Leaked memo reveals Rayner called for tax rises

Deputy Prime Minister Angela Rayner's department called for Chancellor Rachel Reeves to increase taxes prior to this year's Spring Statement.

A memo - seen by the Daily Telegraph - appeared to urge Reeves to raise taxes by £3bn to £4bn a year through various measures, which the chancellor did not implement. She has repeatedly pushed against raising taxes and instead announced £5bn of welfare cuts in March.

Government insiders said it was not unusual for discussion papers to be informally exchanged between departments without sign-off by ministers.

While the Spring Statement has been and gone, arguments in the Labour party persist ahead of departmental spending plans being set out in June.

Those on the left of the party in particular have been arguing that cuts to some departments could be averted if Reeves introduced a wealth tax or relaxed her rules on borrowing and debt. She has pledged not to borrow to fund day-to-day spending.

The Conservatives, meanwhile, urged the Chancellor to rule out tax increases in the Autumn budget.

Inside the memo were a series of proposals that included alternative measures such as increasing the rate of corporation tax on banks.

It suggested extending the freeze on the threshold at which the 45% tax rate is paid to include more people in the higher bracket and scrapping the tax-free allowance on dividends.

It also called for the lifetime pensions allowance to be reinstated, which puts a cap on how much savers could put into their pension before higher tax is applied.

This allowance was scrapped under the Conservative government and while Labour had made plans to reinstate it before last year's general election, they reversed the decision before publishing the party's manifesto.

Speaking to The Telegraph, Conservative Shadow Chancellor Mel Stride said that the note "confirms that we are still living with the Labour Party of Jeremy Corbyn".

"At the very highest level, Labour ministers are debating which taxes to increase next," he added.

"The Chancellor has repeatedly refused to rule out another tax raid in the autumn, and now we know why - Labour's top brass, including the Deputy Prime Minister, want to come back for more."

A government spokesperson told PA Media "we don't comment on leaks".