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Shadow chancellor rules out higher levies on property, capital gains and top earners as her party seeks to grab the centre ground
Rachel Reeves has ruled out any version of a wealth tax if Labour forms the next government, declaring that additional taxation will not lead to prosperity.
In an interview with The Telegraph, the shadow chancellor launches a bold bid for support from businesses and wealthier households, saying she will not introduce a levy to target wealth or expensive properties, and will not increase capital gains tax or the top rate of income tax.
Ms Reeves puts an end to speculation over the prospect of either a discrete wealth or mansion tax, or higher levies for those earning money from stocks and shares or buy-to-let properties.
She also confirms that Sir Keir’s 2020 leadership pledge to increase the top rate of income tax is now off the table – making explicit a suggestion by the party leader in June that he was no longer keen on the idea.
Ms Reeves also effectively recants remarks made in September 2021 when she said that “people who get their income through wealth should have to pay more”.
At the time she highlighted those “who get their incomes through stocks and shares and buy-to-let properties”.
Labour frontbenchers are also being told they should draw up reforms or identify schemes that can be scrapped if they want to fund new projects, as “the money is simply not going to be there”.
She added: “I don’t have any spending plans that require us to raise £12 billion worth of money. So I don’t need a wealth tax or any of those things ... We have no plans for a wealth tax.”
“We don’t have any plans to increase taxes outside of what we’ve said. I don’t see the way to prosperity as being through taxation. I want to grow the economy.” She added of the prospect of any form of wealth tax: “We won’t be doing that. It’s a denial.”
A Labour source said the denial also applied to “any form of ‘mansion tax’”, which has also been discussed by Labour in recent years.
[Post edited 27 Aug 2023 8:32]
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Your wealth is safe in Labour hands on 17:34 - Aug 27 with 1601 views
Your wealth is safe in Labour hands on 14:34 - Aug 27 by Ryorry
Forgotten how many times multiple people on here have pointed out that we're a year away from a GE; that none of the kite-flying sounding-boards should be taken seriously now; & that powder is best kept dry.
I agree with you up to a point, but I'm finding it very worrying that Labour are publicly stating positions dangerously further right of where they need to be to win the election, positions that they might find it hard to row back from, and might have little intention of so doing.
Your wealth is safe in Labour hands on 14:30 - Aug 27 by HARRY10
Our resident tightie, unable to help himself, yet again
" he did cut more to pubic*services in one year than Osborne did in his six years as chancellor. "
Actually, he didn't, and I challenge you to give evidence to your claim.
What Healey faced was trying to pick up the country's economy after the disastrous 'Dash for Growth' of the Tory Chancellor Antony Barber. The sort of policy you more readily associate with South American countries.
If you look at how the rise in oil/gas prices has affected the economy currently, the consider then how the economy would fare with the price of oil quadrupling, as it did in Healey's first year. Yes, oil prices rose by four fold thanks to OPEC.
Copying from the Farage play book GB yet again hides a massive lie amongst universally acknowledged truths. A tactic similarly favoured by the odious stick insect.
And whatever cuts were brought in by Healey, they were a response to the twin blows of the oil price rise and Tory mismanagement. Osborne's cuts were politically motivated, as cuts to nurses bursaries have shown.
* Freudian slip there. GB ?
"The spending cuts Healey imposed - as godfather of "austerity" economics - produced more savings in one year than George Osborne has planned for nearly a decade".
Your wealth is safe in Labour hands on 16:12 - Aug 27 by Swansea_Blue
I don’t see why people worry about this. I’d be more interested in what they’re going to do about creating good job/career opportunities for the rest of us and our kids. Not getting caught up in a culture war over taxes for a very small number of high earners. Whatever they do there won’t affect most of us. Sure, it may be nice to close some of the loopholes for the very richest, but she’s right that that it would have little impact on prosperity for everyone else.
If they can make working worthwhile again for the millions who’ve dropped into in-work poverty and halt the real terms wages decline for the middle earners, then they’ll be on to something whatever the do for the top 1%.
"Ms Reeves puts an end to speculation over the prospect of either a discrete wealth or mansion tax, or higher levies for those earning money from stocks and shares or buy-to-let properties."
It is refreshing to see that she is entirely comfortable with the already wealthy fleecing the less well off via rents. It's the radical alternative the country is crying out for.
"They break our legs and tell us to be grateful when they offer us crutches."
Your wealth is safe in Labour hands on 17:34 - Aug 27 by NthQldITFC
I agree with you up to a point, but I'm finding it very worrying that Labour are publicly stating positions dangerously further right of where they need to be to win the election, positions that they might find it hard to row back from, and might have little intention of so doing.
