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New Statesman
14-07-2025
- Business
- New Statesman
What game is Labour playing on a wealth tax?
Photo byBack in March, Rachel Reeves made a telling intervention at Prime Minister's Questions. As Richard Burgon, the Corbynite MP for Leeds East, demanded a wealth tax in place of disability benefit cuts, Reeves shook her head with the vigour of someone who plainly regarded this as a terrible idea. Yet four months later, the air is thick with talk of Labour adopting just such a measure. After Neil Kinnock proposed a tax of 2 per cent on assets worth more than £10m, No 10 and No 11 had the chance to rule this option out – and refused to do so. Heidi Alexander, the Transport Secretary, would only say yesterday that the tax was not discussed 'directly' at the cabinet's Chequers away day. What's changed? For one thing, tax will have to be much more central to Reeves' next Budget than she ever wanted. Last November she told the Confederation of British Industry's conference that 'public services now need to live within their means' and that 'I'm not coming back with more borrowing or more taxes'. You won't hear the Chancellor, who could face a £20bn-£40bn black hole, repeat such language now. But a Kinnock-style wealth tax isn't going to happen for two reasons. First, it would make the UK a distinct outlier at a time when Reeves is striving to maintain international competitiveness (according to Sky News, of the 38 OECD countries only Colombia, Norway, Spain and Switzerland levy net wealth taxes). Second, HMRC lacks the data on property and pensions required to introduce a general wealth tax (and it would take several years to establish a new system). Yet it suits Labour to maintain ambiguity over this issue. It avoids another public row with the party's soft left, of which Kinnock is the founding father, and it also allows Reeves to surprise business on the upside when she delivers that Budget. But while the Chancellor won't be introducing a wealth tax, she will be taxing wealth more. That much is guaranteed by the government's decision to maintain Labour's manifesto pledge not to raise income tax, VAT and National Insurance on workers. 'There's a lot else that could be done not to tax people who are very economically insecure at the moment,' a No 10 aide tells me. What could that mean? Options being explored by the Treasury include higher taxation of dividends through a rise in the 39 per cent rate or the abolition of the £500 tax-free allowance – as floated in Angela Rayner's once-dismissed memo – and an online betting tax (as proposed by Gordon Brown in his New Statesman guest edit), as well as a rise in the bank profits levy. Subscribe to The New Statesman today from only £8.99 per month Subscribe Pension tax relief could also be curbed for higher earners and some even speculate whether Reeves might introduce a new top rate of income tax (which, they argue, would not amount to a technical manifesto breach). Here is the political challenge for Labour. The panoply of measures to be announced this autumn will lack the totemic status of a wealth tax even as, to echo Denis Healey, there are 'howls of anguish' from the rich. For proof of that, recall Reeves' first Budget which imposed numerous taxes – on non-doms, farmers, private schools and private jets – but resulted in far more political pain than gain. Can the Chancellor reverse this dynamic? Here is one test of whether she can revive her fortunes. Related
New Statesman
01-07-2025
- Business
- New Statesman
The troubled welfare bill has passed – but at what cost?
