To understand why Rachel Reeves stood up at 8am in Downing Street in an unprecedented news conference to foreshadow the budget, you need to understand the depth of the problems facing the chancellor.

In 22 days, she must perform the biggest U-turn it is possible for a chancellor to make.

She must hike taxes to the tune of tens of billions of pounds, having promised in the election manifesto that this would not be necessary, and reiterated this promise under a year ago after an initial £40bn of rises.

Not many inhabitants of Number 11 would stay in post if they had to make such a pivot.

But Sir Keir Starmer cannot lose her and know for sure that he also stays in place.

So Ms Reeves is battling for her credibility – and ultimately the survival of this government. The stakes are high.

Politics latest: Reeves refuses to rule out manifesto-breaking tax rises

So back to this morning. Ever since the summer, those in Westminster have known tax rises are on the way in the autumn budget. A Treasury source told me that pitch-rolling for the budget began in July – yet their issue is that to date, almost no-one had noticed.

The subject of the budget was an omerta as recently as the Labour conference a month ago – it simply wasn’t on the agenda in Liverpool.

The first public acknowledgement that she was looking at taxes was in an interview with me on Sky News three weeks ago. She has intermittently revisited the subject subsequently, but quite bluntly, the public haven’t yet noticed.

As recently as last week, people in the Treasury were acknowledging to me that the public are as yet unprepared for the tax shock expected on the scale on 26 November.

So this morning’s event was designed to be shock and awe – an 8am news conference is designed to jolt Westminster and the viewing public to attention, because inside the Treasury they are “desperate” – their words – to get the public watching.

The format allows her to look in control, like a stateswoman in Downing Street making arguments on her terms, even though these are arguments she has been forced into.

So the job of this morning was to educate the public that tax rises are coming, but also put them on notice that this could involve a breach of manifesto promises by raising one of income tax, national insurance, corporation tax or VAT – and then to try and lay the blame anywhere but at the feet of this government.

She also wants to give some hope – by giving a sense of what priorities she would protect.

So what to make of the arguments she made?

‘The impact of Tory austerity, their botched Brexit deal and the pandemic on Britain’s productivity is worse than feared’

Is it really all the Tories fault?

Ms Reeves made an argument today about how lower growth is responsible for Britain’s economic ills, and listed causes with a long tale going back many years for it. This is true, but isn’t strictly the reason for her problems at this budget.

On 26 November, she must fill a £20bn-£30bn “black hole” – that’s the extent to which she is in on course to breach her own self-imposed borrowing limits, known as fiscal rules.

Many of the components of the black hole cannot be put at the door of the Tories. Here’s why:

She must find £10bn to account for policy decisions the government has been pushed into – a failure to push through welfare reform, a U-turn on winter fuel payments, a likely rollover of fuel duty.

She is likely to have to find a further £5bn for decisions she is likely to take – scrapping of the two-child benefit cap, help for energy bills and an emergency injection for redundancy bills and strike coverage costs.

So £15bn of the black hole cannot be blamed on the Tories.

A further £2bn-£4bn for additional debt interest costs is a consequence of the higher borrowing just since the March spring statement – again not the Tories’ fault – and also wants £10bn to give herself a bigger buffer to exit the doom loop.

Ms Reeves has greater scope to argue that the productivity review has longer-term causes, but this is likely to be offset by better wage news, and there is an argument that Labour could have foreseen the productivity downgrade before the election because the Office for Budget Responsibility figures were out of line with other forecasters.

So this is a tricky case to sustain, even though the government has no choice but to make it.

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‘Protecting our NHS, reducing our national debt and improving the cost of living’

The news is grim – but this is the chancellor’s promise of what she is going to prioritise. But what does this amount to?

NHS: I understand this is not a promise of new money for waiting lists in this budget. Ms Reeves is actually making a political argument about the need to not U-turn on last year’s £22bn a year NHS investment – although the public may not hear it.

Cost of living: Partly this is an argument about investment already made in things like breakfast clubs. But with CPI inflation at 4.1%, it’s a major concern – but not one that can be tackled without government spending many billions. There will be some help for energy bills, but not the tens of billions that Liz Truss put towards such schemes. So this risks disappointment.

Reducing debt: It is not about to go down. Her fiscal rules mean she is going to be reducing debt as a percentage of GDP – and even then, only debt on some things, as the fiscal rules spell out some exemptions. So the actual amount we borrow from the markets will continue to grow.

Does it work?

Today is about saying with a louder megaphone things we already knew. She declined to say whether ultimately she will break the manifesto, or what will happen.

She has, however, candidly started a conversation that needed to begin.

An 11-year-old boy who died after being hit by a train at a level crossing was probably looking at a video on his phone at the time of the accident, investigators have said.

Jaiden Shehata was walking to school when he was fatally struck at the Bourneview footpath crossing near Kenley, south London, in January, the Rail Accident Investigation Branch (RAIB) said.

Jaiden, who was a pupil at the nearby Riddlesdown Collegiate secondary school, was hit by a Southern train travelling at about 50mph.

The train driver sounded the horn and applied the emergency brake when he saw the boy start to cross the railway but, though he looked up, he did not have time to move clear before the train reached the crossing.

Jaiden, who had used the crossing regularly since starting at Riddlesdown Collegiate the previous September, suffered fatal injuries after being hit by the train, which stopped about 200m further along the line.

The child did not realise the danger he was in, probably because he was “distracted” by his phone, the board concluded.

