Latest news with #economicreset
The Guardian
31-05-2025
- Business
- The Guardian
Labour spending review must be ‘economic reset', Louise Haigh to say
Next month's spending review must be an 'economic reset' based on a bold wealth tax and higher public investment, the former cabinet minister Louise Haigh is to argue, as Keir Starmer faces renewed pressure from within Labour to change course. Haigh's comments come as Andy Burnham called for Labour to 're-establish itself unequivocally once again as the party of working-class ambition' with ambitious offerings on housing and education. Burnham, the mayor of Greater Manchester, will say ministers should allow mayors to build on public land, and set a target for the point at which more new social homes are being built than existing ones are sold off. Haigh and Burnham will make their interventions in speeches at an event taking place on Saturday organised by the Labour-allied thinktank Compass. Haigh, who quit the cabinet in November after it emerged she had been convicted of fraud over a missing work phone, will reiterate her call for a wealth tax after the local election results from 1 May, which she called 'a warning' from voters that they wanted bolder policies. She will say: 'The spending review must be a moment for an economic reset. I welcome the prime minister's review of winter fuel changes but we must go further, ripping up our self-imposed tax rules and taxing the country's vast wealth.' Haigh will say the current tax system 'punishes earned income but barely touches the sides of the real driver of inequality – wealth'. It is time to 'finally move beyond a broken model where working people's wages are topped up by tax credits and benefits, leaving bad employers and landlords to profit', she will say. 'It's about moving from a system of handouts for the rich to real investment for everyone else. We need real reform: a proper wealth tax that rewards work, closes loopholes and finally gives us the means to invest in the NHS, schools and our communities.' According to extracts of his speech released in advance, Burnham will say the spending review 'will define the rest of this parliament', and he will call for Labour to focus on ways it can positively combat the electoral threat from Reform UK. Burnham will say: 'Rather than standing for the status quo, the time has come for the party to re-establish itself unequivocally once again as the party of working-class ambition, shedding the perception in the Midlands and the north of a London-centric, university-oriented party.' This would require a particular focus on housing and education, to particularly address 'the single biggest cause of Britain's modern malaise: a housing crisis caused not by immigration but by ideology'. The Thatcher-era right-to-buy policy, without investment in new social homes, 'shattered the foundations on which generations of working-class British families built better lives', Burnham will say. 'Labour's clarion call should be to free Britain from the grip of the housing crisis. In this spending review, working with mayors in the big city regions, it should set the date by which each will reach the crucial tipping point of building more social homes than they are losing. 'This is the moment when, instead of tightening its grip, the housing crisis starts to ease. To do that, the spending review should unlock public land for mayors to use to build a new generation of council homes at pace – akin to the drive of the postwar Labour government.' Angela Rayner, the deputy prime minister and housing secretary, has already announced plans to restrict right to buy and has pushed for more investment in social homes, but as yet this has done little to ease the housing crisis. Other speakers at the Compass-run event will include Mark Drakeford, the former first minister of Wales, the Labour MPs Rachael Maskell and Simon Opher, and the junior energy minister, Miatta Fahnbulleh.
