Annabel Denham 24 August 2024 7:00am BST There was a startling moment in an interview with Darren Jones on Wednesday. Responding to official figures showing the Government had borrowed

almost £5bn more than forecast in the first four months of the financial year, the chief secretary to the Treasury said the Government will “have to consider some tax measures at the

Budget... whilst honouring that promise to the public not to increase income tax, employee National Insurance or VAT”.  Labour made no such promise. What they did offer was a cast-iron

pledge “not to increase National Insurance (NI)”, without the caveat that only the employee tax would be protected.  For weeks, they claimed “working people” would be protected by their

companies which transfer the money to HMRC means little – the burden of employers’ NI falls on staff, just as the incidence of corporation tax does, in the form of lower pay. But Jones’s

comment is also the strongest indication yet that Rachel Reeves’s October tax raid will be much broader than anyone imagined. And it would hardly be surprising. They’ve dug a black hole by

shovelling money towards public sector workers – one so vast that not even punishing savers, pensioners and property owners will be enough to fill it. They are dressing this up as a

necessity, when they are in fact making a deliberate choice to hammer the productive side of our economy in order to lavish spending on public sector workers whose output is declining at an

accelerating rate.  According to the Office for National Statistics, in the first quarter of this year, output per person in the public sector declined by 0.6pc compared to the same quarter

a year ago. Far from offering a quo for the taxpayer’s quid, some of these unions are expecting an even cushier deal for their members – the TSSA (beneficiary of a recent 14pc pay increase)

now wants a 35-hour week and 38 days’ annual leave. That big payoffs are failing to dampen the recent explosion of trade union militancy is hardly a surprise. But not only will activists aim

to outstrip inflation permanently, but they will push for the sorts of enhanced worker entitlements seen on the continent, ignoring that our deregulated labour market is one of this

country’s few remaining comparative advantages.  Remember when BBC presenters were forced to work limited hours during the Paris Olympics, in order to adhere to French employment laws? Here

in Britain, Angela Rayner is itching to legislate for a “right to disconnect”, making it unlawful for employers to contact staff outside of working hours.  France is the only EU country that

limits the working week to 35 hours, with caveats – here in Britain, demands for a four-day week with no loss of pay are loudening. Some 90pc of French employers offer a hybrid model of

working, but the UK is catching up, at 77pc.  Then there is the productivity data. A Banque de France study recently reported labour output in France has fallen by 8.5pc since 2019, yet it

still remains around a sixth higher than in the UK. But unemployment is also higher in France – 7.4pc to our 4.2pc – for the simple reason that French bosses don’t want to hire sluggish

staff, especially when it’s so difficult to fire them. In Britain, the Government is proposing that the right not to be unfairly dismissed apply to all employees on day one; currently they

have to wait two years. This is the fate that awaits us. French-style labour protections combined with Soviet-style productivity, an impossibly bloated public sector riddled with

inefficiencies funded by an increasingly squeezed taxpayer. We might not go bankrupt, but we could become France.