Labour has been plunged into an internal civil war just days after its landslide election victory, with the party's new deputy leader Ellie Reeves issuing a stark warning to the Left about the government's tax commitments.
Manifesto Promise Sparks Internal Clash
In a dramatic intervention that exposes deep divisions within the new government, Reeves emphatically declared that Labour will not raise income tax, National Insurance, or VAT despite mounting pressure from the party's left flank to raid the wealthy.
The clash centres around Labour's election manifesto pledge that ruled out increases to the main rates of taxation—a commitment now causing significant friction within the party's ranks.
Left-Wing Demands for Wealth Taxes
Left-wing MPs and campaigners are demanding the government abandon its cautious approach and implement more radical policies, including:
- Wealth taxes targeting the super-rich
- Immediate abolition of the controversial two-child benefit cap
- Substantial increases to public spending
However, Reeves pushed back forcefully, telling the BBC's Today programme: "We were very clear in our manifesto that we are not going to be increasing income tax, National Insurance or VAT, and that stands."
Benefit Cap Controversy Deepens Rifts
The two-child benefit cap has emerged as a particularly contentious issue, with critics arguing it pushes families into poverty. The policy prevents parents from claiming child tax credit or Universal Credit for their third or subsequent children born after April 2017.
Despite pressure from within her own party, Reeves defended the government's position, stating: "We have been clear that our focus is on growing the economy." She emphasised that economic growth rather than tax hikes would be the primary mechanism for funding public services.
Warning Shot to Labour's Left
The deputy leader's comments represent a direct challenge to figures like Momentum co-chair Hilary Schan, who warned that "now is the time to be bold" and that sticking to "Tory spending limits" would be a historic mistake.
This internal conflict reveals the substantial challenges facing Sir Keir Starmer's government as it attempts to balance fiscal responsibility with demands for radical social reform from its own supporters.
The coming weeks will test whether Labour can maintain party unity while delivering on its election promises without alienating either its moderate supporters or its traditional left-wing base.
