Rayner 'called for child benefits to be clawed back from middle-class families'

22 May 2025, 22:01 | Updated: 23 May 2025, 08:49

Angela Rayner urged Chancellor Rachel Reeves to strip middle-class families of child benefit payments, it has been claimed.

The Deputy Prime Minister asked the Treasury to "claw back" benefits from households where the highest earners salary was between £50,000 and £80,000, according to the Telegraph.

Angela Rayner’s proposal was contained in the same leaked memo, first reported by the newspaper on Tuesday, that revealed Rayner asked Reeves to consider tax rises as alternatives to spending cuts and restricting migrants' access to the state pension and Universal Credit.

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.

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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.

Jeremy Hunt, the former Conservative chancellor, warned Labour against reversing the child benefit changes.

"This may look like a relatively minor budget measure but was one of the most popular things we did because it helped striving middle-class families struggling with childcare costs," Hunt said.

"Abandoning them would finally confirm that far from being a New Labour government, this is a traditional anti-aspiration Old Labour government."

Parents are able to claim £1,355 a year in child benefits for a first child and £897 for any additional children.

There has been no public indication that the Treasury is considering the memo proposal on child benefits.

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”.