Ex-shadow chancellor calls for wealth tax to tackle economic crisis. Embattled Chancellor Rachel Reeves has been given a stern warning by ex Labour Shadow Chancellor John McDonnell not to impose big welfare cuts to head off the economic crisis. Leading Left wing MP Mr McDonnell said such a move would be ”politically suicidal” and would result in a backlash from hard-up voters and trigger a recession, he said.
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Britain had 165 billionaires and it was time to make them pay more tax, he added. Mr McDonnell’s comments came amid a series of reports that Ms Reeves may order big public spending cuts to get the economy back on track. Mr McDonnell, who had the Labour whip withdrawn last year after voting to scrap the two child benefit cap, said Ms Reeves and Sir Keir Starmer had been wrong to “tie Labour’s hands” by ruling out tax rises before they got elected.
He told BBC Radio 4’s Today programme: “We boxed ourselves in to a certain extent. “Voters were more important than money markets and had to be ‘protected.’. “You don’t turn to cuts - not only would that be politically suicidal, it would undermine the political support on which Labour got elected.
“You would turn a crisis into a recession.”. Asked if he was concerned by Sir Keir’s vow to be “ruthless” in taking the necessary action to deal with the current situation, Mr McDonnell said: ‘If ruthless means we are going to have a round of cuts on welfare I am certainly worried.
