Labour’s leadership is currently under intense scrutiny as reports emerge about Deputy Prime Minister Angela Rayner pushing for significant changes to welfare benefits and tax policy.
These proposals, revealed in a leaked memo, have stirred controversy within the party and beyond, with particular focus on child benefits, migrant welfare, and tax hikes targeting middle-income families.
Angela Rayner’s Call to Limit Child Benefits for Middle-Class Families
According to reports, Angela Rayner has urged Treasury officials to consider stripping child benefit payments from middle-class households where the top earner makes between £50,000 and £80,000 annually.
This suggestion would effectively reverse a Conservative policy from March 2024, which had protected around 500,000 families and saved them approximately £1,300 each year.
The leaked memo revealed that Rayner’s proposal was part of a broader plan including eight tax rises, signaling a tough economic approach from Labour.
While the Deputy Prime Minister acknowledged that changing child benefit rules would be contentious, the memo also argued Labour could justify it by pointing out that previous Tory governments never fully funded these benefits in the first place.
Tory Chancellor Jeremy Hunt Warns Against Reversing Benefit Cuts
Jeremy Hunt, the Conservative Chancellor who introduced the child benefit changes, responded firmly to the Labour proposals.
He warned Labour not to reverse the measure, calling it “one of the most popular things” the government did to support struggling middle-class families facing childcare costs.
Hunt described the potential Labour rollback as a move back to “Old Labour” politics that would signal an anti-aspiration stance, contrasting it with the “New Labour” image the party has tried to project.
Rayner Also Targets Migrant Benefits and NHS Charges in Bold New Proposals
The leaked memo went further, showing Rayner’s push to slash benefits for migrants and make it harder for immigrants to claim Universal Credit.
She even suggested increasing the NHS fees that migrants pay — currently set at £1,035 for those on work visas under policies introduced in 2015.
These radical proposals also included potential limits on state pension access, reflecting a hardline approach to welfare reform that some within Labour see as necessary but others find controversial.
Cabinet Chaos and Leadership Ambitions Shake Labour’s Stability
Amid these policy battles, Labour leader Keir Starmer is struggling to manage rising tensions within his Cabinet.
Reports suggest Rayner is positioning herself as a potential alternative leader, quietly distancing herself from unpopular policies to protect her political future.
Starmer recently made an embarrassing U-turn on plans to cut the universal winter fuel payment after a fierce backlash, signaling vulnerability as Labour faces a sharp decline in poll support.
The party is also rumored to be reconsidering the two-child benefit cap in an effort to regain public favor.
Internal Divisions Exposed as MPs Criticize Poor Communication and Strategy
The leaked memo intensified internal divisions, with some Labour MPs openly criticizing the government’s poor communication strategy.
MP Cat Eccles said frustrations have been building for months, blaming advisers and Chancellor Rachel Reeves for not listening to party concerns sooner.
Eccles pointed out that these issues were raised well before local election defeats but were only taken seriously after significant losses, leaving many Labour members feeling disillusioned.
Winter Fuel Payment Cut Haunts Labour’s Electoral Prospects
The winter fuel allowance cut, announced by Reeves shortly after Labour’s electoral victory last year, has been widely blamed for the party’s subsequent collapse in support.
The decision to remove payments from about nine million pensioners was toxic on the doorstep during May’s local elections, contributing to Labour losing councillors and the parliamentary by-election in Runcorn and Helsby.
This policy misstep has led to accusations of infighting within the Cabinet, with left-wing Labour MPs backing Rayner’s tax-focused agenda as an alternative to welfare cuts.
Conservatives have jumped on the perceived chaos, claiming Labour ministers are in “open warfare.”
What Lies Ahead for Labour’s Leadership and Policy Direction?
As Labour attempts to regroup, the party faces tough choices between unpopular welfare cuts and rising tax demands.
The growing divisions and leadership jockeying could shape the next phase of Labour’s approach, with many watching closely to see if Rayner’s ambitions will reshape the party’s direction or deepen its internal conflicts.
For now, Labour’s future remains uncertain as it balances policy challenges, public opinion, and internal power struggles ahead of the next election.