Photo by Henry Nicholls -After removing the central point of the welfare bill – cuts to Personal Independence Payments – it passed this evening, 335 votes for and 260 against.. Now, Labour MPs have given their stamp to a bill that bares little resemblance to the cuts to benefits the government originally proposed when this process began. Stephen Timms, the social security and disability minister, announced the latest big concession from the government to the rebels just before 6pm. Shortly after, Andy McDonald, the fierce old Corbynite MP used a point of order to claim that it was no longer clear what MPs were voting on: 'So I ask the question, what are we supposed to be voting on tonight', he asked incredulously. 'Is it the Bill as drawn, or another Bill, because I'm confused. I think people in this chamber will need that clarification.' Another MP joked that she went out for a banana and by the time she came back, the bill had completely changed. It was a moment of chaos that could have come at any time during the Theresa May premiership – except Keir Starmer's government has a working majority of 165. The past six days have been torturous for the government. Last week, more than a third of Labour MPs backed a reasoned amendment which aimed to scrap the bill. Ministers were pushed out onto the defensive. Angela Rayner, Rachel Reeves and Wes Streeting were locked in negotiations with rebels, trying to bring them round to supporting the bill. The Deputy Prime Minister, who is cementing her position as one of the government's most influential cabinet ministers, still couldn't do enough to prevent the big concession we saw this evening. In the run up to today's vote, the government offered the rebels two concessions: pushing back the implementation of the cuts to Personal Independence Payments to November 2026 and announcing a review of the assessment process to be conducted by Steven Timms. The Work and Pensions secretary, Liz Kendall, originally told MPs the review would report in Autumn 2026, but this was met with consternation that if the changes to Pip were set to come in at the same time – what would be the point of the Timms review? Those changes to Pip are gone now. They may never come back before the Commons, leaving the Treasury with a £2.5bn hole in its spreadsheets. Liverpool Wavertree MP Paula Barker spoke for many on the backbenches when she described the way this bill played out as 'incoherent and shambolic'. This vote followed hours of impassioned debate from both sides of the Commons. Marie Tidball, the only visibly physically disabled MP was openly emotional in her contribution, 'I cannot support the proposed changes to Pip,' she said, 'and since April I have been engaging with government at the very highest level'. Tidball said she would vote against the bill. One thing was clear, even in the contribution of some of those who said they would be voting for Kendall's reforms: most MPs are cognisant that this was intended to be a cost-saving measure. Jeremy Corbyn, the former Labour leader, argued 'the whole origin of this bill was a demand to save £5bn'. He added: 'I simply say this is a ridiculous situation that the secretary of state has put us in. Withdraw the bill now.' Subscribe to The New Statesman today from only £8.99 per month Subscribe This was a hollow victory for the government. Even though the bill passed, and these reforms will eventually be implemented, the management of its passage has been damaging. Many rebels are furious over how they were treated by senior members of the government (whether those who voted against will face any consequences remains to be seen). Starmer will need to do a lot of crisis management over the coming weeks to repair Number 10's relationship with the PLP. If not, who's to say any future disagreements between this Labour government and its backbenches won't be one hundred times worse. But in some ways, it is also a serious failure for Starmer and his project. While some rebels are furious with how they have been treated, they also likely feel galvanised after winning this war of contrition with the government. In sustaining pressure on the government, they have succeeded in moulding these reforms to their own agenda. Following the concession that no changes would be made until the Timms review had reported, one MP told me simply, 'amazing'. The government have been backed into a corner. With the money saved by these reforms slashed in half, Labour will likely have no choice but to raise taxes in the Autumn, something they have repeatedly failed to commit to. The money will need to come from somewhere. Over to you, Rachel Reeves. Related
Spectator
26-06-2025
- Politics
- Spectator
Labour's welfare rebels will regret their revolt
A Labour government facing a rebellion over welfare reform is something of a dog-bites-man story – Labour never finds this issue easy. But the nature of the current rebellion tells us something novel and revealing, not about the policy, but about the modern Member of Parliament. Yes, principle and policy matter here, but what's really driving dissent on Labour's backbenches is not ideology, but geography. Or more precisely, constituency geography. Many of the Labour MPs likely to defy the leadership on welfare cuts are not old lags or even rebels by temperament. Many are new to Westminster, elected in the 2024 landslide that gave Labour power. And their rebellion is not really born of Corbynite nostalgia or factional muscle-flexing. Instead, it reflects the simple, brutal truth that the job of an MP has changed – and changed profoundly. These MPs were elected with a tacit remit: represent us, not the leadership Simply, MPs no longer exercise their judgement on behalf of their voters in the best interest of constituency and country. Instead they dance to the tune sung by the loudest voices in their seats. Edmund Burke? Never heard of him. We are all populists now. Many of these new MPs sit on slim majorities. Many are in places where Labour has not historically been strong, or where voters lent their support on the basis of 'give the other lot a chance'. That makes these MPs cautious. They are not ideological crusaders; they are political caretakers, aware that even a modest swing could turf them out in 2029. Many of these MPs were chosen as candidates not by party bosses but by local constituency Labour parties, many of which imposed strict requirements for candidates to have strong local links. In practice, that meant selecting people who would be constituency champions first and parliamentary representatives second. They were elected with a tacit remit: represent us, not