CCTV showed Jaiden’s coat hood was pulled over his head and, as he walked towards the crossing, he was looking ahead and down at a “glowing object,” almost certain to be the illuminated screen of a phone in his hands.

Analysis of the device suggested a video clip was playing at the time.

The site does not have warning lights or barriers, which the RAIB said is “in common with many footpath crossings”.

Six near misses

Users are expected to stop, look and listen for approaching trains, and “make their own decision about whether or not it is safe to cross”, investigators said.

There were six near misses at the crossing between November 2018 and February 2023, according to a Network Rail risk assessment in May 2023.

A single fatality in March 2020 was thought to be a deliberate act.

Giving rail safety lessons to schoolchildren and making dangerous areas at level crossings more noticeable, particularly to people who may be distracted, were among the recommendations in the RAIB’s report.

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It also suggested different ways of lowering the risk were needed for younger users.

A Rail Safety and Standards Board (RSSB) spokesperson said: “Ensuring safety at level crossings remains a key priority for RSSB and the rail industry, and we will be working collaboratively to consider and implement the RAIB’s recommendations.”

Lucy McAuliffe, Sussex route director for Network Rail, said the crossing was temporarily closed in August and miniature stop lights will be installed next month.

These will “improve safety by providing a clear signal and warning sound to let people know when it is safe to cross,” she said.

Rachel Reeves has refused to rule out breaking her manifesto pledge not to raise certain taxes, as she lays the groundwork ahead of the budget later this month.

Asked directly by our political editor Beth Rigby if she stands by her promises not to raise income tax, national insurance or VAT, the chancellor declined to do so.

She told Rigby: “Your viewers can see the challenges that we face, the challenges that are on [sic] a global nature. And they can also see the challenges in the long-term performance of our economy.”

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She went on: “As chancellor, I have to face the world as it is, not the world as I want it to be. And when challenges come our way, the only question is how to respond to them, not whether to respond or not.

“As I respond at the budget on 26 November, my focus will be on getting NHS waiting lists down, getting the cost of living down and also getting the national debt down.”

‘Each of us must do our bit’

Ms Reeves’s comments to Rigby came after a highly unusual pre-budget speech in Downing Street in which she set out the scale of the international and domestic “challenges” facing the government.

She also hinted at tax rises, saying: “If we are to build the future of Britain together, each of us must do our bit for the security of our country and the brightness of its future.”

Despite her promise that last year’s budget – which was the biggest tax-raising fiscal event since 1993 – was a “once in a parliament event,” the chancellor said that in the past year, “the world has thrown even more challenges our way,” pointing to “the continual threat of tariffs” from the United States, inflation that has been “too slow to come down,” “volatile” supply chains leading to higher prices, and the high cost of government borrowing.

She also put the blame squarely on previous Tory governments, accusing them of “years of economic mismanagement” that has “limited our country’s potential,” and said past administrations prioritised “political convenience” over “economic imperative”.

Ms Reeves painted a picture of devastation following the years of austerity in the wake of the financial crisis, “instability and indecision” after that, and then the consequences of what she called “a rushed and ill-conceived Brexit”.

“This isn’t about re-litigating old choices – it’s about being honest with the people, about the consequences that those choices have had,” she said.

‘I don’t expect anyone to be satisfied with growth so far’

The chancellor defended her personal record in office so far, saying interest rates and NHS waiting lists have fallen, while investment in the UK is rising, and added: “Our growth was the fastest in the G7 in the first half of this year. I don’t expect anyone to be satisfied with growth of 1%. I am not, and I know that there is more to do.”

Amid that backdrop, Ms Reeves set out her three priorities for the budget: “Protecting our NHS, reducing our national debt, and improving the cost of living.”

Cutting inflation will also be a key aim in her announcements later this month, and “creating the conditions that [see] interest rate cuts to support economic growth and improve the cost of living”.

She rejected calls from some Labour MPs to relax her fiscal rules, reiterating that they are “ironclad,” and arguing that the national debt – which stands at £2.6trn, or 94% of GDP – must come down in order to reduce the cost of government borrowing and spend less public money on interest payments to invest in “the public services essential to both a decent society and a strong economy”.

She also put them on notice that cuts to welfare remain on the government’s agenda, despite its humiliating U-turn on cuts to personal independence payments for disabled people earlier this year, saying: “There is nothing progressive about refusing to reform a system that is leaving one in eight young people out of education or employment.”

And the chancellor had a few words for her political opponents, saying the Tories’ plan for £47bn in cuts would have “devastating consequences for our public services,” and mocked the Reform UK leadership of Kent County Council for exploring local tax rises instead of cuts, as promised.

Concluding her speech, Ms Reeves vowed not to “repeat those mistakes” of the past by backtracking on investments, and said: “We were elected to break with the cycle of decline, and this government is determined to see that through.”

‘Reeves made all the wrong choices’

In response to her speech, Conservative shadow chancellor Sir Mel Stride wrote on X that “all she’s done is confirm the fears of households and businesses – that tax rises are coming”.

He wrote: “The chancellor claims she fixed the public finances last year. If that was true, she would not be rolling the pitch for more tax rises and broken promises. The reality is, she fiddled the fiscal rules so she could borrow hundreds of billions more.

“Every time the numbers don’t add up, Reeves blames someone else. But this is about choices – and she made all the wrong ones. If Rachel Reeves had the backbone to get control of government spending – including the welfare bill – she wouldn’t need to raise taxes.”

He called for her to resign if she raises taxes.