Labour won't break tax pledges after welfare climbdown, minister says
But the minister ruled out increases in income tax, National Insurance or VAT in response to the government's decisions on welfare."I'm not going to speculate on the Budget," McFadden said."We will keep to the tax promises that we made in our manifesto when we fought the election last year."Helen Miller, incoming director of the Institute for Fiscal Studies think tank, said the government had moved from a position of saving £5bn to nothing by 2030.She said: "Come autumn, given the government has not been able to put through the cuts it wanted, and given that the growth might get worse rather than better, it's looking increasingly likely that, if the government needs to do something, it's going to turn to tax rises."In its election manifesto, Labour said it would not raise taxes on "working people", specifically income tax, national insurance or VAT.Reeves has committed to meeting so-called fiscal rules, which most governments in wealthy nations have in place to try to maintain credibility with financial markets.Reeves's two main rules are not to borrow to fund day-to-day public spending; and to get debt falling as a share of the UK economic output by 2029/30.But Reeves's determination to stick to these rules has led to speculation that she will raise taxes or announce spending cuts in her autumn Budget.
The Labour government's expensive policy reversals on welfare and the winter fuel allowance for pensioners have made that task more difficult.Appearing on ITV's Lorraine programme, Deputy Prime Minister Angela Rayner said welfare reform was "always difficult", and said the government has to "flatten that curve a bit" of welfare spending rising.She said: "Rachel [Reeves] will have to look at those challenges" in the Budget.The Labour rebellion over the welfare changes undermines the authority of the chancellor and Prime Minister Sir Keir Starmer, and raises questions about their ability to enact key parts of their policy programme.Asked about the challenge to the government from its own backbenchers, Rayner said "to be fair to colleagues many of them have been raising them [concerns] privately", adding that "the process can look aggy but that's the way you get to consensus".The biggest savings in the welfare bill would have come from restricting eligibility for the personal independence payment (Pip), the main disability benefit in England, Wales and Northern Ireland.But in a late concession on Tuesday evening, ministers shelved those plans and said any Pip changes would happen after a review of the benefit.In the end, MPs gave the government's Universal Credit and Personal Independence Payment Bill their initial approval, by 335 votes to 260.Though it was not enough to stop 49 Labour MPs voting against the legislation, the largest revolt of Sir Keir 's premiership.Labour's Rachael Maskell had proposed an amendment designed to halt the legislation, which was backed by a total of 44 Labour MPs.The York Central MP said she had seen the bill "disintegrating before our eyes".Maskell said she was glad there had been a public debate about the issue and "now disabled people should feel empowered to have their voice at long last in an ableist parliament".Labour MP Chris Curtis, who supported the welfare changes, said the government needed to focus on economic growth to put the finances on a stable footing."I hope this government is going to go further and faster, and be bolder and more radical on unlocking growth in this country," he said."The most important thing for financial stability is to ensure we get the economy growing again."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South Wales Argus
23 minutes ago
- South Wales Argus
Labour sees biggest first-year poll drop for governing party since 1990s
Sir Keir Starmer's party has averaged 24% in polls in the past month, down 10 points from 34% in the weeks following the 2024 election. It is common for political parties to experience a slide in the polls after taking power – it has happened to every UK government bar one in the past 40 years – but a drop of this size is unusual. The last time it was in double digits was 1992-93, when the Tory administration led by Mr Major saw its poll numbers fall 12 points, from an average of 43% in the weeks after the April 1992 election to 31% a year later. John Major meets people on a walkabout in Bolton during the 1992 general election campaign (Adam Butler/PA) The findings have been compiled by the PA news agency, using its own archive of national poll data combined with figures published in the long-running British General Election academic studies. Polls measuring voting intention do not always appear in the immediate aftermath of an election – for instance, the first polls of this parliament were not carried out until the start of August 2024, one month after Labour's victory on July 4. To compare Labour's poll performance fairly with that of previous governments, the average poll numbers in the weeks after a general election have been compared with those for the month leading up to the first anniversary of that election. Almost every government in the past