Cabinet minister declines to rule out tax rises after welfare concessions, saying there’ll be ‘financial consequences’
A cabinet minister has declined to rule out tax rises after Labour’s welfare concessions to backbench rebels.
Pat McFadden told BBC Breakfast he is “not going to speculate” on what could be in the budget, due in the autumn, but said that ministers “will keep to the tax promises” in their manifesto.
Labour faces renewed speculation over its tax plans after concessions to the party’s welfare rebels left a £4.8bn hole in Rachel Reeves’s spending plans.
Asked whether economists were right that tax rises look likely, the chancellor of the duchy of Lancaster told the programme:
This is one moving part of the budgetary picture, it does have a financial consequence yesterday.
I’m not going to speculate on where the budget lands, because there are so many other different moving parts in it, and it wouldn’t make sense for me to do that.
Asked explicitly whether he could rule out tax rises, McFadden said:
I’m not going to speculate on the budget.
We will keep to the tax promises that we made in our manifesto when we fought the election last year. But it doesn’t make sense for me to speculate on something where, as I say, there are so many moving parts of which this is only one element.
Separately, McFadden told Times Radio that there will be “financial consequences” to the government’s concessions to welfare rebels.
He told Times Radio:
This is a decision that will have financial consequences. The process of the last couple of weeks does have financial consequences.
They will all be taken together with all the other moving parts that there are in the economy, in the fiscal picture at the budget, and that will be set out at the time. But I’m not denying that when you set out on a plan that has a cost attached to it, and then you have to change that or take it forward in slower time, that is a decision with financial consequences.
MPs voted through the government’s welfare bill by 335 votes to 260 – a majority of 75.
The concessions, including the last-minute shelving of plans to restrict eligibility for personal independence payments (Pip), were enough to head off the government’s first Commons defeat on Tuesday evening. But they also removed a key plank of Keir Starmer’s welfare reform agenda, delaying changes to Pip until after a review of the benefit not due to conclude until autumn 2026.
More on this in a moment, but first, here are some other developments:
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Ministers should be looking at measures around wealth taxes or capital gains tax, a leading backbench rebel has suggested, after concessions left a hole in the chancellor’s spending plans. Rachael Maskell told BBC Radio 4’s Today programme that “we need to look at those with the broader shoulders”.
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MPs will debate legislation today to ban Palestine Action. A draft order was laid before parliament on Monday to amend the Terrorism Act 2000 to include Palestine Action as a proscribed organisation, making membership and support for the direct action group illegal. If approved, it would become a criminal offence punishable by up to 14 years in prison. It is expected MPs and peers will debate the legislation over Wednesday and Thursday and, if approved, the ban could come into force by Friday.
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Children should not be detained in custody unless arrested for a serious crime and strip-searched only under truly exceptional circumstances, two parliamentary reports have said. Harrowing testimonies of children in England and Wales who were strip-searched and who accused police of racism and making damaging, disrespectful comments are included in the research for the all-party parliamentary group (APPG) on children in police custody.
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Twelve of England’s regional mayors have signed up to an unprecedented plan to create a “national active travel network”, focusing initially on helping children to walk, cycle or scoot to school safely. The scheme, which involves all non-London regional mayors other than one from Reform UK, is intended to fit into wider efforts to devolve transport planning, working with Active Travel England (ATE) to implement schemes they think would help their area.
Key events
Ministers should be looking at measures around wealth taxes or capital gains tax, a leading backbench rebel has suggested.
Rachael Maskell told BBC Radio 4’s Today programme that “we need to look at those with the broader shoulders”.
Asked what she would say to those who are worried about public finances, Maskell said:
As am I worried about the state of the public finances, and of course, we know what we inherited a year on, we have still got to keep our focus there.
And that’s why I think we heard very much in the debate, including from myself, that we need to look at those with the broader shoulders, as the prime minister said, contributing more into our system, but never pushing down on the poorest.
And that was what the dynamic was yesterday, that we do need to look at things like a wealth tax, £24bn, or equalisation of capital gains tax.
Here is our news story on the welfare bill being voted through yesterday:
And our interactive which shows how your MP voted:
How did your MP vote on welfare bill?
What happened yesterday with the welfare bill?
In case you missed yesterday’s political developments, here is a handy summary from my colleague Andrew Sparrow:
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MPs voted through the government’s welfare bill by 335 votes to 260 – a majority of 75 – after a rebel amendment to kill off the bill was defeated easily after concessions over planned Pip cuts.
