Rachel Reeves lines up ultimate Budget tax bomb - but first she must admit to lying

What Rachel Reeves does in her autumn Budget on November 26 will define her career. It may also define PM Keir Starmer's tenure, and how voters view the Labour Party for a generation. Obviously, this isn't going to be an easy decision.

At the very least, Reeves has to hit us with up £30billion worth of taxes to plug the black hole she's blown in the nation's finances. It could be as high as £41billion, according to the National Institute of Economic and Social Research.

That sum exceeds the roughly £40billion she raised in last year's Budget, a tax and spending spree that killed economic growth and sent the UK careering toward a fiscal crisis. More of the same will inflict yet more damage, but that won't stop her.

Reeves should be cutting taxes instead of hiking them, but she won't. Restive Labour backbenchers won't stomach cuts, and Starmer is too weak to face them down.

The bond market doesn't want to see more borrowing, and Reeves won't fiddled with her "iron-clad" fiscal rules.

So she must go for the tax jugular.

Tinkering won't do it. Proposed inheritance tax tweaks might only raise a billion or so. Taxes on capital gains or wealthy non-doms could cost more than they raise. Another raid on businesses will destroy yet more jobs. So what will Reeves do?

One option is to extend the freeze on income tax thresholds, currently set to run until 2028. That would raise £7 billion a year, maybe a little more.

But it still won't plug that gap.

Other ideas are being floated: curbing pension tax relief, extra levies on gambling firms and the big banks, and even council tax hikes.

But none of those will plug a hole of this magnitude. Now Starmer and Reeves are flirting with going nuclear.

Last week, Darren Jones, recently installed as the PM's chief secretary, hinted that Labour might hike one of the big three taxes - income tax, national insurance or VAT.

That won't be easy either. Given that Labour explicitly promised that it wouldn't raise them in last year's manifesto.

If they reverse course, they'll have won on a lie. The decision could doom Starmer and Reeves. Yet faced with a yawning shortfall largely of her own making, they may see no other way out.

A think tank close to Labour, the Resolution Foundation, has floated one possible get out. Cut NI by 2p then tack it on to income tax.

That would drag more pensioners into the tax net while letting ministers claim the burden has not fallen on "working people." It's about as slippery as it gets.

But it still won't be enough. At most, it will raise £6billion.

By contrast, a 2p rise on the basic income tax rate for everyone might raise up to £14 billion. That's still shy of target, but it's a lot closer.

To do so would force Starmer's team to admit explicitly that they lied during the election. Voters already feel cheated. A naked confession would be brutal.

Yet Reeves may have no choice and will have to drop the ultimate tax bomb. But first, she has to admit she lied to us. And so will her boss. And there's no way back from that.