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UK government has ‘got the balance right’ on tax, says Rachel Reeves | UK government has ‘got the balance right’ on tax, says Rachel Reeves |
(30 minutes later) | |
Chancellor responds to calls for wealth tax on millionaire households | Chancellor responds to calls for wealth tax on millionaire households |
The government has “got the balance right” on tax, Rachel Reeves has insisted after a former Labour shadow chancellor said she should consider introducing a wealth tax. | The government has “got the balance right” on tax, Rachel Reeves has insisted after a former Labour shadow chancellor said she should consider introducing a wealth tax. |
The chancellor said she had already increased taxes on the wealthiest in society with higher levies “on private jets, on second homes, and increased capital gains tax”. | The chancellor said she had already increased taxes on the wealthiest in society with higher levies “on private jets, on second homes, and increased capital gains tax”. |
Speaking to reporters in Scotland, Reeves said: “In the budget last year, we got rid of the non-domicile status in our tax system, so people who make Britain their home have to pay their taxes here. | Speaking to reporters in Scotland, Reeves said: “In the budget last year, we got rid of the non-domicile status in our tax system, so people who make Britain their home have to pay their taxes here. |
“I think we’ve got the balance right in terms of how we tax those with the broadest shoulders, but any further decisions will be ones that are made at a budget in the normal way.” | “I think we’ve got the balance right in terms of how we tax those with the broadest shoulders, but any further decisions will be ones that are made at a budget in the normal way.” |
Reeves was speaking after Anneliese Dodds, who resigned as a Foreign Office minister earlier this year over aid cuts, said ministers should “look carefully” at proposals for a one-off levy on millionaire households. | Reeves was speaking after Anneliese Dodds, who resigned as a Foreign Office minister earlier this year over aid cuts, said ministers should “look carefully” at proposals for a one-off levy on millionaire households. |
In an interview with the Guardian, Dodds, who served as Keir Starmer’s shadow chancellor in opposition, pointed to the work of the economist Arun Advani. In 2020, Advani’s wealth tax commission recommended a one-off 1% levy on household wealth above £1m as a better way of raising revenue than taxing workers and consumers. | In an interview with the Guardian, Dodds, who served as Keir Starmer’s shadow chancellor in opposition, pointed to the work of the economist Arun Advani. In 2020, Advani’s wealth tax commission recommended a one-off 1% levy on household wealth above £1m as a better way of raising revenue than taxing workers and consumers. |
Asked about Dodds’ suggestion, Reeves said: “The No 1 priority of this government is to grow the economy … We’ve got to get the balance right on taxation because we want that investment, we want those jobs to come here.” | Asked about Dodds’ suggestion, Reeves said: “The No 1 priority of this government is to grow the economy … We’ve got to get the balance right on taxation because we want that investment, we want those jobs to come here.” |
Government sources argued there was “not a proposition for a wealth tax on the table” and pointed to numerous examples where a wealth tax had not worked in other countries. “Clever people and all the economists are saying it doesn’t work,” one source said. | |
Speaking to Sky News’ Electoral Dysfunction podcast, Dodds said the Treasury should consider the evidence from the wealth tax commission, which had “looked at all of that evidence [on wealth taxes] and set out how it would be possible to deliver something like that in a UK context”. | Speaking to Sky News’ Electoral Dysfunction podcast, Dodds said the Treasury should consider the evidence from the wealth tax commission, which had “looked at all of that evidence [on wealth taxes] and set out how it would be possible to deliver something like that in a UK context”. |
“We’ve seen the deputy leader of the Labour party, for example, put forward suggestions. I think it’s important for all of those to be considered now,” she said. | “We’ve seen the deputy leader of the Labour party, for example, put forward suggestions. I think it’s important for all of those to be considered now,” she said. |
Different ministers have expressed conflicting views on proposals for a wealth tax. Earlier on Friday, Diana Johnson, the crime and policing minister, said it was “important … that all these issues are looked at and discussed and we look at the evidence about what will work and what won’t”. | Different ministers have expressed conflicting views on proposals for a wealth tax. Earlier on Friday, Diana Johnson, the crime and policing minister, said it was “important … that all these issues are looked at and discussed and we look at the evidence about what will work and what won’t”. |
Last week, Jonathan Reynolds, the business secretary, dismissed the idea of a “magic” wealth tax as “daft” and told his colleagues to “get serious”. | Last week, Jonathan Reynolds, the business secretary, dismissed the idea of a “magic” wealth tax as “daft” and told his colleagues to “get serious”. |
Reynolds told GB News that a tax like that “doesn’t exist anywhere in the world. Switzerland has a levy, but they don’t have capital gains or inheritance tax. | |
“We’re not going to do anything daft like that. And I say to people: ‘Be serious about this’ … What if your wealth was not in your bank account, [what if it was] in fine wine or art? How would we tax that? This is why this doesn’t exist. | |
“There’s a lot of populism out about this, and I’m frustrated to see it. I see colleagues sometimes say this in parliament and I say: ‘Come on, get serious.’” | “There’s a lot of populism out about this, and I’m frustrated to see it. I see colleagues sometimes say this in parliament and I say: ‘Come on, get serious.’” |
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