Labour MPs fear wipe out at next local election - as chancellor's career is 'toast'

Many Labour MPs have been left shellshocked after the chaotic political self-sabotage of the past week.

Bafflement, anger, disappointment, and sheer frustration are all on relatively open display at the circular firing squad which seems to have surrounded the prime minister. The botched effort to flush out backroom plotters and force Wes Streeting to declare his loyalty ahead of the budget has instead led even previously loyal Starmerites to predict the PM could be forced out of office before the local elections in May.

"We have so many councillors coming up for election across the country," one says, "and at the moment it looks like they're going to be wiped out. That's our base - we just can't afford to lose them.

I like Keir [Starmer] but there's only a limited window left to turn things around. There's a real question of urgency." Another criticised a "boys club" at No 10 who they claimed have "undermined" the prime minister and "forgotten they're meant to be serving the British people." There's clearly widespread muttering about what to do next - and even a degree of enviousness at the lack of a regicidal 1922 committee mechanism, as enjoyed by the Tories.

"Leadership speculation is destabilising," one said. "But there's really no obvious strategy.

Andy Burnham isn't even an MP. You'd need a stalking horse candidate and we don't have one.

There's no 1922. It's very messy." Others are gunning for the chancellor after months of careful pitch-rolling for manifesto-breaching tax rises in the budget were ripped up overnight.

"Her career is toast," one told me. "Rachel has just lost all credibility.

She screwed up on the manifesto. She screwed up on the last two fiscal events, costing the party huge amounts of support and leaving the economy stagnating.

"Having now walked everyone up the mountain of tax rises and made us vote to support them on the opposition day debate two days ago, she's now worried her job is at risk and has bottled it. "Talk to any major business or investor and they are holding off investing in the UK until it is clear what the UK's tax policy is going to be, putting us in a situation where the chancellor is going to have to go through this all over again in six months - which just means no real economic growth for another six months." Read more:Starmer and Reeves ditch plans to raise income taxFormer chancellor Osborne is shock contender to head HSBC After less than 18 months in office, the government is stuck in a political morass largely of its own making.

Treasury sources have belatedly argued that the chancellor's pre-budget change of heart on income tax is down to better-than-expected economic forecasts from the Office for Budget Responsibility. That should be a cause of celebration.

The question is whether she and the PM are now too damaged to make that case to the country - and rescue their benighted prospects..