Labour dissent over Reeves and Starmer refusal to attack tax cuts for rich

·3 min read
Rachel Reeves and Sir Keir Starmer
Rachel Reeves and Sir Keir Starmer

Sir Keir Starmer and Rachel Reeves are facing dissent from within the Labour Party over their refusal to attack tax cuts for the rich.

The party voted against April’s rise in National Insurance and Ms Reeves, the shadow chancellor, did not criticise Kwasi Kwarteng, the Chancellor, for reversing it on Friday.

Instead, she largely focused her ire on changes to stamp duty as she faced calls from the Left of her party for “fresh thinking” about how wealth is taxed.

Ms Reeves did not explicitly mention the decision to scrap the 45p additional rate of income tax, merely observing that there was nothing new about many of the other measures in the mini-Budget.

She said the policies announced by Mr Kwarteng served to “keep corporation tax where it is today and take National Insurance back to where it was in March”, rather than opposing this.

“The redistribution of wealth has never been more needed as the country is pushed into further debt. We need fresh thinking about the taxation of wealth,” Rachael Maskell, the MP for York Central, told The Telegraph.

“I now really fear for the economy as the Government has taken a huge political gamble to appease their core base.”

John McDonnell, the shadow chancellor under Jeremy Corbyn, hit out at the “most socially divisive budget in a generation” and urged “total opposition” from Sir Keir and Ms Reeves to Ms Truss’s economic policy.

On Friday evening, he was also set to speak at an online event as part of the socialist Arise Festival “to discuss our response to the day’s neoliberal mini-budget”.

Meanwhile Sam Tarry, the former shadow transport minister sacked in July by Sir Keir amid his support for rail strikes, took aim at a “budget of tax cuts for the rich”, adding: “Enough is enough”.

Zarah Sultana, the co-chairman of the Socialist Campaign Group of MPs, claimed Mr Kwarteng had drawn up a “bankers’ budget” while Kate Osborne, the MP for Jarrow, attacked “tax cuts for the wealthiest”.

Diane Abbott, shadow home secretary under Mr Corbyn, retweeted a comment accusing the Government of “class war” before liking another post which supported the idea of nationalising all banks.

“All Tory chancellors end in failure, few do it in their first week in the job,” she wrote. “A falling pound will mean higher inflation for all of us, higher interest rates too on any debts... while ordinary people are struggling with the cost of living too.”

When accused by Paul Blomfield, the Labour MP for Sheffield Central, of only believing in redistribution “in the wrong direction”, Mr Kwarteng replied: “[Labour] has stood on a socialist platform four times. The British people have rejected them, and if they go back to socialism they will be rejected once again.”

Since Sir Keir became leader in April 2020, Labour has pivoted away from hard-Left economic policy in an effort to restore support from the business community.

Friday also saw the Labour Left take aim at the party leadership after the Government confirmed that trade unions would be required to put pay offers to a vote of their members.

Jon Trickett, the MP for Hemsworth, said forthcoming Tory legislation would “cripple” the power of striking unions and represented “the fight of our lives”.

“It’s vital that workers’ rights are prioritised for debate at [the] Labour Party conference,” he said. “Labour must show support for the trade union movement.”