Tax the rich more to fill black hole in public finances, Labour members tell Starmer

Yahoo

2 days ago

Sir Keir Starmer is under growing pressure to introduce a wealth tax to fill a black hole in public finances, after new polling shows almost all Labour members back the move.
The prime minister has been urged to adopt a 'radical change of direction' after a survey, shared exclusively with The Independent, showed that 91 per cent of party members think the government should tax the rich more.
It comes after deputy prime minister Angela Rayner pressed Rachel Reeves to consider eight wealth taxes rather than impose cuts on departments in a leaked memo earlier this year.
Former shadow chancellor Anneliese Dodds also weighed in, backing a wealth tax and warning that spending cuts will not 'deliver the kind of fiscal room that is necessary'.
It comes amid mounting questions over how the government will raise the money to fill the black hole in the public finances left by a series of major U-turns and spending commitments, with the National Institute of Economic and Social Research (NIESR) – a leading economic think tank – last month warning the chancellor is facing a £41.2bn shortfall.
Ministers have already squeezed their departmental funding in cuts unveiled at last month's spending review, meaning most expect the chancellor will have no choice but to raise taxes instead.
The polling, conducted by Survation for Compass, also found 84 per cent of Labour members want the government should end the two-child benefit cap – a policy which is increasingly unpopular among Labour MPs.
Former Labour MP Jon Cruddas, founder of Labour Together and a former policy coordinator for Labour minister Ed Miliband, told The Independent: "The danger now is that the leadership are way out of step with the membership and potentially the country in terms of the policies needed to head off Reform."
He added: "These are exactly the ideas we tested at Labour Together and are the basis for winning and transforming the country. The leadership should be listening to members – not out-of-touch factions."
Neal Lawson, director of Compass, said the polling showed that Sir Keir Starmer's 'fence-sitting and aping of Reform's rhetoric isn't wanted'.
'The government were elected on a promise of 'a decade of national renewal' and so far they've tried to cut welfare for disabled people and suspended the whip from MPs who disagreed.
'Party members think what the general public think - that Labour offered change and now simply has to deliver on it. Without a big reset, then the keys to Number 10 are being handed to Reform and Nigel Farage', he added.
Last year, just months after Labour took office, the whip was stripped from seven MPs – including former shadow chancellor John McDonnell – for voting against the cap.
And in July, the prime minister also suspended Rachael Maskell, Neil Duncan-Jordan, Brian Leishman and Chris Hinchliff from the party for voting against the government's controversial welfare cuts.
The polling indicated Sir Keir's party membership thinks he has been too heavy-handed on party discipline, with some 74 per cent believing that challenging the government on controversial legislation should not result in the suspension.
It comes amid growing concern over the direction of Sir Keir's government from voters on both the left and the right, with the prime minister's approval rating hitting an all-time low last month.
John McDonnell, who served as Jeremy Corbyn's shadow chancellor and lost the Labour whip last year, told The Independent that the survey 'confirms how starkly out of touch Keir Starmer is'.
'It's time for Keir not just to start listening to people beyond the Westminster bubble but also taking some decisive action. All people are saying to him is to behave like a Labour prime minister should', he added.
Meanwhile, left-wing MP Rachael Maskell – who led the rebellion against the government's welfare cuts and is strongly in favour of a wealth tax – said it shows that party members are 'clearly attuned to the injustices that they see in their communities'.
As Sir Keir embarks on his second year in office, Ms Maskell said the government should ensure the agenda is 'marked by progressive tax policies to be invested in public services and community priorities'.
Labour MP Richard Burgon, who was stripped of the whip last year, said the party must 'urgently change course'.
'Unless the Labour leadership completely changes its approach, it will continue to lose support and will open the doors for a Reform government.
'Instead of ignoring Labour members and punishing MPs who stand up for their constituents, the Labour leadership should start listening — and urgently change course', he said.
A Labour spokesperson said they do not comment on polling, but added: 'Labour's urgent task when we took office was to fix the foundations after 14 years of Tory chaos. Our next priority is to create a fairer Britain for working people.'
'Through our plan for change we have already boosted the minimum wage for three million of the lowest paid, we're rolling out free school meals, and we're delivering free breakfast clubs for primary school children.
'The stability we've brought to the economy has also seen five interest rate cuts, which means homebuyers now pay £1,000 less on their mortgage than they were a year ago. There's much more to do, but that's the change this Labour government has started to deliver after 14 years of Tory decline', the spokesperson added.
The polling surveyed 1,024 party members between August 5 and 6.