UK politics live: Rayner ‘urged Reeves’ to raise taxes on wealthy pensioners in secret memo

Inflation has rocketed to its highest level in more than a year after “awful April” bill rises, but pressure is also mounting on the Chancellor over the impact of Labour’s recent tax hike on the cost of living.

Official figures show Consumer Prices Index (CPI) inflation jumped to 3.5% in April, up from 2.6% in March and the highest since January 2024.

It comes after Ofgem’s energy price cap rose by 6.4% in April, having fallen a year earlier, alongside a raft of bill rises for under-pressure households – including the biggest increase to water bills since at least February 1988.

Households were also hit with steep increases across bills for council tax, mobile and broadband tariffs, as well as road tax.

But experts said inflation may also have been pushed higher as many firms responded to the Government’s move to raise national insurance contributions (NICs) and the minimum wage last month by increasing prices.

Chancellor Rachel Reeves acknowledged her policies have “consequences” but insisted they are necessary to stabilise the economy.

Shadow chancellor Sir Mel Stride blamed Labour’s “damaging” tax increase for the rise in inflation and said “families are paying the price for the Labour Chancellor’s choices”.

The Liberal Democrats also took aim at Labour, warning the cost of living could spiral out of control unless Ms Reeves reverses her decision to increase employer NICs.

Our Political Editor David Maddox reports:

Sir Keir Starmer has been urged by more than 100 MPs and peers to “deploy every tool” to help free jailed British-Egyptian activist Alaa Abd El-Fattah, who has been on hunger strike for over 80 days.

In a letter to the Prime Minister, the cross-party group said the case was at a “vital stage” and action was needed to protect the health of both Mr Abd El-Fattah and his mother, Laila Soueif, who has also resumed a full hunger strike after consuming only liquid supplements since March.

Mr Abd El-Fattah, 43, has been imprisoned in Egypt since September 2019. He was sentenced in 2021 to five years for allegedly spreading false news, but MPs argue he is a political prisoner and should be released after serving his term.

The letter expresses concern over Mr Abd El-Fattah’s deteriorating health, with symptoms including vomiting, stomach pain, and blurred vision. It also highlights the worsening condition of his mother, who has been on hunger strike since September 2024 and has lost 42 per cent of her body weight.

Sir Keir previously raised the case with Egyptian president Abdel Fattah El-Sisi in February, but MPs say there has been a lack of “concrete progress”.

They warn that failure to resolve the case could harm the UK-Egypt relationship and wrote: “If the health of Laila or Alaa is further damaged by this ordeal, this would have serious long-term implications.”

They concluded: “We urge you to deploy every tool at your Government’s disposal. Time is desperately short. We remain gravely concerned about the implications for Alaa’s family if a resolution is not found soon.”

The latest poll from More in Common has put Reform UK support at 30 per cent – the highest ever.

Labour is trailing eight points behind at 22 per cent, while support for the Tories has gone up one point to 21 per cent.

Meanwhile, Sir Keir Starmer’s net approval rating is -38, while Kemi Badenoch is -25, according to More in Common.

The union at the centre of the long-running Birmingham bin strike has accused government commissioners of “sabotaging” talks aimed at resolving the dispute.

Members of Unite have been on all-out strike for more than two months in a row over pay and jobs, leading to bins piling up across the city.

The conciliation service Acas has been involved in talks since the start of the month, but the dispute remains deadlocked.

Unite said the talks set out a clear timeline for a discussed offer to be tabled by the council, but it claimed no offer has been made.

A ministry of housing, communities and local government spokesperson said: “It is simply false to suggest the commissioners, or the leader of the council have blocked attempts to resolve this deal, and we continue to urge Unite to suspend its strike action and both parties to reach agreement on a fair and reasonable offer.”

A council spokesman said: “The council remains committed to seeking a negotiated settlement to end the dispute.”

The work and pensions secretary will stand firm on Labour’s £5 billion plans for welfare cuts on Wednesday, arguing that reform is needed to make sure the system survives.

Liz Kendall is expected to say there is a “risk” the welfare state would collapse without the proposed changes, which include tightening the eligibility criteria for the main disability benefit in England, the personal independence payment (Pip).

Restricting Pip would slash benefits for about 800,000 people, while the sickness-related element of universal credit is also set to be cut.

The package of measures is aimed at reducing the number of working-age people on sickness benefits, which grew during the pandemic and has remained high since.

The government hopes the proposals can save £5 billion a year by the end of the decade, and appears intent to press ahead with the plans amid mounting opposition.

Some 100 Labour MPs – more than a quarter of the party’s parliamentary numbers – are reported to have signed a letter urging ministers to scale back welfare cuts under consideration.

In a separate, earlier letter, 42 MPs said the cuts were “impossible to support”.

Angela Rayner reportedly suggested reinstating the pensions lifetime allowance and changing dividend taxes in a memo to the chancellor with ideas to raise revenue.

The deputy prime minister sent the suggestions, in a document that estimated the changes could raise £3 billion to £4 billion a year, to Rachel Reeves in March ahead of the spring statement, The Telegraph reported.

The Chancellor has been adamant she will not turn to tax rises as part of the Government’s efforts to fund its policies.

There have been reports that Ms Rayner has been pushing back against spending cuts behind the scenes.

rayner Ms Rayner’s suggestions, in a memo titled “alternative proposals for raising revenue”, reportedly included reinstating the lifetime pensions allowance, which limited how much savers could put put in their pension pot before incurring a higher tax charge and was abolished under the Tories.

Ending the inheritance tax relief on shares for the Alternative Investment Market, raising the bank surcharge to 5%, and freezing the additional rate income tax threshold above £125,140 so more people would be dragged into a higher band were also among the proposals.

She also floated closing the commercial property stamp duty loophole and increasing the annual tax on enveloped dwellings, as well as raising rates on dividend taxes to bring them closer to income tax and removing the tax-free dividend allowance.