Anneliese Dodds, the former shadow chancellor, has called on the Treasury to consider a wealth tax to address the growing gap in public finances. Speaking ahead of the autumn budget, she urged the government not to shy away from making significant decisions on taxation.
Dodds, who resigned as international development minister in February over cuts to the aid budget, emphasised the need for an honest conversation with the public about fiscal challenges. She argued that those with the broadest shoulders should take on more responsibility through tax changes.
While not specifying exact measures, Dodds pointed to the work of economist Arun Advani, whose wealth tax commission proposed a one-off levy on millionaire households. She acknowledged that any new tax would have consequences but rejected fears that it would lead to capital flight.
The call for a wealth tax aligns with growing pressure from Labour MPs, though business secretary Jonathan Reynolds has dismissed proposals for a 2% annual tax on assets over £10m as unrealistic. Dodds also suggested Chancellor Rachel Reeves should review fiscal rules to allow for increased defence spending without further aid cuts.
Dodds warned that cutting the aid budget undermines soft power and allows Russia and China to expand their influence. She stressed the need for a balanced approach to funding defence while restoring public services.