To put it crudely, I think they're not just lacking in confidence, they're sh1t scared of something going horribly wrong (eg an uptick for the tories if the economy should for some as yet unknown reason temporarily improve).
To that end, they're testing the temperature of the water in case they need to mop up somewhat harder tory voters than they previously envisaged.
Not that I actually know of course, but it seems a reasonable guess. I'd still be miles happier if Andy Burnham were LP leader, but guess he still doesn't want the gig.
Your wealth is safe in Labour hands on 14:34 - Aug 27 by Ryorry
Forgotten how many times multiple people on here have pointed out that we're a year away from a GE; that none of the kite-flying sounding-boards should be taken seriously now; & that powder is best kept dry.
Don't hold your breath Ryorry, you are going to be sorely disappointed.
"They break our legs and tell us to be grateful when they offer us crutches."
Your wealth is safe in Labour hands on 17:34 - Aug 27 by NthQldITFC
I agree with you up to a point, but I'm finding it very worrying that Labour are publicly stating positions dangerously further right of where they need to be to win the election, positions that they might find it hard to row back from, and might have little intention of so doing.
There can be no rowing back from what Reeves said today, or indeed other areas where they have ruled things out.
I might add that I thought Blair was much more cautious than he needed to be, but the current Labour Party appear to be almost paranoid in their caution, something summed up best by what Starmer said after Uxbridge.
“We are doing something very wrong if policies put forward by the Labour party end up on each and every Tory leaflet. We’ve got to face up to that and learn the lessons.”
The logical outcome of such a bonkers statement doesn't bear thinking about, but the subsequent treatment of Khan, and the fact that Andy Burnham recently stated that most of the contact he has with the upper echelons of the party is through “reading briefings about me in the newspapers”, suggests a bunker mentality at Labour HQ, which doesn't augur well for being in government.
[Post edited 27 Aug 2023 18:14]
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Your wealth is safe in Labour hands on 17:57 - Aug 27 with 1540 views
the interesting question is whether labour will commit to reversing the tory's pre-election tax cuts (which feel inevitable). that seems the only way the tories still have to make tax an election issue.
And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show
Your wealth is safe in Labour hands on 17:57 - Aug 27 by lowhouseblue
the interesting question is whether labour will commit to reversing the tory's pre-election tax cuts (which feel inevitable). that seems the only way the tories still have to make tax an election issue.
It certainly is, and my view (given the mood music from them) is that they won't oppose any tax cuts the Tories offer.
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Your wealth is safe in Labour hands on 18:04 - Aug 27 with 1520 views
Your wealth is safe in Labour hands on 18:01 - Aug 27 by DJR
It certainly is, and my view (given the mood music from them) is that they won't oppose any tax cuts the Tories offer.
they'll commit the revenue the tax cut would cost as an otherwise unbudgeted addition to the nhs.
And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show
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Your wealth is safe in Labour hands on 18:28 - Aug 27 with 1491 views
What should be obvious is that there are two groups of Tory voters.
Those right wing cranks who will believe whatever their 'betters' tell them. It matters little what Labour say in any manifesto. You only have to read what some of the right wing cranks on here claim.
The other group are those who just want rid of this lot, whatever it takes. In safe Tory seat after seat we have seen huge swings, almost record-breaking. Of the two groups the latter is in the majority, by a huge amount.
I think some near the top of labour are confusing their 'safe' steady as she goes policy with what is really causing their huge lead. Voters want a change. In the main only the cranks and those who benefit from the current set up (almost mutually exclusive) are sticking with the Tories.
Voters want to know that schools and hospitals will be properly funded. NHS dentists. Decent care homes, clean streets. All of which were not previously wild, mad lurches into dangerous leftish territory. They are what the rest of Europe by and large expects, and get. As did the UK until 2010.
The soaring cost of living IS affecting the rest of Europe, but they do not have government following absurd and dangerous ideology, led by someone who seems as in touch with reality as some festival goer tripping off their t its.
A man whose blind optimism is as much an insult to voters as it is irritating -
Labour need to spend more time explaining how they are different from the current lot, rather than trying to emphasis similarities in approach.
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Your wealth is safe in Labour hands on 18:58 - Aug 27 with 1474 views
Your wealth is safe in Labour hands on 18:28 - Aug 27 by HARRY10
What should be obvious is that there are two groups of Tory voters.
