Lou Haigh: ‘We need change that spark fights – and a new economic settlement’

Louise Haigh has issued a stark warning to the Labour cabinet she left only months ago, warning Labour’s response to the local elections cannot just be “caution” and “doubling down on unpopular decisions”.

The former transport secretary notably chose to make her first major speech outside Parliament since she left the cabinet last November at a conference held by soft left pressure group Compass today.

In a speech to hundreds of Labour and other progressive activists packed into London night club Ministry of Sound, she called for a “new economic settlement” and warned Labour must be prepared to choose change that “sparks fights”.

‘Conflict clarifies and defines us’

The Sheffield MP said she wanted to talk about what a “radical Labour government” could do, warning that voters are “sick of tinkering”.

“If we’re honest with ourselves: governing is choosing — and too often over the last few months, we have chosen caution and consensus over the boldness voters expect and made clear they want.

“Our destination is clear — a fairer, more equal society — but we need to be braver on the journey. We need to choose change, even when it’s hard. Even when it sparks fights.

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“I would argue especially when it sparks fights. Conflict clarifies and defines us in politics and too often people do not believe we will stand up for them.”

She added: “These local elections were the clearest warning yet. Voters from Doncaster to Durham, from Lancashire to Kent made it clear: they want bold, tangible improvements and lasting change. And when we say we’ll go’“further and faster’, we must be clear that this means action for the better, not just doubling down on unpopular decisions.

 “2029 won’t be any different. It will be a vote for who is capable of delivering radical change.”

We need a ‘proper wealth tax’

She urged the Chancellor to “rip up our self-imposed tax rules – and deliver a proper wealth tax”.

“When the wealthy don’t pay their fair share, everyone else picks up the tab,” she said, adding that a “proper’ wealth tax would reward work, close loopholes and “finally gives us the means to invest in the NHS, schools, and our communities”.

“We must acknowledge that our tax system is perverse. It punishes earned income but barely touches the real driver of inequality – wealth.

“If we do that, we can finally move beyond a broken model where working people’s wages are topped up by tax credits and benefits, leaving bad employers and landlords to profit.

“We can move from a system of handouts for the rich to real investment for everyone else.

But one source said Labour’s first Budget had already meant £300 billion more for our NHS, schools and national infrastructure, whilst at the same time meeting our manifesto promise to protect working people.

The Institute for Fiscal Studies also warned earlier this year warned  “no country in the world has ever successfully had a wealth tax that’s raised serious money”, saying the levy involved major administrative problems.

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