Chancellor Rachel Reeves has dodged calls from her predecessor Anneliese Dodds for a wealth tax to be considered ahead of this autumn’s budget.
When Sir Keir Starmer became Labour leader in 2020, Ms Dodds was his first pick for shadow chancellor. However, she did not last long and was replaced by Ms Reeves, who then got the government job after last year’s election win.
Speaking to the Sky News political editor Beth Rigby on the Electoral Dysfunction podcast, Ms Dodds said she had examined wealth taxes when she was briefly in the shadow chancellor job and how one could be implemented.
She said: “I would hope the Treasury is considering that kind of evidence, as well as other changes that have been put forward.”
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Asked today if about Ms Dodds’ intervention, Ms Reeves said: “Decisions around tax are decisions that are made at a budget and we’ll make those decisions in the appropriate way, but the number-one priority of this government is to grow the economy.
“And that means bringing more investment into Britain, creating more good jobs paying decent wages here in Britain.
Listen here to hear Ms Dodds’ full comments:
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“We’ve got to get the balance right on taxation because we want that investment, we want those jobs to come here.
“That’s why we’re reforming the planning system, secured three trade deals in the first year of this Labour government, cutting back on unnecessary regulation, and reforming our pension system to unlock money for businesses to be able to invest here in the UK.”
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What is a wealth tax?
The government’s financial position is stretched ahead of the next budget, due at the end of autumn.
Ms Reeves has committed herself to not changing her fiscal rules, leaving little wiggle room to avoid tax rises or spending cuts.
This is due to the government’s inability to save money through policies like welfare reform, which were gutted due to a rebellion of backbench Labour MPs.
Last week, Business Secretary Jonathan Reynolds branded the suggestion of a wealth tax “daft” – but he has less influence over the writing of the budget than the chancellor.
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Meanwhile, reports from the Daily Telegraph suggested that Deputy Prime Minister Angela Rayner backed increasing taxes, including reinstating the pensions lifetime allowance and a higher corporation tax level for banks.
Ms Dodds also wants to see those considered.
