Labour should stick to manifesto pledges on tax, deputy leader says

Labor must stick to its manifesto pledge not to raise significant taxes, the party’s new deputy leader, Lucy Powell, has said.

Ahead of last year’s general election, Labor promised not to increase taxes on “employees”, including National Insurance, Income Tax and VAT.

Asked whether it would be acceptable to break that promise, Powell told Matt Chorley on BBC 5 Live: “Of course we have to follow our manifesto. There’s no question about that.”

In a statement from Powell’s team following the interview, it was stated that the “context” of this Budget was “particularly difficult” and that it would continue to support the chancellor and the Prime Minister on these issues.

While Chancellor Rachel Reeves is expected to increase taxes in her budget this month, the government has repeatedly refused to rule out an income tax increase.

Economists say Reeves may need tax increases totaling up to £30bn to meet his fiscal rules by a comfortable margin.

Pressed about how important it was for Labor to stick to its manifesto promises, Powell told Matt Chorley on BBC Radio 5 Live: “If we’re going to take the country with us then they need to trust us.”

“We want to make sure that ordinary working people are better off as a result of this Labor government, and we’re putting more money into the pockets of ordinary working people,” he said.

“That’s what the manifesto commitment is all about. And I’m sure that’s what this Budget will be about.”

He added: “It’s really important that we stand by the promises we made when we were elected and do the things we said we would do.”

Powell also called for the “complete” removal of the two-child benefit limit, saying it was the only way to ensure child poverty would be significantly reduced over the course of Parliament.

He added that the issue was “urgent” because at least 40,000 children were “plunged into deep poverty as a result” of the policy each year.

The government is facing growing pressure from its own MPs to lift the cap limiting child tax credit and universal credit to the first two children in most households.

Reeves is expected to make changes to the upper limit he has placed on the Conservative Party’s budget.

However, experts estimate that completely scrapping the plant would cost around £3.5bn a year.

Other options reportedly being considered by the Treasury include increasing the cap to cover three or four children, exempting families where at least one adult works, or reducing benefits for the third and subsequent children.

Campaigners have called for it to be scrapped altogether, arguing it would be the most cost-effective way to reduce child poverty.

Powell was elected deputy leader of the Labor Party last month. He beat Education Minister Bridget Phillipson.

The former House of Commons leader, who was sacked from Sir Keir Starmer’s cabinet in September, has vowed to give party members a louder voice and won the support of those unhappy with the course of his leadership.

Powell said during his campaign that being outside the Prime Minister’s cabinet allowed him greater freedom to speak out against government policy.

As deputy leader, he sits on Labour’s powerful National Executive Committee and acts as a link between party members and the leadership.

However, unlike his predecessor Angela Rayner, he was not given the post of deputy prime minister as well as the party post, but Justice Minister David Lammy was chosen instead.