Rachel Reeves has explicitly ruled out a wealth tax under a Labour government, as the party seeks to bolster its economic credibility. The shadow chancellor confirmed that a future Labour administration would not introduce a mansion tax on expensive properties, increase capital gains tax, or raise the top rate of income tax.
“We have no plans for a wealth tax,” she 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.”
Reeves also confirmed that Keir Starmer’s leadership pledge to increase the 45p top rate of income tax was now off the table, after he indicated in June that he was no longer keen on the idea. Her remarks are designed to blunt Conservative attacks, with party figures fearful that any hints of tax rises or unfunded spending commitments would be used to suggest Labour would be profligate with the nation’s finances.
There are also plans to go on the attack over Rishi Sunak’s stewardship of the economy, as internal polling suggests Tory-to-Labour switchers are irritated by his optimism on inflation when they do not feel their own finances are improving. Reeves’ words mark a shift away from her September 2021 comments that “people who get their income through wealth should have to pay more”.
Asked whether Starmer’s pledge to increase the top rate had been ditched, Reeves replied: “Yeah … 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.” She added of any form of wealth tax: “We won’t be doing that. It’s a denial.” A Labour source said her words also applied to “any form of mansion tax”.
Labour has said it remains committed to scrapping non-dom tax status, closing a tax loophole enjoyed by a small number of private equity fund managers, adding VAT to private school fees and cracking down on tax avoidance. The left-wing campaign group Momentum criticised the move, saying it was “a political choice to favour big business and the one per cent over ordinary people”.
