Rayner called for 'alternative' to spending cuts and curb on migrant benefits, leaked memo reveals
21 May 2025, 23:25
Deputy Prime Minister Angela Rayner urged Chancellor Rachel Reeves to consider tax rises as alternatives to spending cuts and restricting migrants' access to the state pension and Universal Credit.
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In the memo, obtained by The Daily Telegraph, Rayner also suggested raising the fee immigrants must pay for using the NHS.
The memo was submitted in mid-March, before the Spring Statement, and contained proposed tax rises on savers and investors as alternatives to the Chancellor's spending cuts.
In the document, Rayner set out a series of "alternative proposals for raising revenue" and said that the plans would be “popular, prudent and would not raise taxes on working people”.
The proposed measures include reinstating the pensions lifetime allowance, changing dividend tax and a higher corporation tax level for the banks.
Conservative leader Kemi Badenoch said of the leaked memo at Prime Minister's Questions on Wednesday: "He has lost control of the economy. He has lost control of his Cabinet."
"She [Rayner] is sitting there staring at me. She knew exactly what she was doing when she briefed that into the papers."
“She is demanding eight new tax rises as if we haven’t suffered enough. People out there are struggling, businesses are struggling... we cannot have more tax rises. Will the Prime Minister rule out new tax rises this year?”
Sir Keir said: “She wants to talk about the Deputy Prime Minister."
“The Deputy Prime Minister is working with the Chancellor, building 1.5 million new homes, reforming our planning system, putting £7 billion into our economy and bringing forward our employment rights Bill which is the single biggest upgrade to workers’ rights in a generation.”
At Prime Minister's Questions Sir Keir Starmer announced a U-turn on cuts to pensioners' winter fuel allowance.
MPs are calling for the Prime Minister to go further, backing Rayner's call for a tax raid on savers and urging him to scrap planned welfare cuts.
Steve Reed, the Environment Secretary, denied the Cabinet was split on Labour’s economic approach and insisted Sir Keir’s top team was “united”.
