Labour Rules Out New Wealth Tax If It Wins Election

Labour has ruled out introducing a so-called wealth tax if it wins the next general election, after a study showed it could rase £10bn.

Rachel Reeves, the shadow chancellor, has also said a Labour government would not increase the top rate of income tax.

Wealth taxes target someone’s net worth not just their income and are used in other countries including France, Spain, Norway and Switzerland.

Many on the left of Labour have pressed Keir Starmer to use wealth taxes to raise money from the super-rich.

A report from the TUC earlier this month said a “modest” wealth tax on the richest 140,000 individuals – around 0.3% of the population – could deliver a £10.4bn boost for the public purse.

But in an interview with The Telegraph, Reeves said “no” to any new wealth tax.

“I don’t have any spending plans that require us to raise £12 billion. So I don’t need a wealth tax or any of those things,” she said. “We have no plans for a wealth tax.”

Reeves also said the party had ditched Starmer’s 2020 Labour leadership pledge to increase the top rate of income tax.

“Yeah. 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 said when asked if the promise was dead.

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

The first of Starmer’s ten pledges to Labour members when running to succeed Jeremy Corbyn was to “increase income tax for the top 5% of earners”.

At the moment earnings over £125,140 are taxed at 45%. Liz Truss had tried to lower it, but was forced to abandon the plan after her mini-Budget caused chaos in the markets.

Anneliese Dodds, the chair of the Labour Party, defended the decision to rule out wealth taxes.

“Labour has been clear that we will not impose a wealth tax,” she told Times Radio on Sunday. “That’s been our policy for some time.

“But we will take difficult choices around taxation because we do think we need to have a tax system that’s fair for working people and that supports economic growth.”