the leadership. Do what the voters say, not what the whips want. In years past, an MP could take a tough vote in Westminster, spend the weekend lying low and hope to ride out any local discomfort. Not anymore. Constituents can now express outrage with astonishing speed and reach. One vote in the House of Commons can trigger a hundred angry emails before teatime. MPs talk of inboxes flooded daily with demands, complaints, even threats – each message carrying the implicit warning: 'Ignore me and I'll tell everyone I know.' Some backbenchers report receiving upwards of a hundred emails a day. Each one feels urgent. Each one, potentially, a vote lost. And with social media serving as a megaphone for grievance, the stakes are high. One unanswered constituent email is no longer just a minor oversight – it's a potential Facebook post shared across local groups, a TikTok rant that ends with 'this is why I'm never voting Labour again'. All of which makes the politics of welfare reform exceedingly difficult. The government's proposals are, in broad terms, sensible: a modest tightening of fiscal policy aimed at curbing long-term spending. But to the newly elected MP from a marginal seat, they look like a live grenade. Cut benefits? Even just slow their growth? Cue a tidal wave of local outrage. The real story of this rebellion is not about ideology or principle or even the Starmer team's party management. It is about how the role of an MP has shifted from legislator to local caseworker, from party loyalist to localist public servant in the most literal sense. This new hyper-local, hyper-responsive model of representation is noble in theory but toxic to good governance. It makes every hard national decision a political minefield of potential local explosions. And yet, there is a deeper irony here – one that deserves attention. The very MPs who are blocking welfare reform to keep their local voters happy may well be ensuring those same voters end up unhappier in the long run. Britain's ever-growing welfare bill already threatens the state's ability to deliver the other public goods people value most. This is a country that spends over £100 billion a year just servicing its debt, that cannot fully defend itself against foreign threats, where local councils are sliding into bankruptcy trying – unsuccessfully – to care for the elderly and educate children with special needs. The more the welfare bill expands, the more it crowds out spending on those vital functions. The very things that voters prize – local health, local schools, local services – are being slowly strangled by a welfare-fuelled fiscal burden that no government dares challenge. And so the new tribunes of the people, by blocking reform today, are sowing the seeds of tomorrow's grievances. Their voters will come knocking again. And this time, the complaint won't be about one email unanswered or even some welfare cuts – it'll be about a state that cannot answer their needs at all.
Telegraph
21-06-2025
- Politics
- Telegraph
Don't trust two-tier Keir on Palestine Action. He hasn't turned sound
If a mystic with a crystal ball asked you last week to guess which political leader would try to ban a group with 'Palestine' in the name, you'd have plumped for Donald Trump. Turns out, however, it was Keir Starmer. I speak of Palestine Action, the neo-Corbynite clowns who infiltrated RAF Brize Norton on electric scooters to sabotage strategic aircraft. The Government says it will ban them as terrorists for their trouble. Has the Prime Minster finally gone sound? Has he heck. The petulant hoodlums will complain that unlike Hamas and the other groups on the list, they weren't trying to bomb anybody. That argument will probably prevail; the ban must win the support of both MPs and peers before coming into force, so it may never materialise. No, it's all about the headlines. Nigel Farage demanded that Palestine Action be proscribed in the morning and by the afternoon, Starmer had claimed the oxygen for his own. This created the impression that the Government takes our national security seriously, stands against the irritating Gaza radicals and is determined to crack down on treason. No need to vote Reform then, eh? He's a slippery fish, that prime minister. This is the most unprincipled government in living memory and its playbook is always the same. Wrongfoot and gaslight the public while advancing an agenda that nobody has voted for. Mark my words. After this, Starmer's betrayal of Israel will continue apace. Take the child sex gangs. The inquiry was a controlled explosion of a political landmine with senior Labour figures protected by spin. Meanwhile, this was Death Week, with infanticide and geronticide, neither of which were in Labour's manifesto, forced through the Commons. Thus the Government emerges as the shadowy winner while the country and its despairing people have lost. The same pattern can be seen in everything from the economy to immigration and defence. Starmer talks tough, cracks out a little U-turn, then when the heat has passed, pushes on with his agenda, making superficial modifications to throw us off the scent. Last week, for instance, it emerged that our rising defence budget will also fund Heathrow's third runway, reduce food prices and bolster supply chains. The Prime Minister told us he was serious about defending the realm, but he didn't really mean it. The Palestine Action episode is the same. This government is now the most Israelophobic since the Fifties. It has suspended arms export licences while continuing to provide them to the repressive regimes of Qatar, Turkey and Egypt. It has sanctioned objectionable Israeli ministers while leaving far more chauvinistic regional figures untouched. The Tunisian president, for example, demands 'all the land of Palestine' for the Arabs. No two-state solution there. No British sanctions, either. It has presided over crackdowns on free speech and two-tier policing of the Gaza mobs. Just as sensible voters reach the end of their tether, however, Sir Keir throws sand in their eyes on Palestine Action. Now it is the turn of his Corbynite Left to feel the burn. But this is nothing more than an exercise in damage limitation; as always, the pendulum will swing back the other way, only – crucially – not as far as its original position. Thus public rage is subdued while the Overton Window creeps inexorably leftwards. You can feel it, can't you? You know you're being conned but you can't quite put your finger on it. As the months pass, a browbeaten and confused electorate finds the country drifting away beneath its feet, little by little becoming unrecognisable.
