A Scottish Labour MP has warned his own Government there must be no return to austerity amid reports of public spending cuts.
Brian Leishman urged the UK Government to introduce a wealth tax rather than slashing budgets.
It comes as Labour Chancellor Rachel Reeves is reportedly considering cuts due to the cost of UK borrowing going up.
Alloa and Grangemouth MP Leishman pointed to Scottish Labour leader Anas Sarwar promising there would be no austerity during the election campaign. He also warned that not improving living standards would result in the Right gaining popularity.
Leishman said: “We’ve seen for 14 years exactly what happens to society and the most vulnerable and disadvantaged people in society when you have austerity.
“We promised no austerity in the campaign. ‘Read my lips: no austerity’, was said. We’ve got to improve people’s living standards. I’ve been consistent in saying that. That will be the determining thing to this government: Do we make things better? Because the alternative of right-wing populism is there, and it’s clearing a path.
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“We’ve got to deliver that improvement in living standards, and that means investment in public services, investing in our communities. We’ve seen the damage that comes with austerity.”
Chancellor Reeves has been dealing with a difficult period for the economy, as the value of the pound dropped sharply and the cost of Government borrowing rose to decades-high levels.
Leishman argued that the Labour Government should bring in a wealth tax on assets of more than £10m and should raise capital gains tax rather than cuts. He said that this would also “allow us to invest in society.”
He said: “The self-imposed fiscal rules are putting ourselves in a box. I don’t understand why we’re hamstringing ourselves to such an extent to do that.
“There is a credible solution out there. If you have an annual wealth tax of 2% on multi millionaires, £10 million assets and more and the billionaire class, then we can raise in approximately £26 billion. With the further equalization of capital gains tax, we can raise another £14bn.
“Now, if we want to talk about £22bn black holes, that certainly takes care of that. It then allows us to invest in society, invest in people, and eventually rid Britain of austerity.”
The UK Government was approached for comment.
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