Rachel Reeves rules out wealth tax under Labour

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Britain’s shadow chancellor Rachel Reeves has vowed that the incoming Labor government will not crack down on the rich, in the latest attempt to underscore the party’s commitment to fiscal discipline.

Reeves confirmed Labor had “no plans for a wealth tax”, ruling out higher taxes on capital gains and property income, as she ramped up Labor’s appeal to business and wealth creators.

Prime Minister Rishi Sunak is under pressure within his party to make tax a key dividing line with Labor at the next election, while Conservative MPs are pressing him to announce tax cuts before polling day.

Reeves is determined not to allow the Conservatives to rerun previous campaigns that focused on the so-called “Tax Bombshell” It would explode if Labor was elected with an unfunded spending plan.

Speaking to the Sunday Telegraph, Reeves said there was no need for Labor to impose any form of wealth tax because her party would strictly rein in public spending.

In 2021, Reeves criticized a plan by then chancellor Sunak to boost National Insurance funding by £12bn to fund the NHS and social care. She has previously said it would be better to tax “people who earn their income through wealth”.

Reeves noted at the time that this refers to “people who earn income through stocks and buy-to-let properties.” But Sunak’s proposed tax increase was later scrapped by former prime minister Liz Truss’ short-lived prime minister, Kwasi Kwarteng.

“The government said they needed to raise £12bn and I said, why do you always go to working people and ask them to contribute more?” Reeves said.

“I don’t have any spending plans that require us to raise £12bn. So I don’t need a wealth tax or anything.” She added: “We have no plans for a wealth tax.”

With taxes already at their highest level since World War II, Labor has made relatively few promises of further tax increases; one notable exception is the removal of tax breaks for private schools and non-domiciled UK residents.

Reeves also said two years ago that she would close a loophole that private equity executives use to reduce the amount of tax they pay on their share of profits, known as carried interest.

In an interview with the FT in Washington in May, Reeves joked that she would not impose a “special FT reader tax”, adding that she had “no plans” to equalize the capital gains tax rate with the income tax , and there are no plans to reduce tax deductions for capital gains tax. Pension contributions for high earners.

Conservative MPs believe the Conservatives’ promise of tax cuts in the next parliament could become an important issue at the next election and want Chancellor of the Exchequer Jeremy Hunt to start the process now.

Hunt has warned Conservative MPs not to expect big tax cuts in the autumn statement – he wants to focus on cutting inflation. However, the Chancellor is expected to use the Spring 2024 Budget to launch his campaign.

Labor has been courting business leaders and will host a business forum at its conference in Liverpool in October, which will host 200 people, up from 130 last year. The party said 150 people were on a waiting list.

The party has also doubled its sponsorship of business events at this year’s conference, which are expected to raise £500,000, up from £200,000 last year.