Those right wing cranks who will believe whatever their 'betters' tell them. It matters little what Labour say in any manifesto. You only have to read what some of the right wing cranks on here claim.
The other group are those who just want rid of this lot, whatever it takes. In safe Tory seat after seat we have seen huge swings, almost record-breaking. Of the two groups the latter is in the majority, by a huge amount.
I think some near the top of labour are confusing their 'safe' steady as she goes policy with what is really causing their huge lead. Voters want a change. In the main only the cranks and those who benefit from the current set up (almost mutually exclusive) are sticking with the Tories.
Voters want to know that schools and hospitals will be properly funded. NHS dentists. Decent care homes, clean streets. All of which were not previously wild, mad lurches into dangerous leftish territory. They are what the rest of Europe by and large expects, and get. As did the UK until 2010.
The soaring cost of living IS affecting the rest of Europe, but they do not have government following absurd and dangerous ideology, led by someone who seems as in touch with reality as some festival goer tripping off their t its.
A man whose blind optimism is as much an insult to voters as it is irritating -
Labour need to spend more time explaining how they are different from the current lot, rather than trying to emphasis similarities in approach.
Are you going to address this and apologise Harold? You were quick enough to jump on my post at the time.
Your wealth is safe in Labour hands by GlasgowBlue27 Aug 2023 17:34 "The spending cuts Healey imposed - as godfather of "austerity" economics - produced more savings in one year than George Osborne has planned for nearly a decade".
https://www.bbc.co.uk/news/uk-politics-34438196
I was giving Healy a compliment you silly Billy. One of the best Prime Minster's we never had.
Your wealth is safe in Labour hands on 17:27 - Aug 27 by DJR
That is true, but I still think (and I may be wrong) that Blair would have been more radical in this situation given that growth is now a problem.
From what I can recall, Blair only ruled out increases in the rates of income tax, and indeed in his first year brought in a tax on the privatised utilities which raised £5 billion, which in real terms is far more than Reeves' proposals for VAT on private schools and non-doms will raise.
And when it comes to Healey's cuts, there was much more slack in the system, rather than the position in 2010, when public sector savings had been on the agenda for 30 odd years and there was precious little to cut without doing the grave damage we are now experiencing in things like the criminal justice system. As an aside, I can remember in 1978 claiming unemployment benefit for a couple of weeks in my summer term, with no intention or requirement of seeking work.
[Post edited 27 Aug 2023 17:29]
I suppose another thing that makes difficult any proper comparison with Healey's cuts is that Osborne's cuts were made worse by a 3-4% rise in population, and by the increasing needs of an ageing population. In contrast, there was a fall in the UK population in each of 1976, 1977 and 1978, and an ageing population was not really an issue at all.
[Post edited 28 Aug 2023 7:59]
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Your wealth is safe in Labour hands on 08:11 - Aug 28 with 1326 views
Your wealth is safe in Labour hands on 07:54 - Aug 28 by DJR
I suppose another thing that makes difficult any proper comparison with Healey's cuts is that Osborne's cuts were made worse by a 3-4% rise in population, and by the increasing needs of an ageing population. In contrast, there was a fall in the UK population in each of 1976, 1977 and 1978, and an ageing population was not really an issue at all.
[Post edited 28 Aug 2023 7:59]
The point I was making was that by taking very difficult decisions, Healy left the economy in very good shape for Thatcher to inherit. Likewise, Major left the economy in food shoe for Blair.
Since those two changes in government, no incoming PM has had a decent economy to work with. Cameron in 2010 and Starmer, hopefully, next year. So expectations have to be lower unfortunately.
I’m sure that Starmer would Ike to be bolder, but he will work with what he has got. If he gets a second term then I’m sure we will be far more radical.
Your wealth is safe in Labour hands on 08:11 - Aug 28 by GlasgowBlue
The point I was making was that by taking very difficult decisions, Healy left the economy in very good shape for Thatcher to inherit. Likewise, Major left the economy in food shoe for Blair.
Since those two changes in government, no incoming PM has had a decent economy to work with. Cameron in 2010 and Starmer, hopefully, next year. So expectations have to be lower unfortunately.
I’m sure that Starmer would Ike to be bolder, but he will work with what he has got. If he gets a second term then I’m sure we will be far more radical.
[Post edited 28 Aug 2023 8:12]
That's fair enough but where we perhaps disagree is whether Starmer could be bolder. I believe he could be if he chose to increase taxes on those at the top, but those advising him clearly think it better to rule this out so as to avoid it being what they would regard as a hostage to fortune. The issue it seems to me is that (at a time when it's difficult to see Labour not winning the next election) it means not addressing the issue which the IFS raised of there being declining public services without tax increases.