four decades has seen their poll standings slip over this period, but mostly by single digits – and often from a much higher starting point than Labour's 34% in 2024. For example, the Labour government led by Tony Blair saw its vote share in the polls drop by an average of six points during its first year in office in 1997-98, though from the lofty heights of 59% to 53%, still well ahead of all other parties. Tony Blair and his wife, Cherie, walk into Downing Street after Labour won the 1997 general election (Sean Dempsey/PA) Labour's second term under Mr Blair saw a larger poll drop of seven points, but from 49% to 42% – again, comfortably ahead of its rivals. The Conservative government led by Boris Johnson elected in 2019 saw its first-year poll ratings also slip by seven points, but from 46% to 39%. There were smaller drops at the start of Labour's third term in 2005-06 (down five points in 12 months) and at the start of Conservative leader David Cameron's first term as PM in 2010 (down three points), though Mr Cameron's second win in 2015 was followed by a larger six-point fall. The one recent exception to this trend was the Conservative minority government led by Theresa May that was elected in 2017, with Tory support in the polls increasing by two points over 12 months, from 40% to 42%. Theresa May speaks in Downing Street after the 2017 general election, which led to the formation of a minority Conservative government (Jonathan Brady/PA) A first-year drop in the polls for a governing party is typically accompanied by a rise in support for the main opposition in Parliament. But the past 12 months have seen something different and new in UK politics: a simultaneous and large fall in support for both the government and the opposition, with the Conservatives slipping from an average of 25% in the aftermath of the 2024 election to 18% over the past month. And while Labour and the Tories have both slid in the polls, smaller parties have risen – notably Reform, which has climbed from third place on 17% to first place on 29%. The Liberal Democrats have also edged up, from 12% to 14%, while the Greens have increased from 6% to 9%. Opinion polls are snapshots of the prevailing public mood, not projections or forecasts – and they do not predict what could happen at the next general election. But the amount of movement in recent polls, in particular the fall in support for both Labour and the Conservatives, points to an unsettled mood among voters and a volatile political landscape. Sir Keir's personal approval ratings make similarly challenging reading for the Prime Minister. Polling company Ipsos has measured public satisfaction with prime ministers since the late 1970s. Its data tracks the proportion of adults in Britain who say they are either satisfied or dissatisfied with how the PM is doing their job. The difference between these two numbers represents the approval score. Margaret Thatcher speaks to the press the day after winning the 1979 general election (PA) The most recent Ipsos survey, completed in early June – not quite a full year since the general election – suggests 19% of adults are satisfied with Sir Keir's performance and 73% are dissatisfied, giving him a net approval score of minus 54. This is lower than any other score recorded by Ipsos for a prime minister roughly 12 months after taking office. The next lowest score is minus 48, for Labour's Gordon Brown in June 2008, and minus 37 for the Conservatives' Rishi Sunak in October 2023. The highest approval ratings were for Mr Blair in May 1998 (a plus score of 44) and Mr Major in November 1991 (plus 15). The other scores are minus 3 for Mr Cameron (May 2011); minus 7 for Conservative PM Margaret Thatcher (June 1980) and minus 25 for Mrs May (July 2017), while Mr Johnson had a net approval rating of zero a year into office in July 2020, with the same proportion of people saying they were satisfied and dissatisfied. Sir Keir's current score of minus 54 is not quite the worst ever approval rating for a prime minister reported by Ipsos, however. Mrs Thatcher dropped as low as minus 56 in March 1990, while both Mr Major and Mr Sunak sank as far as minus 59, in August 1994 and April 2024 respectively.
Finextra
23 minutes ago
- Finextra
Paxos launches stablecoin in the EU
Digital asset outfit Paxos has launched its Global Dollar (USDG) stablecoin across the European Union. 0 USDG is landing in Europe compliant with the EU's Markets in Crypto-Assets (MiCA) regulations, says Paxos, with a portion of reserve assets with European banking partners. The stablecoin is available via a host of distribution partners, including Kraken, Gate, Coinmetro, SwissBorg, Zodia Custody, and Orbital. Walter Hessert, head, strategy, Paxos, says: 'USDG is a fully regulated global USD-stablecoin that is compliant with MiCA and now available in the EU, a testament to our commitment to offering global digital assets that are supervised by prudential regulators and also meet the highest standards of consumer protection. "We're excited to partner with some of the leading players in Europe to bring this leading standard of compliance to more than 450 million consumers in the European Union.'
