Shadow Chancellor Rachel Reeves has explicitly ruled out introducing a wealth tax if Labour wins the next election, as the party intensifies its focus on demonstrating economic competence. In an interview with the Sunday Telegraph, Reeves confirmed that a Labour government would not implement a mansion tax, increase capital gains tax, or raise the top rate of income tax.
“We have no plans for a wealth tax,” Reeves said. “We don’t have any plans to increase taxes outside of what we’ve said. I don’t see the way to prosperity as being through taxation. I want to grow the economy.” She also confirmed that Keir Starmer’s leadership pledge to increase the 45p top rate of income tax is now off the table, after Starmer indicated in June that he was no longer keen on the idea.
Reeves’ remarks mark a shift from her comments in September 2021, when she said that “people who get their income through wealth should have to pay more.” Labour has stepped up its efforts to woo the corporate sector, with the party’s annual business forum at this autumn’s conference over-subscribed by 75%, with 200 delegates attending compared to 130 last year.
Reeves 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.” A Labour source told the newspaper that her words also applied to “any form of mansion tax,” which the party proposed under Ed Miliband before the 2015 election.
Labour has said it remains committed to scrapping non-dom tax status, closing a tax loophole for private equity fund managers, adding VAT to private school fees, and cracking down on tax avoidance. The leftwing campaign group Momentum criticised the decision, stating: “Four people in this country have more wealth than 20 million Britons. This is a political choice to favour big business and the one per cent over ordinary people.”
