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An influential group of Labour MPs has called for a renewal of the party’s economic strategy to create a ‘more active state’ and prioritise ‘long-term investment’ over ‘short-term crisis management’. As Prime Minister Keir Starmer faces growing pressure to resign, the soft-left Tribune group questioned whether the UK’s budget rules were ‘fit for long-term renewal’. In a joint introduction to a collection of essays published on Monday, former Cabinet minister Louise Haigh and Yuan Yang, who is among at least 79 Labour MPs who have called on the prime minister to step down, said politics must offer ‘more than better management of decline’. They said the collection would explore questions such as ‘how to build a tax system that is fairer, simpler, and better aligned with modern sources of wealth and economic activity’ and how ‘social investment and market reforms can reduce the cost of living’. Attention should also be focused on ‘how to support stronger, broader-based growth by creating a stronger, more active state that is capable of stabilising inflation, generating investment and sparking dynamism,’ they said. In her own contribution to the collection, Haigh wrote: ‘Faced with the dual mandate of maintaining fiscal control and supporting economic growth, the institution defaults toward caution, prioritising near-term debt dynamics over longer-term economic outcomes.’ The ex-transport secretary also called for capital gains tax to be brought closer to income tax rates as the existing difference ‘creates incentives for individuals to shift income into lower-taxed forms, effectively lowering the rates they pay on money they earn’. Alignment should come with measures such as inflation indexation to ensure that ‘genuine investment returns are not unduly penalised’, she said. She said funding for social care and other social services should be nationalised and distributed ‘more fairly’ through a national funding formula, ‘reducing reliance on regressive local tax bases’. Council tax should be cut and ‘refocused’ to return to funding genuinely local services while stamp duty should be removed to avoid discouraging people from moving homes and leaving some properties not used in the way that best suits people’s needs, the MP said. Yang said: ‘The cost-of-living crisis and our low growth are two symptoms of the same problem: an economic structure that hasn’t been working for a long time. ‘Families are facing stagnant incomes and persistently high costs, and fiscal subsidies alone will not solve that. ‘We need to take on the root causes of those costs from reforming energy pricing, to tackling housing, transport and food prices while building a more active state that can stabilise prices and support investment. ‘Strengthening household resilience is essential not just for fairness, but for growth, because an economy where people feel secure is one in which they can be productive.’ By Press Association Political Staff Press Association: News source: PA Copyright 2026 Alliance News Ltd. All Rights Reserved.
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