The quandary: Break tax pledges or cast Labour adrift from its principles

The ferocious backlash against the £5bn in welfare cuts crafted to balance the books in this Wednesday's spring statement highlighted an increasingly glaring conflict between Labour's pre-election tax pledges and the party's wider purpose.

- Heather Stewart

Since Rachel Reeves promised last autumn to deliver a single, annual budget, she has been confronted with rising debt interest costs, weaker than expected economic growth and the near-collapse of the transatlantic alliance. "The world has changed," as every Treasury press release now has it.

When she delivers her spring statement this week the chancellor will eschew tax rises and instead squeeze future spending plans, to ensure the forecasts show her fiscal targets being met, five years from now. This package will include the welfare cuts already announced, but the Treasury is also expected to seek another £5bn in savings elsewhere.

The political logic is impeccable, and well rehearsed. Labour made sweeping tax pledges in the run-up to last year's general election, so is adamant it cannot touch broad-based taxes such as income tax.

Reeves already rewrote the fiscal rules significantly at her autumn budget, allowing for more borrowing to fund capital investment, and she whacked up taxes by £40bn, the biggest package of increases since 1993.

And there is an economic logic too, born of genuine fear in the Treasury that bond markets could take fright - causing a Liz Truss style crisis - if Reeves tears up the framework she set herself just six months ago. Hence the pressing urgency of identifying £5bn of welfare cuts. Hence, lest we forget, the slashing of the UK's already denuded aid budget, to pay for increased defence spending.