Labour MPs are openly challenging Chancellor Rachel Reeves over planned welfare cuts, urging her to consider wealth taxes as an alternative source of revenue for Britain's strained public finances.
With the Spring Statement looming, backbench pressure is mounting on the Treasury to reconsider proposed benefit reductions that critics say would disproportionately impact disabled people and other vulnerable groups.
"It's all very well for the minister to talk about helping people into work, but is he aware of the many millions of people on PIP who rely on that PIP to work and yet it is the PIP that is going to be slashed as a consequence of the spring statement?" Diane Abbott, Labour MP for Hackney North and Stoke Newington, asked during Treasury questions.
Abbott and other MPs are advocating for a 2% tax on wealth over £10 million, which they claim could raise more than £24 billion - significantly more than the £5 billion projected savings from welfare reforms.
Brian Leishman, Labour MP for Alloa and Grangemouth, added that the public "don't want cuts, they don't want austerity" following the previous Conservative government but instead support "an annual wealth tax on the very wealthiest in society."
Growing Internal Tensions
The rebellion highlights growing tensions within Labour's ranks, with some MPs increasingly uncomfortable about benefit changes that would tighten eligibility criteria for Personal Independence Payments (PIP) and reform the work capability assessment for Universal Credit.
A leaked memo from Deputy Prime Minister Angela Rayner's department revealed that she had previously urged Reeves to increase taxes by £3-4 billion through various measures, including extending the freeze on the threshold at which the 45% tax rate is paid and scrapping the tax-free allowance on dividends.
Neil Duncan-Jordan, Labour MP for Poole, cited polling data suggesting that 77% of the public would prefer the government to "increase taxes on the very richest rather than cut the benefits of the poorest in society."
Chancellor Holds Firm
Reeves has remained steadfast in her approach, insisting that the government needs to "get a grip" on spiraling welfare costs. In response to criticism, Treasury minister James Murray argued that the government had already "made changes to make the tax system fairer" through reforms like changes to non-dom tax status.
The chancellor, who has pledged not to borrow to fund day-to-day public spending, faces difficult choices with growth remaining sluggish and interest rates on government borrowing rising. However, critics argue that cutting benefits for vulnerable groups represents a moral choice rather than an economic necessity.
"Unequal societies grow more slowly than more equal nations, and social mobility collapses in countries riddled with inequality," wrote David Murray in a letter to The Guardian. "Tax reform can address inequality, so is better for growth, and it will raise the money that Reeves says Britain needs. What's stopping her?"
