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No wealth tax under Labour

Journalist: Tom Dunstan, FTAdviser

ended 29. August 2023

Over the weekend, shadow chancellor, Rachel Reeves ruled out any version of a wealth tax should the Labour party win at the next general election.

She detailed that Labour would not target expensive houses, increase capital gains tax or put up the top rate of income tax.

She is quoted as saying “I don’t have any spending plans that require us to raise £12bn worth of money. So I don’t need a wealth tax or any of those things.” 

She also stated: “We have no plans for a wealth tax.”

As a financial adviser, what is your reaction to this news? Is this a positive development? Is this what you were expecting?

4 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
After 14 years of Tory government, they have lost all credibility on the economy. Whilst Labour is still seen by some to have a more draconian philosophy on taxation the facts don’t bear this out. Sunak has presided over the biggest tax burden on the British people in over 75 years. We see, from Ireland, that lower taxes stimulate growth, that’s what Labour will do.

Starmer and Reeves are well aware that wealth taxes are not just vote killers but they just don’t work. Someone who bought their house in London 50 years ago, but had a low income, couldn’t pay a tax on a million pound property. They would be forced to move out of an area they have lived all their life. Surely this isn’t the centrepiece policy of the militant left.

Labour will focus on taxing the truly wealthy and getting business to pay tax, not avoid it. This will allow them to set rates at competitive levels that both businesses and high net work individuals will pay rather than avoid.
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Mike Staton
Director at Staton Mortgages
Over the last 4 years, I have stopped believing anything a politician states in the media or over any public forum because I believe it is said to win votes. These guys all urinate in the same pot and in all honesty, I wouldn't believe any of them if they told me we lived on planet Earth. Until somebody comes into power that has suffered as the general public has suffered then I couldn't give two hoots about what they have to say. These people have driven our economy into the ground, I don't care if they are team red, green or blue, their actions are purely for self-progression.
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Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
It is good news for hardworking Brits that Labour has no plans to put in place a Wealth Tax. However, Rachel Reeves comments need to be taken with a pinch of salt. Firstly because Labour are not in power. Secondly because things can change very quickly in the world of politics and tax. The lesson? Don't make plans based on politicians quotes.
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Graham Cox
Director at Bridging Hub
There's a strong case to increase Capital Gains Tax rates, as it's currently taxed at lower rates than earned income. But, as ever, we have a Labour opposition running scared of the rightwing media, and tying their hands before they've even reached number 10. I'd like to see Labour have the courage of their convictions and lay out their fiscal plans to the country unapologetically.

The burden of taxation is placed disproportionately on the working poor. It's grossly unfair that income tax is paid as soon as you earn £12570 per annum. That's not even a liveable income. We need root and branch reform of the entire tax and national insurance system, with no income tax paid on the first £20,000 of earnings, but higher rates paid beyond that. And above all, the government needs to get serious about offshore tax evasion. Clawing that back could solve many of the country's economic problems.