Be bolder or risk being “outflanked” by Tories, Starmer told ahead of Budget

Keir Starmer is facing calls from Labour MPs on the party’s left flank to offer bolder policy alternatives ahead of the Budget this week or risk being “outflanked” by the Conservative government.

Socialist Campaign Group MPs Apsana Begum, John McDonnell and Richard Burgon will join We Own It director Cat Hobbs and a number of trade union leaders at a virtual rally this evening to demand a ‘People’s Budget’.

Burgon will tell the event: “Labour’s leadership has said this must be a 1945 moment – a fork in the road – and I completely agree with that. Something new will replace the pre-crisis economy that was already broken when Covid struck.

“It is our job as the opposition party to lead the debate on what that new economy looks like. To ensure it is an economy that serves the many – not the few. That means our party must step up its opposition to this government.

“In the deepest crisis in decades, Labour needs to be much bolder in offering an alternative. The crisis is now and so the Labour party needs to have answers now on the big issues facing our communities.

“That isn’t counterposed to preparing to win in 2024 – it’s an essential part of it. By showing people day-after-day that we have their backs and we have a better way forward for them.

“And we can’t just sidestep big debates when they happen. The tax debacle of the past few days shows that if we continue to do so, then our party will be outflanked by the Tories with their phoney rhetoric of levelling up.

“It will be our communities that pay the price. Like on so much else, we can win the argument for a progressive tax system – but only if we make the case.”

PCS union’s Mark Serwotka, CWU’s Dave Ward, BFAWU’s Sarah Woolley, Unite’s Steve Turner and ex-MP Laura Pidcock will also be joining the event organised by the Labour Assembly Against Austerity tonight.

The comments from the former Shadow Justice Secretary come as Starmer and members of his shadow cabinet have argued against increasing taxes amid reports that the Chancellor could raise corporation tax in the Budget.

LabourList understands that the Labour leadership believes this is not the time for tax rises, though it would look at any proposal to put up corporation tax over the course of the parliament rather than immediately.

Starmer said in Prime Minister’s Questions that “now is not the time for tax rises on families and businesses”. Shadow ministers Lisa Nandy and James Murray have reiterated the stance, but there are reports of a shadow cabinet split.

One Labour frontbencher told The Guardian last week that the party should not be against a progressive move to increase corporation tax, while three other shadow cabinet sources reportedly said that they backed the current position.

Critics of the position have highlighted that the Labour leader pledged during his leadership campaign to reverse the Tories’ cuts in corporation tax. Some have pointed out that the increase would only affect firms making a profit.

Ian Lavery has remarked that Starmer’s position risks “the grotesque sight of Labour whipped into voting alongside right-wing Tory rebels, to defeat a meagre corporation tax rise that would only affect those who’ve done well out of the pandemic”.

The ex-chair of Labour expressed the view that many people are “questioning what Labour stands for” and that the “trumpeted relaunch has not provided an answer”, referring to Starmer’s speech on his vision for the British economy.

Anneliese Dodds has pushed back on calls for immediate tax rises in the Budget but clarified in an interview on Sunday that the party would “look carefully” at a “long-term plan for getting our country to a better place on corporation tax”.

The Shadow Chancellor declared in a speech today that moves to increase taxes during the Covid pandemic would be “flying in the face of that international evidence” and urged Rishi Sunak to “secure the economy first”.

On the idea that the Tories could freeze income tax thresholds, Dodds said Labour would look at any proposal carefully and pointed out that the best-off have benefited most from personal allowance increases in the past.

Labour is particularly highlighting the effect of local government funding gaps that will force many authorities this year, following a fall in revenue and higher spending during the pandemic, to hike up council tax.