The Liberal Democrats have accused Labour of “robbing disabled people to appease Musk and Trump” after Chancellor Rachel Reeves refused to rule out dropping the UK’s digital services tax.
The 2% tax, introduced in 2020, raises £800m a year by targeting tech giants. However, Labour is reportedly considering altering or scrapping it—possibly to secure an exemption from Donald Trump’s next wave of global tariffs.
Speaking to the BBC, Reeves confirmed discussions were “ongoing” but didn’t deny that Labour might adjust the tax to avoid US retaliation.
“We want to make progress. We do not want to see British exporters subject to higher tariffs,” she said.
📉 Welfare cuts vs tax breaks for billionaires?
Labour’s position has sparked outrage, especially as it follows their recent £5bn cut to the welfare budget.
Lib Dem Treasury spokesperson Daisy Cooper didn’t hold back.
“Millions of people are deeply anxious about the government’s cuts to support for disabled people,” she said.
“If they go ahead with slashing taxes for social media giants while cutting welfare for millions of the most vulnerable, it would be tantamount to robbing disabled people to appease Musk and Trump.”
⚠️ ‘Appeasement never works with bullies’
Speaking at the Lib Dem spring conference, leader Ed Davey also took aim at Labour’s stance—warning that giving in to Trump’s demands won’t end well.
“Appeasement never works with bullies,” he said. “It doesn’t work with Trump—as his tariffs on British steel already show.”
Davey, who has a history of clashing with Elon Musk (once being called a “snivelling cretin” by the billionaire), had a message for him too.
“And let me say this to Elon Musk, who I know is my biggest fan… We will make out-of-control social media giants like you pay more—so we can defend our children and young people from the harm you’re causing them.”
📢 Lib Dems call for tax increase, not cuts
Instead of scrapping the digital services tax, the Lib Dems want to triple it to 6%.
Meanwhile, Trump has already slapped tariffs on UK goods since taking office in January. He’s also declared that April 2 will be “Tariff Day”, meaning more import taxes are on the way.
So, will Labour stick to their tax policy, or will they cave to US pressure? The Lib Dems have made it clear—they believe the government’s priorities should lie with British people, not billionaires across the pond.
You may also like: Elon Musk called out for spreading misinformation about Netflix’s Adolescence
