Should Rachel Reeves break Labour’s manifesto tax pledges? That’s the question I put to Lucy Powell when I interviewed her in Manchester a month ago. “I’m not here to write an alternative Budget, that’s got to be really clear,” she replied. “The job of deputy leader is not to build some alternative policy programme or manifesto or to write a separate Budget”.
But it hasn’t taken long for Powell, now equipped with her own mandate, to make her views known. Yesterday afternoon she used an interview with Matt Chorley on BBC 5 Live to warn that “if we’re to take the country with us then they’ve got to trust us”, adding that “it’s really important we stand by the promises we were elected on”.
Pressed directly on whether Reeves should keep her pledge not to raise income tax, National Insurance or VAT, Labour’s deputy leader replied: “We should be following through on our manifesto; of course, there’s no question about that.”
It’s a reminder of the freedom that Powell enjoys as the first deputy leader to sit on the backbenches – unbound by collective responsibility – since George Brown in 1970. But her allies insist that this was not an attempt to invade the pitch that Reeves sought to roll this week. “Lucy did say decisions on tax are a matter for the Chancellor and Prime Minister to take in the round,” an aide emphasises. “It is a particularly difficult context, as Rachel said this week, and Lucy will continue to support them on these issues”.
Yet the intervention has caused consternation among those who backed Powell’s rival Bridget Phillipson for deputy leader. “Lucy obviously missed the memo when the whole PLP were asked not to speculate publicly about Budget decisions as even what a backbencher says can be market sensitive,” one Labour MP comments.
Ministers, meanwhile, accuse Powell of indulging in Boris Johnson’s favourite habit of “cake-ism” – proposing spending increases without corresponding tax rises. “The two-child benefit cap should be lifted in full,” Powell said in the same interview – a move that would cost £3.5bn and which Reeves is unlikely to fund in the Budget (instead partially lifting the cap).
It isn’t only Labour’s deputy leader making this argument. Gordon Brown – who met both Powell and Phillipson during the campaign – repeated his call yesterday for the “total abolition” of the two-child limit, describing it as a “stain” on the legislative book. Meanwhile, the soft-left Tribune group, now under the leadership of Powell allies Louise Haigh and Vicky Foxcroft, is also demanding action.
Then there’s Phillipson, who co-chairs the Child Poverty Taskforce, and who is privately pushing Reeves to scrap the cap. “I’ve been consistently clear with colleagues in meetings about what we need to do, what the evidence tells us,” she told me in an interview during the campaign. “I experienced what it was like growing up in poverty, the fact that 4.5 million children are now experiencing the same is a blight on our country, it scars our country.”
It’s a reminder of the scale of the challenge Reeves faces on 26 November. The Chancellor is seeking to appease the bond markets by expanding her slight fiscal headroom of £9.9bn; she is trying to satisfy a restive public that would now prefer spending cuts to tax rises; and she is attempting to manage a fractious parliamentary party. For Reeves, who cannot please all sides, the question is which is the most dangerous to offend.
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