Labour should stick to manifesto pledge on tax, deputy leader says

Lucy Powell was elected as Labour's deputy leader last month

Labour should stick to its manifesto pledge not to raise key taxes, the party's new deputy leader Lucy Powell has said.

Ahead of last year's general election, Labour promised not to increase taxes on "working people", including National Insurance, Income Tax and VAT.

Asked whether it would be acceptable to break this promise, Powell told the BBC: "We should be following through on our manifesto, of course. There's no question about that."

Chancellor Rachel Reeves is widely expected to increase taxes in her Budget this month, with the government repeatedly refusing to rule out an income tax hike.

Economists say Reeves may need tax rises totalling as much as £30bn to meet her financial rules by a comfortable margin.

Pressed over how important it was for Labour to stick to its manifesto promises, Powell told Matt Chorley on BBC Radio 5 Live: "If we're to take the country with us then they've got to trust us."

"We want to make sure that ordinary working people are better off as a result of this Labour government and we're putting more money back into the pockets of ordinary working people," she said.

"That's what that manifesto commitment is all about. And that's what this Budget will be about I'm sure."

She added: "It's really important we stand by the promises that we were elected on and that we do what we said we would do."

Powell also called for the two-child benefit cap to be lifted "in full", saying this was the only way to ensure child poverty falls significantly over the course of the Parliament.

She added that the issue was "urgent" because every year the policy is in place at least 40,000 children "are pushed into deep levels of poverty as a result".

The government has been facing growing pressure from its own MPs to lift the cap, which restricts child tax credit and universal credit to the first two children in most households.

Reeves is expected to make changes to the cap, which was introduced by the Conservatives, in her Budget.

However, experts estimate that scrapping it completely would cost around £3.5bn a year.

Other options reportedly being considered by the Treasury include raising the cap to cover three or four children, exempting families where at least one adult is in work or reducing benefits for third and subsequent children.

Campaigners have called for it to be abolished in full, arguing this would be the most cost-effective way to reduce child poverty.

Powell was elected as Labour's deputy leader last month, beating Education Secretary Bridget Phillipson.

The former Commons leader, who was sacked from Sir Keir Starmer's cabinet in September, has promised to give party members a louder voice and drew support from those dissatisfied with the direction of his leadership.

Powell said during her campaign that being outside of the PM's cabinet gives more freedom to speak out against government policy.

As deputy leader she sits on Labour's powerful National Executive Committee and acts as a link between party members and the leadership.

However, unlike her predecessor Angela Rayner she was not given the role of deputy prime minister alongside her party job, with Justice Secretary David Lammy chosen instead.

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