Deputy Prime Minister Angela Rayner pressed Chancellor Rachel Reeves to introduce a series of wealth tax rises ahead of March’s spring statement, according to a leaked memo. The document, obtained by the Daily Telegraph, proposed eight tax measures worth an estimated £3bn to £4bn a year, including reinstating the pensions lifetime allowance and raising corporation tax for banks.
The proposals were not adopted, with Reeves opting instead to cut public spending to meet her fiscal rules. The memo, titled “alternative proposals for raising revenue”, argued the measures would not breach Labour’s 2024 manifesto pledge not to raise taxes “on working people”. Suggestions included ending inheritance tax relief on Aim-listed shares, scrapping the £500 dividend tax-free allowance, and freezing the threshold for the 45p additional income tax rate.
Rayner also proposed raising dividend tax rates for higher earners and targeting property traders using corporate structures to avoid stamp duty. The memo was sent two weeks before Reeves’ fiscal statement on 26 March, amid cabinet pressure over expected cuts in this summer’s spending review. Government insiders said such informal policy papers were not unusual and did not indicate official endorsement.
Environment Secretary Steve Reed told BBC Breakfast the cabinet was “united behind the government’s plan for change”, noting Labour had already increased taxes on wealthy individuals through changes to non-dom tax status. Shadow Chancellor Mel Stride said the memo showed Labour’s “instincts on taxation”, adding: “Labour’s top brass, including the deputy prime minister, want to come back for more.”
