Rachel Reeves has capitulated to her union overlords - and this is just the beginning

The honeymoon is over. After years on the opposition benches, desperate for power, Labour finally took hold of the keys to 10 Downing Street with their landslide victory. But now, as their celebrations subside, the grim realities of taking the reins are starting to set in.

Today Labour took the once-in-a-term chance to “reveal” just how much worse things are than they originally thought. Despite the OBR books being open for all to see, the Labour take on public finances has unveiled a black hole to the tune of £20bn. And now they must find a way to plug it all without raising income tax, national insurance or VAT. Oh dear.

Rachel Reeves's speech wasn't all bad. After all, it included the promise to crack down on costly external consultants who can cost the taxpayer horrifying amounts.

A Labour civil war is brewing, however, as Reeves was forced to make Labour’s first big sacrifice this afternoon, shelving major infrastructure projects that - during the election - they said were needed for that all-important fix all of growth. MPs are already up in arms as roads and hospitals promised for their areas threaten to fall by the wayside, perhaps for good.

Despite scrapping such projects being hugely damaging - and absurdly anti-growth - I think there is a more depressing mistake by Reeves and Starmer though: their pathetic capitulation to the unions and what that now means for the UK.

Teachers and NHS workers and union bosses demanded - and have today been granted - an inflation-busting pay rise of 5.5 percent. If this foot-stamping spreads across the entire public sector it’ll mean Labour spendthrifts needing to find an extra £10bn.

Reeves has confirmed the government and the BMA trade union have struck an improved pay deal for junior doctors worth a whopping 22 percent on average over two years. The British Medical Association's junior doctors committee has reportedly agreed to put the offer to its members. It is thought this could cost the taxpayer around £1billion.

Even after his election, Starmer vowed that he would most certainly not be dancing to the tune of the unions and their commands and ultimatums. Asked if he was willing to “give the unions what they want” the Prime Minister gave a clear answer of “no” adding “we’ve been careful in what we said going into the election, and we’ll be careful what we say coming out of it.”

How quickly that post-election gumption fizzled out.

Of course they have argued that we can’t afford the disruption imposed on the country when the Conservatives were running the show, with junior doctors’ strikes galore and trains grinding to a halt. It was a nightmare. People who had been long overdue operations were forced to live in pain longer whilst rail commuters missed exams, job interviews and more.

Rather than avoiding future strike chaos, though, all Reeves and Starmer’s weakness will do is fire up unions, giving them fresh impetus and perceived authority.

It’ll lead to more chaos, not less. It comes down to simple psychology. Let’s not also forget in his first King’s Speech the Prime Minister proposed laws giving workers extra rights to push back against bosses as well as handing trade unions more powers to strike.

Happily I didn’t live through the 1970s and the terrifying accounts of what took place then, as rubbish piled up in the streets which was gleefully cheered on by Sir Keir’s once-hero Jeremy Corbyn. I just pray that Reeves’ early white flag to the unions isn’t a sign of things to come - and that winter 2024 is not one of discontent.