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The work and pensions secretary, Liz Kendall, ruled out resigning in her interview with Chris Mason, the BBC political editor, saying she wanted to carry on despite her bill only passing after multiple U-turns.
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After a week of chaos that left the prime minister’s political authority badly damaged, Labour MPs were finally won over by a commitment to shelve plans for deep cuts to personal independence payments (Pip)
Ministers’ concessions on the welfare bill signalled a “change in power between the prime minister” and disabled people, one of the leading backbench rebels has suggested, reports the PA news agency.
Rachael Maskell told BBC Radio 4’s Today programme that Tuesday saw “the bill disintegrating before our eyes”.
“Even in the last moments of the debate, when the minister was winding up, we heard that other sections of the bill will be removed that’s appertaining to Northern Ireland,” she said, adding:
And I think throughout the day, what we saw was a change in power between the prime minister and his government and disabled people across our country, they having their voice at the heart of parliament, and that’s why I put the reasoned amendment down.
The York Central MP also said that she is “glad” that the debate was “had in public” and “now disabled people should feel empowered to have their voice at long last in an ableist parliament”.
Cabinet minister declines to rule out tax rises after welfare concessions, saying there’ll be ‘financial consequences’
A cabinet minister has declined to rule out tax rises after Labour’s welfare concessions to backbench rebels.
Pat McFadden told BBC Breakfast he is “not going to speculate” on what could be in the budget, due in the autumn, but said that ministers “will keep to the tax promises” in their manifesto.
Labour faces renewed speculation over its tax plans after concessions to the party’s welfare rebels left a £4.8bn hole in Rachel Reeves’s spending plans.
Asked whether economists were right that tax rises look likely, the chancellor of the duchy of Lancaster told the programme:
This is one moving part of the budgetary picture, it does have a financial consequence yesterday.
I’m not going to speculate on where the budget lands, because there are so many other different moving parts in it, and it wouldn’t make sense for me to do that.
Asked explicitly whether he could rule out tax rises, McFadden said:
I’m not going to speculate on the budget.
We will keep to the tax promises that we made in our manifesto when we fought the election last year. But it doesn’t make sense for me to speculate on something where, as I say, there are so many moving parts of which this is only one element.
Separately, McFadden told Times Radio that there will be “financial consequences” to the government’s concessions to welfare rebels.
He told Times Radio:
This is a decision that will have financial consequences. The process of the last couple of weeks does have financial consequences.
They will all be taken together with all the other moving parts that there are in the economy, in the fiscal picture at the budget, and that will be set out at the time. But I’m not denying that when you set out on a plan that has a cost attached to it, and then you have to change that or take it forward in slower time, that is a decision with financial consequences.
MPs voted through the government’s welfare bill by 335 votes to 260 – a majority of 75.
The concessions, including the last-minute shelving of plans to restrict eligibility for personal independence payments (Pip), were enough to head off the government’s first Commons defeat on Tuesday evening. But they also removed a key plank of Keir Starmer’s welfare reform agenda, delaying changes to Pip until after a review of the benefit not due to conclude until autumn 2026.
More on this in a moment, but first, here are some other developments:
-
Ministers should be looking at measures around wealth taxes or capital gains tax, a leading backbench rebel has suggested, after concessions left a hole in the chancellor’s spending plans. Rachael Maskell told BBC Radio 4’s Today programme that “we need to look at those with the broader shoulders”.
-
MPs will debate legislation today to ban Palestine Action. A draft order was laid before parliament on Monday to amend the Terrorism Act 2000 to include Palestine Action as a proscribed organisation, making membership and support for the direct action group illegal. If approved, it would become a criminal offence punishable by up to 14 years in prison. It is expected MPs and peers will debate the legislation over Wednesday and Thursday and, if approved, the ban could come into force by Friday.
-
Children should not be detained in custody unless arrested for a serious crime and strip-searched only under truly exceptional circumstances, two parliamentary reports have said. Harrowing testimonies of children in England and Wales who were strip-searched and who accused police of racism and making damaging, disrespectful comments are included in the research for the all-party parliamentary group (APPG) on children in police custody.
-
Twelve of England’s regional mayors have signed up to an unprecedented plan to create a “national active travel network”, focusing initially on helping children to walk, cycle or scoot to school safely. The scheme, which involves all non-London regional mayors other than one from Reform UK, is intended to fit into wider efforts to devolve transport planning, working with Active Travel England (ATE) to implement schemes they think would help their area.