New Statesman
21-06-2025
- Politics
- New Statesman
Meet the Blue Labour bros
Illustration by Nate Kitch Blue Labour has always been more of a collection of guys than a faction. From its beginnings in the aftermath of the financial crisis, it was Maurice Glasman and a small handful of Jons and not a huge amount more. It is now having something of a resurgence, and beginning to develop a degree of internal reality, although the reality of its actual influence remains debated. A Blue Labour group of MPs formed at the end of last year; now a parliamentary staff network has been set up. There are, I'm told, around 15 of these staffers so far, planning a roster of events and meetings and general association. Over the last few weeks, I've been speaking to some of the new staff group to try and understand them. What does this lanyard class that hates the lanyard class believe? You can paint a picture of who they are with heavy use of the caveat 'mostly but not exclusively'. They are mostly, but not exclusively, men, and mostly, but not exclusively, quite young. They mostly work for new-intake MPs; they are mostly white, and mostly from outside of London. In short, they look like any random sampling of Labour's parliamentary staff class would. Some work for members of the Blue Labour MPs group; some work for completely conventional Starmer-era Labour MPs. Their diagnosis of what is wrong with the country and what Labour should do about it is commensurate with the rest of Blue Labour in its Dan Carden and Jonathan Hinder era. One member of the staff network views Blue Labour as a project of 'realigning the party with areas it represents'. Having come into the party as a Corbynite, they say they 'used to be much more liberal on immigration', but now believe that in the country the 'Overton Window has moved' and have moved with it. One staffer talks about being the grandchild of immigrants and hearing her family and friends increasingly express concern that more recent immigrants are not well integrated – indicating, she thinks, that worries about immigration and integration are far from the preserve of racists and traditionally anti-immigration parties, but are something Labour needs to reckon with. Another staffer says that Blue Labour is concerned with people who have been 'ignored by the establishment for decades', suffering both 'economic neglect' but also being 'ignored on issues like immigration'. He reckons that the 'liberalism of Blair has dominated the party for two decades', with 'not enough focus on class'. Another thinks we have an 'economy too focused on London and the South East', and that Labour is 'not giving white working-class men anything'. 'You've got to read the way the world is going,' they say, and ask 'do we want it in a Labour way, or in a right-wing way?' However, while my impression of Jonathan Hinder is as a man of total conviction (believing among other things that universities should be allowed to go bust and that we should at least think very seriously about leaving the ECHR), the staffers seem just as animated by the process of thinking and talking about politics as they do by the positions themselves. Clearly one of the attractions is not the specific appeal of Blue Labour itself, but the space it provides to talk about things. Keir Starmer's Labour Party is not a very ideas-y place, and these are, on an intellectual level, painfully earnest young people. 'We debate quite a lot – it's good to talk about ideas and philosophy, and all the things staffers never talk about,' says one member; another feels there is a 'frustration with the lack of ideas from the progressive wing of the party'. A third notes that 'a lot of MPs are issues-led, but not political'. When I ask for political heroes, I get Crosland and Blair: my strong sense is that in a different internal climate, these people might not have found themselves at the door of Blue Labour, and instead been scattered, ploughing perhaps somewhat idiosyncratic furrows in a variety of different factions. However, while their attitude to the government could in broad terms be described as loyalist, the ideological vacuum of Starmerism – famously unburdened by doctrine – and the government's lack of (or even decidemad uninterest in) intellectual vitality brings them here. It's not surprising that the people who are here for the debating society have ended up in the tendency which began life as (and arguably has never been much more than) a series of seminars. The staff group's convenor does sees debate as part of the programme though: he says having 