OPINION
Prime Minister Sir Keir Starmer and Deputy Prime Minister Angela Rayner (Image: Getty)
The battle to succeed Sir Keir Starmer is already underway with Angela Rayner positioned as a champion for Labour MPs driven to distraction by Chancellor Rachel Reeves’ cuts and choice of tax hikes. The leak of a raft of tax increases proposed by Deputy Prime Minister Angela Rayner sends a clear signal to MPs tired of defending unpopular polices on the doorstep: Another way is possible.
A canyon of clear red water now flows between Ms Reeves and Ms Rayner. Fans of the latter can point to the memo her department has produced as proof she is fighting behind the scenes for higher taxes on the well-off. The dividing lines of a future Labour leadership contest are clear.
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And the divisions in the party over how to balance the nation’s finances will intensify ahead of both the looming spending review – which may well result in cuts for unprotected departments – and the autumn Budget, which is widely tipped to include new tax increases.
Tory leader Kemi Badenoch says Ms Rayner is on “manoeuvres” and the cabinet is in “open warfare”. Whatever the reality, Labour MPs do not stand for election because they dream of rolling back benefits.
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There is no prospect of an imminent putsch but in Westminster party apparatchiks always have an eye on the succession. It may be a slow-motion race at present but the endless struggle between Left and Right is fuelled by very different visions of what the Labour party should do in power. Ms Rayner's ideas, seen by the Daily Telegraph, are a vision of a Labour party that is not frightened of pursuing the rich.
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Ms Rayner’s “alternative proposals for raising revenue” give an insight into what the Government might do if she was in the top post, and it will delight MPs on the Left who hate defending cuts to benefits and are worried about the hike in employers’ National Insurance Contributions.
Polling in March by Survation for Labour List found that among self-declared Labour members Ms Rayner was the second most popular member of the cabinet, behind Secretary Energy Security and Net Zero Ed Miliband.
The policies suggested in the leaked memo included reinstating the pensions lifetime allowance – which had capped the amount that could be saved in a pension without triggering tax charges at just above ￡1million; freezing the threshold for the additional rate of income tax; increasing the rate of corporation tax banks pay; and scrapping the ￡500 tax-free allowance for dividends.
It is fun to imagine Ms Reeves’s reaction when she read the missive and we can look forward to reading the reply when the documents are eventually opened to the public by the National Archives.
In the meantime, tough questions facing Labour. How does the party unlock investment to truly transform life in Britain?
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Where does it find the cash to deliver social care for an ageing population that will be a source of pride? How does it truly level-up the great expanses of the country which are starched of prosperity?
Today, Labour has a massive majority but the Chancellor is in a perpetual scramble to preserve fiscal headroom. Governments now live in terror of losing the confidence of the markets, and pundits ask whether politicians need to tell the British public that services generations of citizens have taken for granted are no longer affordable.
The stage is set for a passionate and urgent debate within Labour, with the Left and the Right setting out very different visions for what is affordable, desirable and achievable. Ms Rayner is destined to play a leading role in the debate – and her most fervent supporters will hope she becomes the Government’s decision-maker.