Cut employee national insurance to win back voters, Labour report says

Radical economic reforms such as cutting national insurance and overhauling capital gains tax are Labour's only ways of winning back voters they have lost to Reform and the Greens, a report will warn.

The report, by the influential Labour Growth Group, will argue a drastic change of economic strategy is needed if Labour wants a chance of winning the next general election.

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It was put together in part by MP Chris Curtis, co-chair of the LGG, who has publicly joined calls for Sir Keir Starmer to stand down as prime minister, and will be viewed as a significant intervention in a week the PM tries to shore up his position.

Seen by Cabinet ministers, the publication will set out a series of policies to remake the link between hard work and reward. Polling by the centrist group suggests 79% of voters say the basics of a decent life are more expensive than they need to be, and the window of opportunity is closing for Sir Keir's party to take action.

The group's data also reveals that ex-Labour voters are united on their diagnosis of what's wrong, whether they have defected to Reform UK or the Green Party. The polling was carried out between 30 April and 2 May, days before voters dealt what many in the Labour Party have called an "existential" blow in the local and devolved elections.

"Britain should be a country where hard work, enterprise and service are properly rewarded," says Curtis, a former YouGov pollster.

"But for too long we have built an economy where owning scarce assets pays better than doing useful work, and where too many people profit from broken systems rather than creating value. That can change. Our job is not to manage the consequences of failure, but to rebuild the foundations of a decent economy: more homes, cheaper energy, stronger industries, better care, and markets that work for people again."

A member of the 2024 parliamentary intake, Curtis says the plans will help Labour "rebuild its coalition, take on the vested interests that hold Britain back, and put right what has gone wrong".

More than 50 Labour MPs have so far expressed publicly their desire to see the PM resign either immediately or within a certain timeframe. A large number in the latter camp want to give Andy Burnham, the Mayor of Greater Manchester, a chance to return to Westminster before pursuing any leadership contest.

But speaking to Sky News on Monday, Curtis said while he has "immense respect" for Keir Starmer, he doesn't have a plan "to implement the kind of change that this country needs" and "it's time for us to look for new leadership".

The Labour Growth Group was established after the 2024 general election and now works with more than 100 Labour MPs, though the report doesn't represent the views of all its members.

The group looks at ways to drive economic growth, which Labour has flagged as one of its key priorities in government.

Mark McVitie, Labour Growth Group director, says the party is "drowning in speculation about personalities" while "the country is only interested in what we can actually do to remake the link between an honest day's work and a good, secure life.

"We have done this work because the substance is what matters and the country is years ahead of mainstream politics on the diagnosis. They will not vote for more of the same. Anyone serious about how Labour wins again, or governs well, will have to engage with the argument here."

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Among the proposals due to be presented are a cut of up to 2p to employee national insurance; a reform of capital gains tax, and a greater devolution of powers to local mayors.

It also argues Thames Water should go into administration and services including water, care, children's services and dentistry should be monitored under a new 'Essential Services Accountability Regime' with clawback powers and public interest ownership tests.

Infrastructure projects involving the grid, transport and defence - to name a few - should also move through a single consent route on a statutory timetable to end "the decades-long strangulation of British capacity by overlapping consents, tactical litigation and institutional vetoes".

On Monday, the prime minister vowed to prove his doubters wrong by forging stronger ties with the European Union, nationalising British Steel and boosting prospects for young people, as pressure continues to mount on the future of his premiership.

(c) Sky News 2026: Cut employee national insurance to win back voters, Labour report says