Sir Keir Starmer’s former transport secretary faced a backlash yesterday after she called for Labour to hike taxes yet further to see off the threat of Reform. Louise Haigh said her party should ditch its ‘self-imposed tax rules’ preventing the Government raising income tax, VAT or National Insurance. It came as it emerged last night No10 is rethinking its winter fuel payment cut.
Downing Street sources said they were considering whether to increase the £11,500 threshold over which pensioners are no longer eligible for the allowance, rather than a reversal of the policy, the Guardian reported. It follows concern the controversial policy could cause Labour serious electoral damage. Ms Haigh, who still holds sway on the left of the party, argued tax rises as part of an ‘economic reset’ would allow a ‘serious programme of investment and reindustrialisation’ to show voters the Government was on their side.
She is the most senior Labour MP to criticise the Prime Minister for his response to Labour’s drubbing in last week’s local elections. ‘It failed to acknowledge any need to change course but simply committed itself to double down on the plan, while haemorrhaging votes to the parties of our Left and Right,’ she told The Times. She said welfare reforms and the loss of winter fuel payments had been ‘totemic’ for many voters.
Louise Haigh said Labour party should ditch its ‘self-imposed tax rules’ preventing the Government raising income tax, VAT or National Insurance It came as it emerged last night No10 is rethinking its winter fuel payment cut. Pictured: Keir Starmer and Louise during visit to Hitachi Rail last August in Aycliffe Ms Haigh became Sir Keir’s first ministerial casualty when she was axed as transport secretary last year after admitting a historical fraud conviction. Her comments sparked immediate criticism.
John Caudwell, the founder of Phones4U, who backed Labour at the general election, said her suggestion was ‘nonsense’. He told Times Radio: ‘Tax hikes are not going to reindustrialise the economy. How does she think she’s going to do that?
They are just straplines with no substance behind them.’ Shadow business spokesman Andrew Griffith told the Mail: ‘Labour should be reversing the disastrous measures they’ve already implemented.’ Labour pledged before the general election that it would not raise VAT, National Insurance or income tax. But Chancellor Rachel Reeves has been accused of breaking the promise by putting up employers’ National Insurance costs and introducing 20 per cent VAT on private school fees. Downing Street on Monday reaffirmed its commitment to the manifesto promises.
Paul Johnson, the director of the Institute for Fiscal Studies, also cautioned against tax hikes. He said: ‘It may not be such a good political idea increasing income taxes or VAT or whatever specifically she has in mind.’ But pressure is growing on Sir Keir to reverse his party’s fortunes after Reform picked up ten councils and more than 600 seats in Thursday’s polls. Nigel Farage, whose party also gained an MP in the Runcorn and Helsby by-election, hailed the results as the end of two-party politics.
