Cabinet minister refuses to rule out tax rises after welfare U-turn

Telegraph

19 hours ago

A Cabinet minister has refused to rule out tax rises as he said there will be 'financial consequences' from Sir Keir Starmer's welfare U-turn.
Pat McFadden also said ministers 'will keep to the tax promises' in the Labour election manifesto.
Rachel Reeves has seen the £4.8 billion predicted savings from welfare changes whittled away through the Government's changes to planned welfare reforms to keep backbenchers onside.
In a late concession on Tuesday evening, ministers shelved plans to restrict eligibility for the personal independence payment, with any changes now only coming after a review of the benefit.
Almost 50 Labour MPs revolted despite the concessions.
Mr McFadden, The Chancellor of the Duchy of Lancaster, told Times Radio on Wednesday that there will be 'financial consequences' to the decision, and indicated that they would be set out at the budget expected in the autumn.
Economists at the Institute for Fiscal Studies and Resolution Foundation think tanks warned that Tuesday's concessions meant Ms Reeves could now expect no 'net savings' by 2029/30 – a key year for meeting her fiscal targets.
'So many moving parts'
Mr McFadden told BBC Breakfast he is 'not going to speculate' on what could be in the budget, but said that ministers 'will keep to the tax promises' in their manifesto.
Asked explicitly whether he could rule out tax rises, the Cabinet minister told the programme: 'I'm not going to speculate on the budget.
'We will keep to the tax promises that we made in our manifesto when we fought the election last year. But it doesn't make sense for me to speculate on something where, as I say, there are so many moving parts of which this is only one element.'
Ministers have repeatedly insisted that Labour will not raise taxes on 'working people', specifically income tax, national insurance or VAT.
But Ms Reeves also remains committed to her 'ironclad' fiscal rules, which require day-to-day spending to be covered by revenues – not borrowing – in 2029/30.
Despite the last-minute concessions, a total of 49 Labour MPs rebelled and voted against the legislation, the largest revolt of Sir Keir's premiership.
Overall, the legislation cleared its first parliamentary hurdle by 335 votes to 260, a majority of 75.
The changes were announced by minister Sir Stephen Timms to MPs in the Commons, and came after a first round of concessions offered last week did not seem enough to quell the rebellion.
Mr McFadden described the wrangling as a 'difficult process', but told Times Radio that the Government 'got to a position where the second reading of the Bill was passed'.
Rachael Maskell, MP for York Central, had tabled an amendment designed to halt the legislation, which was backed by a total of 44 Labour MPs.
Ms Maskell said on Wednesday that the concessions signalled a 'change in power between the Prime Minister' and disabled people.
She told BBC Radio 4's Today programme that Tuesday saw 'the Bill disintegrating before our eyes'.
Ms Maskell added: 'And I think throughout the day, what we saw was a change in power between the Prime Minister and his Government and disabled people across our country, they having their voice at the heart of Parliament, and that's why I put the reasoned amendment down.'
The York Central MP also said that she is 'glad' that the debate was 'had in public' and 'now disabled people should feel empowered to have their voice at long last in an ableist Parliament '.