Angela Rayner sent a secret memo to Rachel Reeves pushing for a new tax raid on savers, according to a new report.
In the alleged document the Deputy Prime Minister proposed eight tax increases, including reinstating the pensions lifetime allowance and changing dividend taxes.
She also suggested new raids on the million people who pay the additional rate of income tax and a higher corporation tax level for banks.
The measures would raise taxes by £3billion to £4 billion a year, according to estimates cited in the document.
Angela Rayner sent a secret memo to Rachel Reeves pushing for a new tax raid on savers, according to a new report
Getty
The real figure could be much higher, as no specific estimates were given for some policies.
The memo, revealed by the Telegraph, amounts to a direct challenge to the Chancellor's broad approach this year of using spending cuts rather than tax rises to fill the black hole in the nation's finances.
The two-and-a-half-page memo, stamped "official" and submitted by Rayner's team to the Treasury in mid-March, was titled "alternative proposals for raising revenue".
One key proposal was reinstating the pensions lifetime allowance, which had placed a limit of just above £1 million on pension savings before higher tax charges applied.
LATEST DEVELOPMENTS:
Rachel Reeves decides taxation and spending policy
Getty
This could generate up to £800million in new tax revenues.
The memo also proposed ending inheritance tax relief on Alternative Investment Market shares entirely, potentially raising up to £1 billion annually.
Other suggestions included scrapping the £500 tax-free allowance for dividends and increasing dividend tax rates for the wealthy.
Rayner also proposed freezing the additional rate income tax threshold beyond 2028, which wealth management company Quilter estimates would raise £1.83 billion in 2029-30.
For businesses, the memo suggested raising bank corporation tax to 30 per cent from 28 per cent.
The document has sparked political controversy, with Conservative shadow chancellor Mel Stride saying: "This confirms that we are still living with the Labour Party of Jeremy Corbyn. At the very highest level, Labour ministers are debating which taxes to increase next."
Treasury insiders are understood to be making it clear that while Reeves welcomes contributions from Cabinet colleagues, as Chancellor she decides taxation and spending policy.
Sir Keir Starmer unveiled his new UK-EU deal at Lancaster House on Monday
GETTYThe memo emerges amid growing tensions within Labour, with fears that Sir Keir Starmer faces rebellions over scrapping universal winter fuel payments and cuts to disability benefits.
More than 100 Labour MPs have reportedly signed a private letter opposing changes to the Personal Independence Payment - the biggest rebellion under Starmer's leadership.
Rayner, who represents the party's Left, has reportedly become "increasingly exasperated" by having to publicly defend Treasury spending cuts.
