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A new group of Labour MPs are pushing Chancellor John Healey to prioritise pro-business policies at next week’s Budget.
The group, which includes former cabinet ministers who lost their jobs when Andy Burnham replaced Keir Starmer in July, met on Tuesday to discuss what they want the government to prioritise in its forthcoming economic plans, PoliticsHome understands.
Steve Reed, the former housing secretary, told PoliticsHome: “Voters want immediate help with the cost of living, but they also want to see a credible plan to grow the economy.
“That means backing businesses to create jobs and putting more money in people’s pockets. That’s what the Chancellor needs to deliver in next week’s Budget.”
Around 30 Labour MPs attended the meeting, including Reed, former chief secretary to the prime minister, Darren Jones, and ex-business secretary, Peter Kyle. Last month, The House magazine reported that the backbench group had started meeting regularly in Westminster after leaving their ministerial positions in the summer.
The group wants the Andy Burnham government to reduce costs for business and is pressing Healey to stick with plans not to increase capital gains tax at the Budget, arguing it would damage growth and investment.
Speaking to The Times this week ahead of the Budget, Healey said he would use his first fiscal event as Chancellor to support “bloody-minded” entrepreneurs, admitting that companies are currently facing “a lot of pressure”.
On Tuesday, the MPs were presented with recent polling which attendees said showed that Labour could not afford to be viewed by the public as weak on fiscal credibility.
The research, carried out by consultancy Public First in September and seen by PoliticsHome, found that less than a third (29 per cent) of voters believe Labour has a clear plan for the economy. Around a quarter (26 per cent) told the survey of 3,045 adults that Labour is good for business, while a similar share (23 per cent) said Labour is good for their personal finances.
Over a quarter of Labour voters surveyed (28 per cent) said they would be less likely to support the party should the pound fall sharply and borrowing costs spike.
Kyle, the Labour MP for Hove and Portslade, said in September that the Burnham government had to do more on growth. “I think we need to up our ambition, I think that we need to act with more urgency when it comes to economic growth,” he told the BBC.
Another MP who attended the meeting on Tuesday told PoliticsHome: “To stand any chance of a second term, Labour must reclaim the centre ground, which means rebuilding our reputation with business.
“Rachel Reeves had to make really tough decisions to sort out the public finances, such as with the NICS (National Insurance) rise. But businesses in my patch feel they have had no benefit from our programme so far. Trump has exacerbated their woes.”
The same survey found that cost-of-living pressures remain a key determinant of how people would vote at an election.
Over two in five respondents (41 per cent) said household bills rising faster than pay would make them consider changing their vote – more than any other factor polled.
At the same time, Labour voters told the Public First poll that rising energy bills, rent, mortgage rates and council tax were most likely to make them stop supporting the party.
The Budget is also being viewed by some MPs as an indicator of whether Burnham will call an early general election next year. There is ongoing speculation about a snap poll, with some MPs claiming it could happen as soon as this winter, despite the Prime Minister publicly ruling it out.
At Tuesday’s meeting, Labour MPs were shown a Public First MRP poll, carried out in late September, which projected Labour as the largest party in a hung parliament with 278 seats. It put Reform in second with 135 seats and the Conservatives in third with 107.