[Post edited 28 Aug 2023 8:27]
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Your wealth is safe in Labour hands on 09:54 - Aug 28 with 1265 views
Your wealth is safe in Labour hands on 18:04 - Aug 27 by lowhouseblue
they'll commit the revenue the tax cut would cost as an otherwise unbudgeted addition to the nhs.
Their “fiscal rules” allow this?
Those don’t allow for reversing the two-child benefit limit apparently. And that’s filling a much smaller hole that would take hundreds of thousands of children out of poverty.
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Your wealth is safe in Labour hands on 09:57 - Aug 28 with 1261 views
Your wealth is safe in Labour hands on 09:54 - Aug 28 by Darth_Koont
Their “fiscal rules” allow this?
Those don’t allow for reversing the two-child benefit limit apparently. And that’s filling a much smaller hole that would take hundreds of thousands of children out of poverty.
tory tax cuts will come out of them undershooting their borrowing projections next spring. so it will be new money within labour's fiscal rules.
And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show
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Your wealth is safe in Labour hands on 10:10 - Aug 28 with 1238 views
Your wealth is safe in Labour hands on 17:03 - Aug 27 by DJR
I don't think it's anything to do with a culture war over taxes. As I said on another thread, the IFS have recently said we face a future of either higher taxes or declining public services, so a debate about raising taxes appears to be perfectly valid, given that otherwise the only game in town is somewhat elusive growth to fund increases in public spending.
Sadly, no party appears to willing to argue the case for higher taxes more generally to fund public services more akin to those in European countries with higher rates of general taxation. That means having to consider raising tax on those with the broadest shoulders.
As I said on that other thread, a person owning a £50 million property in Westminster pays less council tax than someone owning a Band C property where I live. And my neighbours who converted their property from a two bedroom to a five bedroom property currently pay less tax than we do on a four bedroom property, because their conversion took place after the 1991 date for council tax valuations.
Not only are these anomalies unfair, but they seem to me, along with others (such as the lower rates on capital gains than income), to offer scope for raising sizeable revenues which the country is desperately in need of. to fund public services. And when it comes to property or CGT, we are clearly talking about more than the 1%.
Of course, those may then say, what about a widow on a low income living in a £2 million property? The answer to that is for her to downsize, rather than to continue to benefit from what is after all unearned increases in wealth. And maybe higher taxes on property would prevent property prices from reaching the ridiculous rates they do now.
Indeed, if we went a bit further, just look what a wealth tax might achieve according to the Wealth Commission Report from 2020.
At a threshold of £1 million per household (assuming two individuals with £500,000 each) and a rate of 1% per year on wealth above the threshold, a one-off wealth tax would raise £260 billion over five years after administration costs. This is equivalent to raising VAT by 6p or the basic rate of income tax by 9p for the same period.
At a threshold of £4 million per household (assuming two individuals with £2 million each) and a rate of 1% per year on wealth above the threshold, a one-off wealth tax would raise £80 billion over five years after administration costs.
Under the design recommended by the Commission, a one-off wealth tax would:
Be paid by any UK resident (including ‘non -doms’ and recent emigrants) with personal wealth above a set threshold. Include all assets such as main homes and pension pots, as well as business and financial wealth, but minus any debts such as mortgages. Be payable in instalments over five years.
The Commission concluded that a one-off wealth tax would be:
Fair. Wealth provides opportunity, security and spending power. Those with the most wealth have the ‘broadest shoulders’ to afford an additional contribution to society in times of crisis. Efficient. Unlike taxes on work or spending, a one-off wealth tax would not discourage economic activity. The administrative costs would also be small as a proportion of the revenue raised. Very difficult to avoid. A one-off wealth tax could not be avoided by emigrating or moving money offshore. In fact, if well designed, it would be very difficult to avoid the tax legally.
EDIT: And this suggests that equalising CGT rates with income tax rates could raise £16 billion a year.
“Of course, those may then say, what about a widow on a low income living in a £2 million property? The answer to that is for her to downsize, rather than to continue to benefit from what is after all unearned increases in wealth. And maybe higher taxes on property would prevent property prices from reaching the ridiculous rates they do now.”
Why should people have to move homes just because of market conditions?
People don’t necessarily benefit from their home being valued differently. It an estate agent pops around tomorrow and adds 50k to the value of my home, I can’t go out and spend 50k.
If you wanted to heavily tax second homes, have at it.
