Labour’s civil war looks to be intensifying today amid claims Angela Rayner pushed to strip child benefit from middle-class families.
The Deputy PM suggested the Chancellor should ‘claw back’ the handouts from families where one adult earns over £50,000 a year.
The manoeuvring emerged amid more evidence of tensions within Labour about how to balance the books and prioritise spending.
The PM, who announced an humiliating U-turn on winter fuel allowance earlier this week, is said to be ready to ease the two-child benefit cap amid a massive revolt by MPs.
However, his chief of staff Morgan McSweeney has apparently urged the premier to hold firm, pointing to the £2.5billion cost. Downing Street sources flatly dismissed the Bloomberg report.
Labour’s Welsh leader, Baroness Morgan today waded into the winter fuel row, calling for ‘the majority’ of pensioners to get the handouts worth up to £300. Nine million older people were stripped of the payments by Ms Reeves last year, and it is not yet clear what the new arrangements will be.
The mooted child benefit move would have effectively reversed a more generous Tory policy, meaning that the cash is gradually reduced for earners between £60,000 and £80,000.
It was floated by Ms Rayner’s office alongside a range of tax hike and spending cut options ahead of the Spring Statement.
A memo to Rachel Reeves proposed targeting pensioners and shares instead of curbing the spiralling benefits bill.
In the end Ms Reeves largely ignored the ideas and went ahead with a package to trim welfare – but dozens of Labour MPs are now threatening to revolt in a looming vote.
The document 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.
Tory former chancellor Jeremy Hunt urged Labour not to reverse the policy.
‘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,’ he told the Telegraph.
‘Abandoning them would confirm that far from being a New Labour government, this is a traditional anti-aspiration Old Labour government.’
Allies of Ms Rayner have insisted memos proposing policy options are routine in government, and are not always signed off by ministers personally.