Labour MPs are urging Chancellor Rachel Reeves to reconsider her welfare cuts and explore alternative economic policies. They argue that a combination of progressive taxation and strategic investment could meet fiscal targets without harming vulnerable communities.
Reeves has repeatedly insisted there is no alternative to her tough budget decisions. She blames a £5bn shortfall on the previous Conservative government and has committed to strict fiscal rules. These include funding day-to-day spending through tax revenues and reducing national debt over five years.
But across Labour’s broad political spectrum, MPs are pushing back. From centrist Red Wall figures to left-wing campaigners, many now argue that deeper welfare cuts are politically risky and economically unsound.
A leaked memo from Deputy Prime Minister Angela Rayner’s office shows internal disagreement. Rayner reportedly proposed £3bn–£4bn in tax increases, while Reeves opted for £5bn in welfare reductions.
Unite the Union and several MPs have proposed a new wealth tax. They say it could raise £25bn by targeting the richest households and ensuring fairer contributions.
Others have called for a return of the 50p top tax rate and aligning capital gains tax with income tax. Backbenchers argue these changes could bring in £12bn annually.
Meanwhile, Red Wall MP Jo White wants to scrap the Treasury’s “Green Book.” She claims it undervalues investment in poorer regions and slows growth.
Peter Lamb, MP for Crawley, raised concerns about planned cuts to Personal Independence Payments. He also criticised the Office for Budget Responsibility for ignoring future savings from employment schemes.
Some MPs are urging Labour to adopt a land tax and increase levies on savings held by high earners. Others back a new windfall tax on companies that profited from pandemic-era contracts.
Former Prime Minister Gordon Brown has joined the call for alternatives. He has proposed doubling taxes on gambling firms, which he says could raise £3bn.
Louise Haigh and other Labour veterans now say it may be time to reconsider the party’s opposition to income tax or national insurance rises. Newer MPs also suggest Labour should make the case that reducing poverty boosts economic activity.
As public support dips and internal pressures grow, Reeves faces mounting calls for an economic reset. Labour MPs insist there is an alternative and demand that the Chancellor start listening.
For more political updates, visit London Pulse News.
