Wealth-Tax Row Grips Labour Before the Budget
A row over whether to impose a wealth tax on the richest has broken out inside Labour ahead of the autumn Budget, with allies of the Prime Minister pressing the idea and ministers resisting it. One minister insisted Andy Burnham’s spending plans were “funded by savings” rather than new taxes on wealth. The dispute lays bare the tensions over how to pay for the government’s promises.
Wealth taxes are perennially popular with the public and parts of the Labour left, but economists and the Treasury warn they are hard to design, raise less than hoped and risk driving the wealthy abroad. With costly commitments on devolution, social care and defence, and a Chancellor reluctant to raise taxes on ordinary households, the pressure to find revenue is acute. The argument is a foretaste of the difficult choices the Budget will force in October. How Mr Burnham resolves it will signal the direction of his government. Watch which way the Chancellor jumps on tax.