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Deputy Labour leader Lucy Powell has said the party must stand by its commitment to not raise income tax, VAT or national insurance as chancellor Rachel Reeves hints she is preparing to breach a promise made in its manifesto.
In her first major intervention since being elected two weeks ago, Powell told the BBC there was “no question” the party had to stick to the pledges made in its manifesto, as “trust in politics was essential”.
“It’s really important we stand by the promises we were elected on and do what we said,” Powell told BBC 5 Live on Thursday.
Powell, who has accused her party of not being “bold enough”, has said the prime minister Sir Keir Starmer should listen more to MPs and activists.
She urged the government on Thursday to lift the two-child benefit cap “in full”, despite indications Reeves is hesitant about raising spending.
Allies of Starmer were dismayed by Powell’s comments, which they saw as an attempt to box in Reeves ahead of her Budget on November 26
“It has echoes of Andy Burnham,” said one ally of the prime minister, referring to the Manchester mayor’s claim last month that the government needed to stop being “in hock to the bond markets”.
“She’s talking about raising welfare spending too but where’s the money coming from?” said the ally.
Powell won the deputy Labour leadership after being sacked by Starmer as Leader of the House in September in a reshuffle following the resignation of Angela Rayner, the previous deputy, for underpaying stamp duty.
She beat education secretary Bridget Phillipson to the position, who was widely viewed as the government’s choice.
During a pre-Budget speech on Tuesday, Reeves said the party has “got to do the right thing” when faced with questions over whether she would breach the manifesto even if it proved unpopular with the public.
However, some in the party doubt whether Reeves will raise income tax amid warnings that going back on her word could shatter trust with voters and cement Reform UK’s popularity ahead of local elections next year.
One option under consideration is raising income tax by 2 per cent while cutting National Insurance by the same amount — a move that arguably would get round Labour’s pledge not to raise taxes on working people.
Such a move would take more tax from wealthier pensioners, whose pension withdrawals are not subject to National Insurance.
