Labour civil war rages as Wes Streeting calls for U-turn on Reeves' 'jobs tax'... and Tony Blair swipes that Burnham doesn't 'understand' the world

By JAMES TAPSFIELD, UK POLITICAL EDITOR Published: 14:25, 31 May 2026 | Updated: 14:27, 31 May 2026 Labour's civil war escalated again today as Wes Streeting called for a U-turn on the 'jobs tax'. Mr Streeting took aim at Rachel Reeves' controversial hike to employer national insurance as jostling to replace Keir Starmer continues. The huge raid featured in the Chancellor's first Budget in 2024, with businesses warning it has been a drag anchor on recruitment - particularly for young people.  Meanwhile, Tony Blair has renewed his clashes with Andy Burnham and the Labour Left as the ex-PM pushes for lower taxes, welfare curbs and scaling back Net Zero.  In an article for the Observer he swiped at Mr Burnham's critique of 'neo-liberalism' and demands for more Government control of the economy, pointing out that the state already spends half of national income.  Wes Streeting took aim at Rachel Reeves' controversial hike to employer national insurance as jostling to replace Keir Starmer continues Tony Blair has renewed his clashes with Andy Burnham and the Labour Left as the ex-PM pushes for lower taxes, welfare curbs and scaling back Net Zero Mr Streeting suggested a 'targeted reduction' of employers' national insurance contributions in an interview with the Sunday Times. He said it was a way to 'actively incentivise' hiring, amid alarm at a surge in Neets - young people not in education, employment or training. But Work and Pensions Secretary Pat McFadden played down the idea this morning, arguing the tax raised money for public services such as the NHS. Mr McFadden told Sky News's Sunday Morning With Trevor Phillips businesses already did not have to pay employers' national insurance for workers under the age of 21. He said: 'Now, it's a fair point of debate to say maybe we should expand that or do something with it, but like every other call for a tax change, there's a cost to these things. You have to net these things off.' He added: 'If you want to pull one lever in the tax basket, as it were, there will be consequences.' Mr Burnham has berated Sir Tony - whose Government he served in - for not rejecting Margaret Thatcher's legacy. He attributed economic success in Manchester - where he is currently mayor - to a 'very interventionist' approach as he said the markets shouldn't dictate policy. But the former PM hit back today: 'The prevalent view on the Left is that the financial crisis gave rise to populist sentiment, showing that ''neo-liberal'' economics failed and led to stagnant wages.  'Leave aside the fact that a country where almost half our national income is spent by the state is an odd form of neo-liberalism, we should be cautious about treating populism as a consequence simply of economics... In an article for the Observer Sir Tony swiped at Mr Burnham's (pictured) critique of 'neo-liberalism' and demands for more Government control of the economy Your browser does not support iframes. 'Break down the support for Brexit and Trump - the two big populist events of the past decade - and we see a large part of the support for both was not from the most disadvantaged.  'Cultural questions also matter. And too often progressive positions on these issues seem to have been driven by noisy pressure groups not common sense.' In another apparent dig at Mr Burnham and the Left, Sir Tony said: 'The Labour Party purpose will always be social justice.  'But the skill with which it is achieved will determine the success or failure of that purpose. And that demands understanding the world before changing it.'  No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.