Shadow chancellor Rachel Reeves has explicitly ruled out a wealth tax if Labour wins the next election, going further than before in the party's efforts to demonstrate economic competence. In an interview with the Sunday Telegraph, she confirmed that a Labour government would not bring in a mansion tax on expensive properties, increase capital gains tax, or put up 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.” Her remarks underline how Labour has decided it needs to go further in blunting Conservative attacks, with party figures fearful that any hints of tax rises or unfunded spending commitments would be used to suggest it would be profligate with the nation's finances.
Reeves also confirmed that Keir Starmer’s leadership pledge to increase the 45p top rate of income tax is now off the table, after he indicated in June that he was no longer keen on the idea. “I don’t see a route towards having more money for public services that is through taxing our way there,” she said. “It is going to be through growing our way there.” The comments mark a shift from her remarks in September 2021 that “people who get their income through wealth should have to pay more”.
Labour has stepped up its focus on wooing the corporate sector, with the annual business forum hosted at the party’s conference this autumn over-subscribed by 75%, with 200 delegates due to attend compared with 130 last year, and 150 on the waiting list. The party 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, saying on X: “Four people in this country have more wealth than 20 million Britons. Meanwhile, capital gains are taxed lower than income. This is a political choice to favour big business and the one per cent over ordinary people. Shameful.”
