“After a deeply unpopular first year in office, the Labour Government must change direction completely”
By Richard Burgon MP
When people voted for a Labour government last year, they were crying out for change. For over a decade, workers’ wages have stagnated, public services have crumbled, and our social security system has been dismantled piece by piece. But instead of the bold action urgently needed, what we’ve seen are cuts to disability support, a partially reversed cut to the Winter Fuel Allowance, and the continuation of the two-child benefit cap.
Labour was elected on a pledge to develop a strategy to reduce child poverty, yet the two-child benefit cap, the biggest driver of child poverty in the country today, remains in place. It has pushed 300,000 children into poverty, and a further 700,000 deeper into poverty, since it was introduced in 2017.
The Government continues to claim these decisions are about closing a ‘black hole’ in the public finances. But no Labour government should ever try to ‘balance the books’ by forcing sick and disabled people into hardship or condemning children to hunger.
After a deeply unpopular first year in office, the Labour Government must change direction completely. If not, it will continue to lose support, with Labour’s previous supporters staying at home or, as the polls show, mainly switching to other left-of-centre or centre-left parties. Such a collapse of Labour’s voter coalition paves the way for a far-right government at the next election.
Trickle-down in reverse
The super-rich have seen their fortunes soar, while families across the country struggle to heat their homes and put food on the table. Since 2010, billionaire wealth in the UK has more than doubled – from £250bn to over £620bn. And the gap is growing ever wider.
Research shows that more than half the UK’s billionaires did not make their fortunes through productive work or job creation, but through rent extraction – property, inheritance, or financial speculation. Their growing wealth has little to do with building a more successful wider economy to raise the living standards for the majority of people. Instead, it has everything to do with a rigged system designed to funnel wealth to the top while everyone else is told to face the consequences of ‘difficult choices’. Trickle-down economics hasn’t just failed. It’s operated in reverse.
This grotesque inequality blights our society, but it isn’t an accident. It’s the consequence of a broken system that rewards greed and hoards wealth at the top, one in which billionaires push their undue influence on our politics and on our democracy. And people can see what’s happening.
Make the wealthiest pay their fair share
A modest annual wealth tax of just 2% on assets over £10m would raise an estimated £24bn a year to improve ordinary people’s living standards and rebuild our public services. It would affect less than 0.1% of the population. After years of campaigning for wealth taxes, I’m delighted to see this rising up the political agenda. Trade union leaders are increasingly calling for it, MPs are raising it in Parliament, and even former Labour leader Neil Kinnock now backs it.
Of course, the billionaire-owned media try to discredit these proposals, but we’ve seen it all before. A barrage of headlines warned of a millionaire exodus if Labour scrapped the non-dom status, and the Tax Justice Network reported an average 30 stories per day pushing that claim in 2024. But the truth? Just 0.3% of the UK’s 3m millionaires left the country.1 That’s not an exodus; it’s a rounding error. Meanwhile, Patriotic Millionaires UK claims that 80% of millionaires support such a wealth tax.
Wealth taxes are popular because they address the deep inequality in our society. A recent poll reported that three quarters of the population now back an annual wealth tax on assets over £10m. So, despite the continued fearmongering of the rich and powerful, the public overwhelmingly supports making those with extreme wealth pay up.
Labour needs to be at the forefront of offering such progressive alternatives. That means learning the right lessons and breaking with the failed approach of the past year in government. If we don’t, our support will continue to collapse, and a Reform government is waiting in the wings. The threat that poses to our communities could not be more serious.
- This article is from CLPD’s annual briefing, which you can read here.
- Richard Burgon is the MP for Leeds East and the Secretary of the Socialist Campaign Group of MPs. You can follow him on Facebook, Twitter/X, Instagram, Bluesky and TikTok.
- If you support Labour Outlook’s work amplifying the voices of left movements and struggles here and internationally, please consider becoming a supporter on Patreon.
The Development Charge should be revived, back-dated to 1954 and adjusted for inflation.
The Development Charge was introduced when the Labour government, under Attlee, nationalised land in 1947. It was abolished by the Tories in 1954.