Wes Streeting has unveiled proposals for a wealth tax as part of his campaign for the Labour leadership. The former Health Secretary criticized the current tax system as unjust, penalizing hard work, and called for a significant overhaul.
Streeting, who has expressed interest in running in any leadership contest against Keir Starmer, advocated for aligning capital gains tax rates with income tax rates, suggesting this adjustment could generate £12 billion annually. Currently, higher and additional rate taxpayers face a 24% tax on gains, while Streeting’s plan would see this rate equalized with income tax rates of 40% for higher rate taxpayers and 45% for additional rate taxpayers.
Additionally, Streeting proposed measures to close loopholes that allow individuals to disguise work income as capital gains, such as through personal service companies or stock-based compensation schemes.
Highlighting the disparity between taxing earned income versus asset ownership, Streeting emphasized the need for a fairer taxation system. He argued that those who earn money through labor should not be taxed more than those who generate income from passive assets.
Various organizations, including the IFS, Resolution Foundation, Tax Policy Associates, and the Labour Growth Group, have also advocated for taxing gains at the same rate as income above a reasonable return on the initial investment.
Streeting’s call for tax reform comes after his resignation speech, where he cautioned that Labour must change its direction to avoid losing power to Reform UK. His departure from the cabinet amid calls for the PM to step down has fueled speculation about a potential leadership challenge.
Meanwhile, Chancellor Rachel Reeves is set to announce a cost of living strategy aimed at reducing consumer expenses. The plan includes slashing tariffs on over 100 items, such as tomato ketchup and biscuits, until 2028, and introducing fare-free travel for school children in England starting in August.