Angela Rayner has encouraged Rachel Reeves to strip middle-class families of child benefits payments, it has been claimed.
The Labour Deputy Prime Minister urged the treasury to ‘claw back’ the benefit from families where the top earner’s annual salary was somewhere between £50,000 and £80,000, The Telegraph first reported.
If taken forward, the decision would undo an announcement by the Tories in March 2024 that was predicted to save 500,000 families around £1,300 per year.
Ms Rayner’s suggestion was reportedly contained in the same leaked memo, in which the Deputy PM proposed eight tax rises.
Ms Reeves faced criticism this week after details of the memo were revealed and Prime Minister Sir Keir Starmer announced an about-turn on her abolition of the universal winter fuel payment.
The memo accepted that the change to child benefit rules would be ‘contentious’ but added Labour could argue that the Tories had never properly funded the policy to begin with.
Jeremy Hunt, the Conservative chancellor who announced the change in 2024, urged Labour not to reverse it.
Angela Rayner (pictured) has encouraged Rachel Reeves to strip middle-class families of child benefits payments, it has been claimed
Rachel Reeves (pictured) faced criticism this week after details of the memo were revealed and Prime Minister Sir Keir Starmer announced an about-turn on her abolition of the universal winter fuel payment
‘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.
‘Abandoning them would confirm that far from being a New Labour government, this is a traditional anti-aspiration Old Labour government.’
It comes as Ms Rayner called for migrant benefits to be slashed and urged Ms Reeves to make changes, it was reported yesterday, after the Deputy PM challenged the Chancellor’s economic approach.
Bold proposals, outlined in the leaked memo, also suggested making it harder for immigrants to receive Universal credit.
Ms Rayner even said Labour should raise the fee migrants pay to use the NHS, in policies she and her team claimed were ‘contentious’ but still ‘worthy of consideration’.
Under current policies, introduced under the Tories in 2015, foreigners on work visas pay to access healthcare – a fee currently set at £1,035.
The ‘radical’ policies further included limiting access to the state pension.
It comes as Keir Starmer was struggling to quell chaos in his Cabinet yesterday amid claims Rayner is jockeying to replace him.
The PM signalled an extraordinary U-turn on cuts to winter fuel allowance on Wednesday as he bowed to a growing revolt on his benches.
And the humiliating move could only be the start with signs Sir Keir is also considering giving ground on the two-child benefit cap, amid alarm at Labour’s poll plunge.
The pressure intensified as it emerged Ms Rayner’s office wrote to embattled Chancellor Rachel Reeves in the Spring urging her to hike taxes again instead of cutting welfare.
The Deputy PM’s aides have denied leaking the memo, and argued that such discussions are routine within government.
However, some Labour MPs believe that Ms Rayner is ‘on manoeuvres’ to ensure she does not have ‘blood on her hands’ from failed policies.
‘Angela has been loyal in public but she knows she needs to distance herself from some of the unpopular policies,’ one backbencher told The Times.
‘Starmer is not under any kind of threat now but if things have not improved closer to the next election that could change. Angela is ambitious and she needs to be credible if she is to present herself as the candidate of the left.’
Labour MP Cat Eccles admitted the government’s communications had been ‘really poor’, suggesting she blamed the PM’s advisers and Ms Reeves for not ‘listening’.
‘It’s annoying that we did raise these exact concerns at the time. And it’s only now or down the line after we’ve had those local election results, as you say, that all of a sudden, they’re all ears to their MPs,’ she told Times Radio.
‘Oh, what do you think the issues are? It’s like, well, actually, we told you months ago. So I think there’s a lot of us that are feeling slightly less buoyant than we did back in July last year.’
The winter fuel allowance move was seen as an humiliation for Ms Reeves – who is at a G7 meeting in Canada.
Stripping around nine million pensioners of the payments was one of the first announcements the Chancellor made after Labour’s landslide election victory last year.
But it has been widely blamed for the party’s disastrous collapse in support.
Labour campaigners reported it was toxic on doorsteps during May’s local elections, which saw the party lose councillors and the Runcorn and Helsby Parliamentary by-election.
Left-wing Labour MPs rallied behind Ms Rayner’s push on targeting taxes instead of welfare, prompting the Tories to claim that the Cabinet was in ‘open warfare’.