South Wales Argus
23 minutes ago
- South Wales Argus
Starmer faces Labour turmoil and global volatility as he marks year in Number 10
The Prime Minister led his party back into power with more than 400 MPs on July 4 last year – clinching a majority just short of Sir Tony Blair's landslide in 1997. But with a daunting in-tray of problems including a stuttering economy, creaking public services and global volatility, his political honeymoon period was short-lived. The Prime Minister said his Cabinet should look back with a sense of 'pride' at the first year in office (Carl Court/PA) His personal popularity is now the lowest of any British premier after their first 12 months in office, political scientist and polling guru Professor Sir John Curtice said. 'There were pretty clear potential weaknesses before they even started, and most of those weaknesses have basically just been exposed over the course of the last 12 months,' he told the PA news agency. Sir John said part of the problem lay in what he described as a failure of narrative in setting out the Government's vision for change to the public. 'They're portraying themselves as a repair gang rather than the builders of a new Jerusalem. Pessimism doesn't necessarily go down very well,' he told PA. 'The thing with Starmer is, he's a brilliant prosecution lawyer… But prosecution lawyers present cases that have been (put together) by someone else. The problem is that as a political leader you've got to prosecute your own case. 'Maybe he needs new personnel? Either he's got to learn to do it himself or get someone in to do it for him.' That verdict was echoed by some dissenting voices within Labour ranks, where there is lingering discontent among rebels over the Government's Welfare Bill despite Number 10 offering major concessions on the legislation. The Government saw off the threat of a major Commons defeat over the legislation on Tuesday after shelving plans to restrict eligibility for the personal independence payment (Pip), the main disability benefit in England. 'I think he really needs to think about why he wants to be a Labour Prime Minister and what is it he actually cares about,' one long-serving Labour MP said. They said Tuesday had marked 'the lowest point' in Sir Keir's premiership so far and raised questions about his authority, warning that backbenchers may now feel emboldened to demand further U-turns elsewhere. Sir John said that the Government's challenges in passing legislation were unsurprising with the broad but fragile coalition of support on which Labour built its election victory, securing 412 seats on just 35% of the vote. That means many MPs defending narrow majorities and raises the prospect of 'a large body of people who are nervous about their political futures,' he said. The Government's original welfare proposals had been part of a package that ministers expected to save up to £5 billion a year, leaving Chancellor Rachel Reeves needing to look for the money elsewhere. The fallout threatens to cause lasting damage to morale in Labour ranks, with some rebels calling for a reset in relations between the parliamentary party and the leadership before fractures widen. Images of the Chancellor crying in the Commons on Wednesday have also led to questions about her future, although a Treasury spokesman cited a 'personal matter' as the cause of her distress and Number 10 said she would remain in post. Asked whether it was time for a course correction, Downing Street has said the Prime Minister will 'plough on' with the 'very busy agenda' of Government. But the MP quoted above said: 'The idea that they can keep carrying on as they've been carrying on is suicidal. 'They have no real sense of how the party thinks and feels.' Others had a more optimistic view of the year ahead, with a Starmer loyalist who supported the Bill suggesting the upset could be salvaged with a 'measured but solid response' from the Government. 'The worst they can do is nothing,' the backbencher added. The Prime Minister used a Cabinet meeting on Tuesday to defend his record in office, telling ministers the welfare Bill was 'to help those who can work into employment and ensure dignity and security for those who can't work.' He said they could all 'rightly look back with a real sense of pride and achievement' on the last 12 months, pointing to a reduction in NHS waiting lists and a series of economic agreements struck with the US, EU and India. Abroad, the Prime Minister faces a tricky diplomatic balancing act as he seeks to strengthen ties with both Europe and Washington amid global instability from the Ukraine war and Middle East crisis. Sir Keir Starmer secured a trade deal with the US last month (Suzanne Plunkett/PA)h At home, Labour is staring down a threat from Nigel Farage's Reform UK party, which turned opinion poll momentum into widespread gains at the ballot box during the local elections in May. Sir John said that parties such as Reform and the Greens offer more choice to voters wanting to express their discontent with Labour while the Tories continue to flounder in the polls. 'The character of the challenge is different from what it has been historically,' he said. Tim Bale, professor of politics at Queen Mary University, said people had been expecting bold change on areas such as workers' rights and growth, and the Government's achievements so far were 'pretty small beer' by comparison. Critics say the first year has instead been marked by a series of U-turns, including a partial reversal of cuts to the winter fuel payment and the move to launch a national inquiry into grooming gangs after months of resisting opposition pressure to do so. The Government disputes that framing, pointing out for example that ministers had never explicitly ruled out a statutory probe into child sexual exploitation but waited for a review to be carried out before making a decision. Prof Bale said he believed the first year had gone 'worse than most people imagined' and warned 'it's difficult for a leader who starts badly to persuade people that he or she is what they need.' But he said the problems were not necessarily fatal, adding that setbacks early on in a premiership have an upside in allowing for more time to 'turn it round'. 'If you look back to Margaret Thatcher, she was able to do that, so it's not a foregone conclusion that all is lost, even for Keir Starmer himself,' he said. Arguing that the Government could recover in the polls if its plans for the economy and public services pay off, he added: 'I think you can see the light at the end of the tunnel, but it's a very long tunnel.' Sir Keir has pledged to lead a 'decade of national renewal' through a phased approach to Government, the first year of which he said would involve 'cleaning up the mess' his administration had inherited. In a speech last week seeking to set the tone for the future, he said: 'We've wiped the state clean, we've stabilised the economy, and now we can go on to the next phase of government, building on that foundation.' A Government spokesperson said: 'We were elected with a commitment to deliver change and security for working people – and we are getting on with the job. 'We are delivering our Plan for Change – wages are rising faster than prices, interest rates have been cut four times, immigration has come down with 30,000 people with no right to be here removed and over four million NHS appointments have been delivered. 'Progress has been made, but we know people are impatient for change – and we are too – so we will continue to govern in the national interest for British people and deliver a decade of national renewal.'
