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Leaked Memo Exposes Plan to Cut Child Benefits for Middle Class Families in Bold Labour Move

Angela Rayner

Politics

Leaked Memo Exposes Plan to Cut Child Benefits for Middle Class Families in Bold Labour Move

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A leaked memo is stirring the political pot in the UK, revealing that Deputy Prime Minister Angela Rayner pushed for cutting child benefits for middle-class families. According to The Telegraph, which first reported the leak, Rayner urged Chancellor Rachel Reeves to claw back child benefit payments from families where the highest earner brings in between £50,000 and £80,000 a year.

Yep, you read that right. This proposal hits families right in the middle-income bracket, the kind of households often juggling high living costs and childcare expenses. It’s part of a broader set of tax suggestions Rayner floated as alternatives to painful spending cuts.

The memo, submitted back in mid-March before the Spring Statement, didn’t stop at child benefits. It also proposed hiking the fees immigrants pay to use the NHS and cutting off migrants’ access to state pensions and Universal Credit. And that’s not all—Rayner suggested some revenue-raising moves aimed at investors and financial institutions. Among them? Bringing back the pensions lifetime allowance, tweaking the way dividend tax works, and upping the corporation tax rate for banks.

Rayner described the suggestions in the memo as “popular, prudent and would not raise taxes on working people.” But not everyone is buying that. Former Conservative Chancellor Jeremy Hunt fired back, calling the child benefit rollback a bad idea and warning it would alienate middle-class families already feeling the squeeze.

“This may look like a relatively minor budget measure but was one of the most popular things we did because it helped striving middle-class families struggling with childcare costs,” Hunt said. “Abandoning them would finally confirm that far from being a New Labour government, this is a traditional anti-aspiration Old Labour government.”

In case you’re not familiar, child benefits in the UK are worth £1,355 a year for a first child and £897 for each additional one. Right now, there’s been no sign from the Treasury that they’re seriously looking at Rayner’s benefit-cutting idea. But the leaked memo has already kicked off a firestorm in Parliament.

During Prime Minister’s Questions this week, Conservative leader Kemi Badenoch slammed the memo and went after Rayner directly, accusing her of leaking the information to the press on purpose. “She is demanding eight new tax rises as if we haven’t suffered enough. People out there are struggling, businesses are struggling… we cannot have more tax rises,” Badenoch said, demanding a promise from the Prime Minister to rule out any new taxes this year.

Prime Minister Keir Starmer deflected the heat by doubling down on his party’s bigger-picture plans. “The Deputy Prime Minister is working with the Chancellor, building 1.5 million new homes, reforming our planning system, putting £7 billion into our economy and bringing forward our employment rights Bill which is the single biggest upgrade to workers’ rights in a generation,” he said.

Starmer also used the session to announce a U-turn on plans to cut pensioners’ winter fuel allowance, likely an attempt to soften the blow from all this budget drama.

Meanwhile, some Labour MPs are taking Rayner’s side, calling on the PM to go even further. They’re pushing for more aggressive tax hikes on savers and for him to ditch upcoming welfare cuts altogether.

Environment Secretary Steve Reed tried to calm things down, insisting there’s no rift in the Cabinet. “Sir Keir’s top team was ‘united’,” he said.

But with leaked memos, tax hike talk, and child benefit cuts all in the same political stew, it’s safe to say this story is far from over.

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