Wales' Labour First Minister backs Wealth Tax and piles pressure on Keir Starmer

Wales's First Minister has said a wealth tax is "not a bad idea" as Labour battles to balance the books after the disability benefit cuts climbdown.

Eluned Morgan said those with the broadest shoulders pay more as ordinary people were desperately struggling with the cost of living.

She also piled pressure on the Government to scrap the Tory two child benefit limit, saying: “It’s causing a lot of hardship in a lot of families”.

It comes as the Welsh Labour leader seeks to pursue a "Red Welsh Way", drawing a dividing line between Cardiff Bay and Westminster.

Ms Morgan compares the relationship to the hit show Gavin and Stacey - and the cultural differences between Essex and Barry, in south Wales.

Speaking to the Sunday Mirror in Newport, South Wales, she said: "I'm not going to change my position just because my family is now in power."

The Welsh Labour leader previously challenged Keir Starmer over cuts to the winter fuel allowance and disability benefits, which had provoked fury on the doorstep in Wales.

Both have now been all but scrapped, leaving Chancellor Rachel Reeves with a battle to find more than £5billion to make up the shortfall.

Speculation is mounting that she could be forced to put up taxes at the Budget in the autumn.

However the Prime Minister has insisted the manifesto pledge to protect working from hikes to VAT, income tax and national insurance remains.

Last weekend, former Labour leader Lord Kinnock suggested slapping a 2% tax on assets valued above £10million would bring in up to £11billion a year.

Asked about the calls, Ms Morgan said: "I think that people with the broadest shoulders should carry more of the burden.”

This sort of tax on the mega-rich would not hit many people in Wales, she said, but she said ordinary people were really struggling with the cost of living.

She said: "What I get is what Keir Starmer and Rachel (Reeves) are trying to do, which is to make sure you have a stable framework, so that people invest and create jobs.

"If you don't have that, you can't pay for the services which are the things we really care about."

She said there were "other options available" to raise vital funds without destabilising the economy and dissuading investors.

She added: "I don't know all of the levers available, but the idea of taxing people earning over £10 million is not a bad idea."

Downing Street has refused to rule out a tax on the mega-rich, saying it doesn’t discuss tax policy outside of a Budget.

But the PM’s spokesman said: “The Government is committed to the wealthiest in society paying their share in tax.”

Ms Morgan was clear that she wants the two-child benefit limit to be scrapped - another area of tension between the Government and backbenchers.

She said: "We've been consistent in our view. This is a Tory policy that they brought in, and we're not going to change our view because there's a Labour government in.

"We've always said that we think this is not a good policy approach, and it is causing a lot of hardship in a lot of families.

She added: "A lot of the things that I've said that sometimes upset people at the UK government level are things that we've been saying for years.

"I'm not going to change my position just because my family is now in power."

She added: "When it comes to where they should go next, I think it is important that they look at all the options, but try and make sure it's based on Labour values."

Ms Morgan, who has been First Minister for just under a year, has been increasingly critical of the UK Government in recent months as Welsh Labour braces for a difficult Senedd election next year.

She said: "The Labour Party is a broad church, in the same way as in Gavin and Stacey you had people from really different parts of the UK having completely different perspectives on the world.

"That's ok, it's not a problem. You have to adjust and be respectful... I don't think there's a contradiction when it comes to us having a different position because we are adjusting to different circumstances."

READ MORE: Join our Mirror politics WhatsApp group to get the latest updates from Westminster

She also praised the Labour Government for offering a significant uplift in funding to Wales, allowing her to divert cash into the NHS.

“Things that were really challenged for us like really long waiting lists in the NHS, we've now had the money to bring that down, so we've seen an 86% reduction in the longest waiting lists since the peak of the pandemic.

"That was really difficult as we just didn't have the money to do it before.”

The NHS came up repeatedly as she walked around Newport on a sunny Thursday to meet voters.

One woman confronted her in a panic about losing her Personal Independence Payment (PIP), before being relieved to be told that the decision had been shelved.

Ms Morgan said: "The noise I heard today was reasonably positive… That's not what it felt like a year ago.

"I think people are starting to see the difference."