No wealth tax under a Labour government, shadow chancellor says

Aug 27, 2023

Labour has “no plans for a wealth tax”, the shadow chancellor has said – comments described as “shameful” by a left-wing pressure group.

Rachel Reeves has also admitted she will find it difficult to raise taxes at all, should Labour win a majority at next year’s general election.

And she confirmed that Labour leader Sir Keir Starmer’s previous pledge to increase the 45p top rate of income tax has been ditched.

The party is ruling out any form of mansion tax, too.

Ms Reeves and her frontbench colleagues will try to grow the economy, she said.

A wealth tax is levied on someone’s net worth rather than their income, and is used in countries including France, Spain, Norway and Switzerland.

In the UK, the TUC has called for a “national conversation on taxing wealth”.

Earlier this month, the union umbrella group published analysis showing that a “modest wealth tax on the richest 140,000 individuals” – about 0.3% of the UK population – could add £10.4bn to the Treasury’s coffers.

Despite the revenue that might be raised, Ms Reeves told The Telegraph: “We have no plans for a wealth tax.”

She added: “I don’t see the way to prosperity as being through taxation.”

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Left-wing group Momentum said her rejection of wealth taxing was not only “shameful” but a “political choice to favour big business and the 1% over ordinary people”.

It added: “This isn’t about electoral interest. Wealth taxes are hugely popular.”

It also claimed the Labour leadership was “in hock to corporate interests”.

The Conservatives said it was Labour’s “latest U-turn” and Ms Reeves was “taking the British people for fools”, accusing the opposition of planning “reckless spending and borrowing”.

Ms Reeves has reportedly hinted at a wealth tax in the past.

Talking about raising money in general, she noted that the “tax burden is its highest in 60, maybe even 70, years”.

“There have been 24 tax rises in the 13 years of Conservative government,” she added.

“I don’t see a route towards having more money for public services that is through taxing our way there.

“It is going to be through growing our way there. And that’s why the policies that we’ve set out are all about how we can encourage businesses, big and small, to invest in Britain.”

Labour will be holding a business forum during its annual conference in Liverpool in October.

In addition to 200 people already signed up, a further 150 are on a waiting list, the party said.

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