‘It didn’t have to be like this.’ No phrase better captures the tragedy of Labour’s ruinous stewardship of our economy.

Two growth-destroying Budgets and multiple U-turns by the Chancellor Rachel Reeves have sapped confidence and crippled investment – the keys to future growth.

From flip-flopping on inheritance tax (IHT) for farms and small businesses to scrapping winter fuel payments for pensioners and cutting welfare for disabled people, drift and ennui have epitomised this lacklustre administration.

Of these policy disasters, the most recent and in some ways the worst was the cynically timed announcement on Christmas Eve that the Government will now abandon its punitive stance on IHT for farms and private businesses, which had been imposed in the Chancellor’s first Budget in October 2024.

The threshold at which the levy will apply will now more than double to £2.5million – a concession that will benefit not only rural communities but also small family businesses and entrepreneurs. Yes, many will welcome the change – but it was nevertheless a huge and unexpected adjustment that speaks of chaos in the governing regime.

Worse, the U-turn was not announced by Reeves or her boss, the PM, but instead the hapless Environment Secretary Emma Reynolds – not exactly an authority on public finances – was dispatched to deliver the glad economic tidings.

How did the Government get itself into such a mess in the first place? Ours may be a predominantly urban society – and Labour a largely metropolitan party – but rural life is a part of our cultural fabric. Taking on the Archers, Countryfile and Emmerdale classes was madness, and that was before the Government’s more recent announcement that it plans to ban trail hunting, a measure few were crying out for.

Having written about Britain’s public finances for more than five decades, and seen more than my fair share of Chancellors come and go, I am shocked at little. But I find the sheer incompetence emanating from both 10 and 11 Downing Street scarcely believable. As the months have gone by, what has struck me more than anything is how naïve our Chancellor and Prime Minister have been on one measure after another.

Take their bungling failure to anticipate the damage that hiking employers’ National Insurance contributions in last year’s Budget would do to business investment and confidence. That £25billion levy, which came into force this April, represents the biggest head-on blow to growth imposed by any Chancellor in modern times – and, as any A-level economics student could have told them, it has had a devastating effect on jobs, especially in the young.

Two growth-destroying budgets and multiple U-turns by the Chancellor Rachel Reeves have sapped confidence and crippled investment, writes Alex Brummer