The Guardian
07-05-2025
- Business
- The Guardian
Keeping Farage from No 10 is ‘a battle for UK's future, heart and soul', Labour MPs told
Labour MPs have ramped up pressure on the Treasury, calling for an economic reset after the Reform UK surge in the local elections and saying that the economy is stuck in a 'doom loop'. The warning comes from the influential Labour Growth Group, a large caucus of loyalist new MPs who have lobbied the government to go further on planning and energy reforms. Its chair said that, without drastic action, the Reform UK leader Nigel Farage was on course to become prime minister. On Tuesday evening, the cabinet office minister Pat McFadden told Labour MPs they were in 'the fight of our lives' to take on Farage and said it would be 'a battle for the very future and the heart and soul of our country'. 'This is the fight of our lives, this is the generational fight in this new political era,' he told a private meeting of MPs and peers. He said Labour would take on populist nationalism head on. 'A new fight is taking shape,' he said. 'It's a fight between our values and a nationalist politics of the right.' The intervention from the Labour Growth Group comes a day after criticism of the government from another faction, the Red Wall group of Northern and Midlands MPs, who called for a 'break away from Treasury orthodoxy' and a rethink of unpopular cuts such as the winter fuel allowance. Another group, Blue Labour, has also called for a stronger drive to reduce immigration, as well as economic reform. Chris Curtis, the Milton Keynes North MP who chairs the Labour Growth Group, said that the past nine months in power had seen cabinet ministers sometimes acting like 'caretakers of decline' and called for an acceleration of the government's ambition. 'Britain is stuck in a complete economic doom loop. We've had low growth. That's led to pretty awful cuts. It's led to public services that are broken. And it's led to disillusionment and division among the country,' he said. 'Until we get out of that economic doom loop, Nigel Farage is going to become prime minister. I think the stakes are that high.' He said that Whitehall was 'hooked on business as usual and will need shock therapy to get off it … No 10 talks about governing as insurgents, but we're often behaving like caretakers of decline. They have to be more forceful in driving that culture through the system. 'We should be treating the economy as an emergency on the scale of war or the pandemic. The heart of Government meeting in the Cabinet Room every week to smash any obstacle.' His concerns were echoed by Livingston MP Gregor Poynton, also a member of LGG, who said that voters needed to see change was 'still possible'. He said: 'We cannot afford to let stale institutions, cautious regulators, pressure groups or vested interests stand in the way of that.' Kensington and Bayswater MP Joe Powell said the government now needed to step up another gear. 'It's no surprise after years of flatlining wages and living standards people are impatient for change,' he said. 'If we lose the insurgent mindset of opposition the country will continue to decline, so we need to be brave and accelerate making tough but fair decisions, including massively speeding up housebuilding and agreeing new forms of financing, so people don't wait decades for new hospitals.' Curtis said low wage growth, cost of living pressures and huge funding gaps for schools, hospitals and police meant that people were seeing no real improvements in their towns or living standards. 'Unless we start to get the economy growing again, we are not going to get out of this crisis. Farage will rise if wages fall. It's as simple as that,' he said. Curtis said departments need to better stand up to 'vested interests' and to stand up to lobby groups. 'We are now going to have to make often very politically difficult decisions in order to break out of this cycle.' skip past newsletter promotion Sign up to Headlines UK Get the day's headlines and highlights emailed direct to you every morning Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion He said it was now clear that Labour had underestimated the scale of the challenge. 'I think that's probably a fair criticism. But that means that we've got no time to lose in ensuring we break out of this cycle.' But Curtis also said that while the government should tackle high immigration, it would not be the means to beat Farage. 'Anybody that thinks that bringing down net migration alone is a route to re-election is completely kidding themselves,' he said. 'We could get migration down to zero by the time of the next election, but if people still can't get a GP appointment and they're feeling poorer, we're not going to win the next election.' Jake Richards, the Rother Valley MP who is a member of LGG and the Red Wall group, added: 'The only way we're going to beat Nigel Farage is by getting out of the doom loop we inherited of dire public finances leading to unpopular cuts and low wages. That means reversing over a decade of stagnant growth with ambitious reforms. 'We've had polling recently showing that Reform voters are by far the most financially insecure of all the major parties. Putting money in those people's pockets is just as essential as robust immigration policy in showing them Labour can deliver.' Key figures in the different Labour groups plan to increase their coordination in the coming weeks to find consensus on how to apply pressure on the government, with talks expected between the groups over the next few weeks. Top of the list is a renewed drive to pressure reforms to Treasury principles – known as the green book – to force investment outside the south-east of England. Maurice Glasman, the Labour peer and Blue Labour founder, told an event at Policy Exchange that the Conservative party had been destroyed and 'the same fate will befall this government unless it moves into the space the Conservatives vacated'. 'Reform is a working-class insurrection against the progressive ruling class, and the only way to counter it is for the Labour government to lead the insurrection, to celebrate the collapse of the era of globalisation, to embrace the space of Brexit, the renewal of the Commonwealth, the restoration of vocation, the primacy of parliament, the integrity of our peace, the effectiveness of our armed forces, the protection of our borders.'
