Starmer confronted with Labour demands for 'wealth taxes'
Sir Keir dodged the question without ruling the move out, insisting decisions will be taken at the Budget in the Autumn. The exchange at the cross-party Liaison Committee will fuel fears about looming tax pain, after the economy stalled and efforts to trim benefits spending were crushed by a Labour revolt.
Sir Keir listed measures aimed at easing cost-of-living pressures, including the increase in the minimum wage levels, but added: 'The central focus has to be on creating more wealth and making sure that we have a growing and thriving economy. 'That's been the single biggest failure of the last 14 years, which is we haven't had an economy that has grown in any significant way.' Mr Byrne, chair of the Business and Trade Committee, quipped that he was pleased Sir Keir had not ruled out the tax hikes.
Sir Keir also came under fire from Work and Pensions Committee chair Debbie Abrahams, who was one of the ringleaders of the benefits rebellion. Ms Abrahams challenged the premier to respond to disabled people who experienced 'fear and anxiety' before the Government agreed to gut its welfare Bill. 'Well, it's very important that they feel secure and supported, and that is at the heart of what we are doing in the changes we are making to welfare and related areas,' the Prime Minister said. Sir Keir said he did not accept that it would take several years before labour market changes allow more disabled people to be employed following Sir Charlie Mayfield's review.
Ms Abrahams said she felt 'ashamed' of the 'poor' welfare legislation the Government put forward. 'This was poor legislation. It was designed to save money for the Treasury by cutting support to sick and disabled people. 'It was so far removed from Labour values of fairness and social justice, let alone compassion and common decency. I have to say I felt ashamed.' In another tricky moment, Sir Keir was unable to say where extra housing to tackle rising levels of homelessness would come from.
The Liaison Committee put it to the Prime Minister that local councils looking to house homeless families were competing with the Home Office, which is looking to house asylum seekers. Sir Keir replied: 'I know, which is why I am so furious at the last government for leaving tens of thousands of asylum seekers unprocessed, with nowhere to live, other than accommodation paid for by the taxpayer.' The PM insisted there was 'lots of housing and many local authorities that can be used, and we're identifying where it can be used' when asked whether the Government was planning to take over accommodation to homeless families.
Pushed for specific examples, Sir Keir merely said he would write to the committee. Labour's wealth tax war is raging amid claims Rachel Reeves is set to reject demands for a charge on assets - but could hit pension reliefs instead. The Chancellor is desperately hunting for options as she faces an estimated £30billion black hole in the public finances at the Autumn Budget . She has been carefully avoiding ruling out a 'wealth tax' - with backbenchers pushing for 2 per cent levy on assets worth more than £10million. However, she is thought to be privately opposed to the move, with tax experts and Cabinet ministers warning it would only drive away more wealth people from Britain. A raid on pensions is still said to be on the table, with fears that the Treasury is again looking at slashing reliefs.
Currently higher-rate earners are spared 40 per cent tax on money that is put into retirement funds. However, reducing the relief to the 20 per cent basic rate could raise around £15billion for the government. The idea was rejected at the Budget last year, but Ms Reeves' situation has dramatically worsened. It would cause an outcry as cash in pension pots is already taxed when people draw incomes. The government is also facing mounting alarm that Brits are not saving enough into their pensions for comfortable retirement.
She is widely expected to extend the long-running freeze on tax thresholds to bring in billions of pounds more. Capital gains could also be raided, as the Chancellor insists she will not hike rates of income tax, employee national insurance or VAT. She has also vowed a 'cast-iron' commitment to fiscal rules, with the UK's debt mounting at risk of spiraling out of control. A senior government source told The Times that a wealth tax on assets was 'not going to happen'. 'The problem is that if the Treasury start shooting down Kinnock's proposal, they end up being boxed in,' the source said.
