Wes Streeting pledges wealth tax as he makes management pitch
The former health secretary Wes Streeting claimed the current system is not fair, penalises work, and demanded a radical transformation of the tax system.
Wes Streeting called for a wealth tax(Image: Jeff Moore/PA Wire)
Wes Streeting has set out plans for a wealth tax as he continues to make his pitch for the Labour leadership.
The former Health Secretary claimed the current system is not fair, penalises work, and demanded a radical transformation of the tax system.
Mr Streeting, who has vowed to stand in any leadership contest to replace Keir Starmer, called for capital gains tax to be equalised with income tax, a system he claims could raise £12billion a year.
Higher or additional rate taxpayers pay 24% on gains they make in the current financial year. Under Mr Streeting’s plans, that would be equalised with the income tax rate of 40% for higher rate taxpayers and 45% for additional rate taxpayers.
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The package would also close the loopholes he claimed people use to disguise income from work as capital gains, such as establishing personal service companies or taking pay in shares.
Mr Streeting said: “A member of my family is a cleaner in Lancashire. She pays a higher tax rate on her salary than her landlord pays for the growing value of the home she lives in. She slogs her guts out, he puts in far less effort, yet the state rewards him more than her. And we wonder why people are angry.
“The system is penalising work. It’s not fair and it’s bad for our economy. We need a wealth tax that works. A pound made from simply owning assets should not be taxed less than a pound made from a hard day’s work.”
The IFS, Resolution Foundation, Tax Policy Associates’ Dan Neidle, and the Labour Growth Group have all called for taxing gains at the same rate as income, but only above a fair return on the original investment.
It comes comes a day after Mr Streeting warned in his resignation speech that Labour must change course or risk handing Reform UK the keys to Downing Street. He quit the cabinet after dozens of Labour MPs urged the PM to stand down, sparking intense speculation he was set for a leadership challenge.
Later on Thursday, the Chancellor Rachel Reeves will unveil plans for a cost of living blitz, including a bid to drive down the cost of the weekly shop by slashing tariffs until 2028 on more than 100 items, including tomato ketchup, marmalade and biscuits. In a statement to Parliament, Ms Reeves is also expected to unveil a string of money-saving measures, including fare-free travel for school children in England in August.
