiscal rules.

But it is barely a year since the Chancellor claimed her first Budget – the biggest tax-raiser on record – had “wiped the slate clean”.

“I’m really clear. I’m not coming back with more borrowing or more taxes,” she told the CBI last November.