Louise Haigh has called on Sir Keir Starmer to conduct an "economic reset" following Reform UK's gains in the recent local elections.
The former transport secretary, who resigned from the shadow cabinet in November, called on the prime minister to address voters’ concerns, particularly surrounding welfare reforms and the removal of winter fuel payments, which she described as "totemic" issues for many.
This call for a shift in economic policy suggests a potential internal debate within the Labour party on how best to appeal to voters ahead of the next general election. And it comes after a chorus of Labour left-wingers warned Sir Keir Labour’s current approach risks opening the door to Nigel Farage at the next general election.
Wes Streeting on Sunday called Reform UK “a real threat” to Labour, and said he sees them as a “serious opposition force”.
Labour and the Conservatives are under pressure to reverse their parties’ fortunes after Reform picked up 10 councils and more than 600 seats in Thursday’s polls.
Mr Farage, whose party also gained an MP in the Runcorn and Helsby by-election, hailed the results as the end of two-party politics.
Sir Keir has faced calls from his own MPs to change tack after he pledged to go “further and faster” with his plans in response to the polls.
Reports have suggested that Sir Keir could seek to counter Reform UK’s rise with a focus on immigration reforms to be unveiled in an upcoming white paper.
Jo White, the chair of the Red Wall group of Labour MPs, has urged Sir Keir to stop “pussyfooting around” and take a more decisive approach, while backbencher Emma Lewell said the party needs a “change of plan” rather than a “plan for change”.
Ms Haigh said Sir Keir’s response to the polls was “alarming” and failed to acknowledge “any need to change course”, but rather committed to doubling down while “haemorrhaging votes”.
She called for a strategy that is “confident in our values, sets the terms of the debate and takes the fight to Reform, rather than letting the fight come to us,” writing in The Times.
“I believe the only way to achieve that is through an economic reset, through ripping up our self-imposed tax rules and by a serious programme of investment and reindustrialisation.
“Because Nigel Farage is not wooing these voters with a traditionally right-wing offer. He is calling for the nationalisation of steel and water.
“Polling I saw revealed that banning fire-and-rehire was almost as popular among Reform voters as Labour ones.”
Paul Johnson, director of the influential Institute for Fiscal Studies (IFS) think tank, said tax rises would be needed to fund more investment in public services.
He told Times Radio: “It may not be such a good political idea increasing income taxes or VAT or whatever specifically she has in mind.
“But yes if the government really wants to significantly increase spending then it's going to need to increase taxes to do it. It's the obvious point we always make.”
The billionaire founder of Phones4U John Caudwell, who backed Labour at the general election, said Ms Haigh’s ideas were “just nonsense”. “Tax hikes are not going to re-industrialise the economy. I mean, how does she think she's going to do that? They are just straplines with no substance behind them,” he told Times Radio.
Mr Caudwell added: “There's a lot of positive things that they're doing to try and drive the economy. They're just not doing enough. And the budget was a negative to that and will discourage people from coming to the UK and discourages people from staying in the UK. So we need to be smarter.”
Chancellor Rachel Reeves has said she will not budge from a pledge not to raise taxes.
The Health Secretary defended Labour on Sunday, urging the public to “give us time” to see through the change the Government has promised.
Mr Streeting said called Reform UK “a real threat”, calling Mr Farage’s party a “serious opposition force”.
“It’s not yet clear whether at the next general election it will be Reform or the Conservatives that are Labour’s main challenges, but we’ve got to take that threat seriously,” he told Sky News’s Sunday Morning With Trevor Phillips programme.
Tory leader Kemi Badenoch said she understands why voters are “angry” with the Conservatives and she must “come up with a plan that will deliver”, adding that it will be a “slow and steady” effort for her party to regain support.
Conservative co-chairman Nigel Huddleston sought to play down the threat from Reform UK, telling Sky News: “When they’re in a position of delivering things, that’s when the shine comes off.”
Liberal Democrat leader Sir Ed Davey said Labour and the Tories had both made a “mistake” in their handling of Reform UK.
“The Conservatives have been copying Reform policies, Labour is sounding more and more like Reform,” he told Phillips.
“I think the way you defeat Nigel Farage is by calling him out.”
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