'It's not going to happen, but they can't say that publicly.' Experts have warned that the stalling economy together with spending pressures could mean the Chancellor has a £31billion funding gap. The tax burden is already set to hit a new high as a proportion of GDP after the last Budget imposed a £41billion increase - the biggest on record for a single package. Many believe the Chancellor will opt to extend the long-running freeze on tax thresholds. The policy, in place since 2022, is due to end in 2028-29. By that point it will have dragged an extra 4.2million people into the tax system as wages rise.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
26 minutes ago
- The Independent
The government must ensure the promise of free childcare is delivered
Takeup of the government's offer of free childcare has been one-quarter higher than predicted, which has prompted some voices in the sector to warn of its imminent 'collapse', because it is unclear how the planned expansion of the scheme in September will be funded. Bridget Phillipson, the education secretary, in an exclusive interview with The Independent, says the unexpectedly high numbers signing up for the scheme is a 'good problem to have'. There is no doubt that there is a problem, however. The higher takeup meant that the Department for Education spent £2bn on the scheme in the last financial year, covering most of the first year of the Labour government, rather than the planned £1.6bn. That gap was covered by additional funding announced in the spending review in March, but as we report today, the Institute for Fiscal Studies estimates that the gap will continue to widen as the scheme expands. The next expansion will happen in September, when working parents with children aged nine months and older will be offered 30 hours a week of 'free' childcare. Of course, the care is not 'free' in that it has to be paid for by taxpayers generally – on the grounds that helping the parents of young children to work is a public good. As Ms Phillipson puts it: 'If people are able to work, or work a few more hours, that helps us all as a society as well and it gets economic growth going.' The funding of the scheme will continue to be under pressure, but the most important fact about the scheme so far is that it has not collapsed. The Independent was among those voices warning that it had been underfunded by the Conservative government, but to its credit the new government has increased the money available. The finances of the scheme may be stretched, and many childcare providers continue to say that they cannot recruit enough staff at the wages they can afford, but the gloomier warnings of chaos and thousands of parents left without places have not yet been borne out. It is crucial to remain vigilant as the scheme expands so that remains the case. At the insistence of Jeremy Hunt, the chancellor in the previous government, the scheme was designed to start small, with a limited offer of free hours to older children, before expanding gradually to provide full coverage. This September's expansion is the final stage of that planned rollout, which so far has gone more smoothly than we expected. If the last stage is a stretch too far and some parents cannot immediately find the places they want, that would be a blow to the government's ambitions. Ms Phillipson is right that the problem facing the scheme in its final phase is the problem of success. The higher-than-expected demand means additional pressure on the public finances in the later years of this parliament – pressure that coincides with other increased demands on Rachel Reeves, the chancellor, from slow growth, higher interest rates and a government U-turn on disability benefits spending. Providing greater access to free childcare is a good policy that will help working families. Its success and ambition should be applauded. The government must now make sure that its expansion is a success.
The Sun
27 minutes ago
- The Sun
Asylum seekers are still getting money on taxpayer-funded credit cards after being granted refugee status
ASYLUM seekers are still receiving money on taxpayer-funded credit cards even after being granted refugee status. A probe has been launched after we uncovered cases of migrants saying they were still getting the handouts - despite rules stating payments must stop once leave to remain is granted. It piles fresh pressure on the Home Office, which is already facing questions over the ASPEN card scheme after it emerged thousands of attempts were made to spend the cash in gambling venues. 1 One migrant wrote in a Facebook group: 'I was granted refugee status in January 2025. I'm still getting money on my ASPEN card… do I need to inform the Home Office or will it stop automatically?' Another user replied: 'I know someone else this happened to. But he had payments for a whole year. 'He did not touch the money as the Home Office could ask you to refund if you are not entitled to this.' Another admitted they are getting payments for dependants who have gone home. When asylum seekers arrive in the UK, they are typically housed in fully catered hotels and receive £9.95 a week on their ASPEN card, rising to £49.18 a week if they are later moved to self-catered accommodation. A Home Office spokesperson said: 'The Home Office rules state that – when an individual ceases to qualify for support – their subsistence payments will automatically end, and their card will be cancelled, after a short transitional period. 'As part of our investigation into the functioning of Aspen cards, we will look into any instances where cards have not been cancelled as intended, and take whatever action is necessary to correct any faults.' The Tories last night insisted it was 'further evidence' Labour has 'lost control of the immigration system'. Shadow Home Secretary Chris Philp said: 'We have seen luxury hotels provided for illegal immigrants, record ever numbers crossing the channel, rapes and sex offences being committed by asylum seekers, taxpayers' money being used to fund gambling by illegal immigrants and now we find they can't even switch the payment cards off when they should. 'This system has become a complete farce. No wonder it costs billions each year. It is an insult to taxpayers that illegal immigrants get better treatment than they do.' Reform UK's Richard Tice also let rip: 'We keep being told that there is no waste in government yet it's clear to see taxpayers are being taken for a ride by asylum seekers. 'The solution to this is simple. If you stop the boats, you stop the benefits and the enormous costs that are associated with illegal crossings. Only Reform will do this.' The wider investigation into ASPEN card misuse began earlier this week, after a Freedom of Information request by PoliticsHome revealed more than 6,500 gambling-related transactions had been attempted by asylum seekers in the past year. Although online gambling was blocked, migrants were able to use the cards in physical sites such as casinos, slot machine arcades and lottery retailers. In some cases, they withdrew cash in or near gambling venues. There are currently around 80,000 ASPEN card users in the UK.
