Wes Streeting has unveiled proposals for a wealth tax as part of his bid for the Labour leadership. The former Health Secretary criticized the current tax system for being unfair and discouraging work, calling for a significant overhaul.
Streeting, who is prepared to enter any leadership contest to succeed Keir Starmer, advocated for aligning capital gains tax rates with income tax rates to potentially generate £12 billion annually. This would mean higher and additional rate taxpayers paying the same rates on gains as on income.
Additionally, Streeting’s plan aims to eliminate loopholes that allow individuals to disguise work income as capital gains, such as through personal service companies or share payments. He highlighted the disparity where a cleaner pays higher taxes on her salary compared to her landlord’s tax on property appreciation, emphasizing the need for a fairer tax system.
Various organizations, including the IFS, Resolution Foundation, Tax Policy Associates, and the Labour Growth Group, have also supported the idea of taxing gains at the same rate as income above a reasonable return on investment.
Streeting’s call for tax reform follows his resignation speech warning that Labour must change direction to avoid losing to Reform UK. His resignation from the cabinet amid pressure from Labour MPs fueled speculation of a potential leadership challenge.
Meanwhile, Chancellor Rachel Reeves is set to announce a cost of living initiative, including reducing tariffs on over 100 items like tomato ketchup and biscuits until 2028, with additional measures like free school travel in England in August.
