Labour MP demands wealth tax after welfare policy failure

In the UK, Sir Keir Starmer's Labour government has faced significant backlash regarding its recent welfare reforms. On July 2, 2025, the welfare bill passed its second reading in Parliament despite substantial opposition from within the Labour Party itself. A total of 49 Labour MPs voted against the proposed welfare cuts, leading to the largest internal rebellion since Starmer assumed leadership of the party a year prior. The fallout from this rebellion has created a financial strain on the government's spending plans, resulting in a forecasted funding gap of £5 billion. Rachael Maskell, a key figure in the rebellion, accused the Treasury of prioritizing budget cuts at the expense of disabled individuals. Because of this internal conflict, there have been rising calls for alternative funding solutions, including wealth taxes, to help balance the deficit created by the U-turn on welfare. Maskell suggested that a wealth tax could raise significant revenues for the treasury while insisting that the financial burden should not fall on the most vulnerable. The controversy surrounding Labour's approach to welfare reform has forced leaders to reconsider their strategies, as members continue to voice deep concerns about the potential impact on disabled individuals and other disadvantaged groups within society. This episode highlights ongoing tensions within the party, between fiscal prudence and social justice, complicated further by the impending financial decisions required to remedy the situation.