Daily Mail
27 minutes ago
- Daily Mail
Woman in Union Jack dress was turned away from Wetherspoons during anti-migrants protest
A woman wearing a Union Jack dress was turned away from a Wetherspoons so as 'not to increase tensions' after an anti-migrant protest in the area. Tanya Ostolski, 54, from Sutton-in-Ashfield, Nottinghamshire, says she was knocked back from The Picture House last night, despite being a regular in the pub. Dozens of protestors had gathered in the town centre from around 4.30pm after Reform MP Lee Anderson went against police advice to make an unverified claim that a local man charged with rape was an asylum seeker. It followed similar anti-migrant demonstrations outside The Bell Hotel in Epping, near Essex, and the Britannia Hotel in Canary Wharf in central London, in recent weeks. Last night's protests in Sutton-in-Ashfield had ended at around 7pm when protestors made their way back to the where the gathering began, around 50 metres from the pub. Many of those who took to the streets were waving Union flags or were wrapped in the St George's Cross flag and had sought to get into the pub after the demonstrations were over. But clashes with bouncers outside the pub quickly ensued when they were denied access due to a 'no-flag' policy deployed by Wetherspoons in their establishments. Ms Ostolski says she was holding a St George's Cross flag when she was first refused entry by bouncers on the door, before putting it in her bag in the hope that would allow her access. But the 54-year-old said she was 'absolutely disgusted' when she was told by those on the doors that she still wasn't allowed in because of her dress. She said: 'I go in there all the time and they refused entry. They didn't let me in with my flag, the flag is the English flag, so why shouldn't I be allowed to have an English flag? 'It's our flag, it's our nation's flag. I wasn't being aggressive or anything I didn't get lairy or anything. I put the flag back in my bag, and they said I can't come in because of my dress. 'They kept refusing me. I'm probably going to get barred now. They just said Tanya, you're not coming in. I feel absolutely disgusted, why should I be refused entry for wearing a dress or a flag?' The spokesman for Wetherspoons, Eddie Gershon, said the decision was made to ensure calm in the area and 'as a matter of common sense'. He said: 'Pub managers have a duty under the licensing laws, and as a matter of common sense, to judge every situation on its particular circumstances. 'In this case, the pub manager felt that it was important not to increase tensions. Therefore, on this occasion the manager asked customers not to enter with flags or any placards.' Ms Ostolski's knockback comes just days after a schoolgirl was put into isolation for wearing a similar Union Jack dress to celebrate being British at her school's culture day. 'Straight A' student Courtney Wright, 12, wore a Spice Girls-esque dress and wrote a speech about history and traditions as part of the celebrations on July 11. But the Year 7 pupil was told the dress was 'unacceptable' before being hauled out of lessons and made to sit in reception until her father collected her. Downing Street would go on to condemn that decision, with a spokesperson for the Prime Minister saying: 'The PM has always been clear that being British is something to be celebrated. 'You can see that from everything this government has done. We are a tolerant, diverse, open country, proud of being British.'