'debate and discussion' is really important in and of itself, but also hopes to help flesh out the Blue Labour policy programme (answering questions like, 'what is a Blue Labour foreign policy?' for example). This desire for debate also intersects with another current dynamic in the party: the total sidelining of the Labour left. Dan Carden, the leader of the Blue Labour MP caucus, was a member of Corbyn's shadow cabinet and came up through Unite (he has described his journey into Blue Labour as being from 'left to left'). Various members of the staff network started their political lives as Corbynites, and even those who didn't are fairly ardent believers in the need for a broad-church Labour Party. I hear some variant on 'Blair never expelled Corbyn' more than once in my conversations. One staffer thinks that thanks to Corbyn's foreign policy positions and the anti-Semitism scandal, 'the entire Corbyn project was delegitimised' and there wasn't a thorough evaluation of what worked and what didn't. Subscribe to The New Statesman today from only £8.99 per month Subscribe As much as one of the older members I speak to wants to stress that Blue Labour is not just a reaction to Reform and has been 'going for 15 years', the experience of Corbynism and of the loss of Red Wall seats in 2019 has clearly imprinted itself deeply on the tendency's new iteration. The new Blue Labour owes significant DNA not just to the valiant seminar-convening of Jonathan Rutherford and co., but also to post-2019 projects like the moderate 'Renaissance', the Corbynite 'No Holding Back', and the Labour Together thinking on show in 'Red Shift', the report which famously brought us Stevenage Woman. This post-Corbyn inheritance is also present in how the tendency talks about the state and the economy. In one staffer's view, Blue Labour's 'economic populism is more important than its cultural elements'; the group's convenor immediately says that it is Blue Labour's answers on political economy that most appealed to him. The staffers' views chime with the views of Blue Labour MPs Jonathan Hinder, Connor Naismith and David Smith, who wrote in LabourList last week that their agenda is 'an explicit challenge to the neoliberal, capitalist consensus, and it belongs to the radical labour tradition'. There is a reticence amongst the staffers when it comes to Glasman and some of his more recent interventions (the repeated assertion that progressives don't want you to enjoy sex with your wife; an appearance on Steve Bannon's podcast; tirades about the chancellor and the attorney general). While the group's convenor (who tells me that he first became interested in Blue Labour because when was younger he would 'watch and read stuff online, lectures and articles, by Cruddas and Glasman') says the Labour peer's connections with the Maga movement are 'realpolitik', conversations Labour needs to be open to having, others are less positive and more awkward when asked about their long-time standard bearer. They also acknowledge that Blue Labour has, as one of them puts it, a 'brand issue' within Labour, a party whose membership are in the main bog-standard left liberals. They aren't wrong: one Labour MP I spoke to about this piece called Blue Labour 'four guys who claim they do have girlfriends but that they go to another school'. It's hard to escape the impression that this MP and critics like them won't be persuaded by one staffer's arguments that Blue Labour is 'not anti-liberal, it's a critique of liberalism' or another's earnest assertion that he just wants more of our political conversation to address the 'moral plane' of people's lives. Arguments about the out-of-touch nature of the political classes are probably not best made by Westminster bag carriers – as the bag carriers well know. (There are 'too many of me in the economy', the group's convenor, a white man in his 20s with an Oxbridge degree, tells me ruefully.) Everything, however, starts somewhere. Political history is scattered with the vehicles of bright young things, some of which went places and some of which didn't. This group of earnest young people could do worse for themselves than as the staff vanguard of Labour's most discussed faction – even if not all the discussion is wholly positive. That being said, the staff network claims fairly moderate ambitions for itself and its tendency: 'Can I ever see them putting forward NPF or NEC candidates? Honestly, no,' one member tells me. In the meantime, though, there's another seminar to attend. [See also: Labour's 'old right' has been reborn] Related