Seems to me you need to grab “wealth” when it is being used or accumulated, not when a market rises.
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Your wealth is safe in Labour hands on 10:51 - Aug 28 with 1211 views
Your wealth is safe in Labour hands on 10:20 - Aug 28 by eireblue
“Of course, those may then say, what about a widow on a low income living in a £2 million property? The answer to that is for her to downsize, rather than to continue to benefit from what is after all unearned increases in wealth. And maybe higher taxes on property would prevent property prices from reaching the ridiculous rates they do now.”
Why should people have to move homes just because of market conditions?
People don’t necessarily benefit from their home being valued differently. It an estate agent pops around tomorrow and adds 50k to the value of my home, I can’t go out and spend 50k.
If you wanted to heavily tax second homes, have at it.
Seems to me you need to grab “wealth” when it is being used or accumulated, not when a market rises.
Spot on.
Add to that, such a forced move could end up costing the state more anyway, because the 75+ age group, particularly if living on their own, not only don't usually have the physical wherewithal to move to a new house/flat, but would be emotionally uprooted from their familiar surroundings where they are likely to have friends & neighbours providing informal community support both practical & emotional, costing the state nothing.
Such a policy would be particularly damaging in rural areas where there is no such thing as a market in "small houses". Those advocating the policy rarely seem to think of the impact on the health of the individuals who'd be affected.
Your wealth is safe in Labour hands on 10:10 - Aug 28 by Darth_Koont
So you’re saying they could commit to reversing the 2-child benefit limit that is the lowest hanging fruit in alleviating child poverty?
That’s a relative drop in the ocean so why won’t they?
so you're saying that you don't want to spend any extra money on the nhs? (is that how this style of "debate" works?)
[Post edited 28 Aug 2023 13:14]
And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show
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Your wealth is safe in Labour hands on 13:18 - Aug 28 with 1141 views
Your wealth is safe in Labour hands on 13:06 - Aug 28 by lowhouseblue
so you're saying that you don't want to spend any extra money on the nhs? (is that how this style of "debate" works?)
[Post edited 28 Aug 2023 13:14]
No. I’m trying to work out how the “fiscal rules” work when they appear highly selective.
“Yes, we can pour extra billions into the NHS. No, we cannot transform the lives of hundreds of thousands of children for 1 or 2 billion”.
A cynic would suggest that even though we’re talking about a much bigger spending commitment there are more votes in the former than the latter. In fact the latter probably doesn’t go down well at all among the austerity-loving, welfare-hating focus groups.
Of course, if Labour under Starmer actually stood for something on the issues facing the UK then there wouldn’t be this pork-barrel nonsense. Nor indeed a sense of either/or.
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Your wealth is safe in Labour hands on 13:52 - Aug 28 with 1085 views
For economics virgins like me, is there any sort of simplified 'whole of the economy' model out there which you can play around with things like taxation rates, expenditure, UBI and see the feedbacks and self-balancing / runaway effects of various actions?
I'm thinking a nice GUI with sliders and meters and graphs would be fun to play with, but a spreadsheet would be cool too.
I do realise that economics is barely a science, so it would be doubly unwise in the extreme to draw any conclusions from such a crude conceptual thing.
Your wealth is safe in Labour hands on 10:20 - Aug 28 by eireblue
“Of course, those may then say, what about a widow on a low income living in a £2 million property? The answer to that is for her to downsize, rather than to continue to benefit from what is after all unearned increases in wealth. And maybe higher taxes on property would prevent property prices from reaching the ridiculous rates they do now.”
Why should people have to move homes just because of market conditions?
People don’t necessarily benefit from their home being valued differently. It an estate agent pops around tomorrow and adds 50k to the value of my home, I can’t go out and spend 50k.
If you wanted to heavily tax second homes, have at it.
Seems to me you need to grab “wealth” when it is being used or accumulated, not when a market rises.
I only gave this as an example, but I can't imagine many impoverished widows living in, say, a £2 million property in Kensington.
And it doesn't detract from the fact that the switch away from rates has meant the wealthy pay very little in tax for owning their own (valuable} home.
Rates after all were based on rental values, and their abolition seemed designed to unfairly benefit the wealthy.
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Your wealth is safe in Labour hands on 14:26 - Aug 28 with 1048 views
Your wealth is safe in Labour hands on 10:51 - Aug 28 by Ryorry
Spot on.
Add to that, such a forced move could end up costing the state more anyway, because the 75+ age group, particularly if living on their own, not only don't usually have the physical wherewithal to move to a new house/flat, but would be emotionally uprooted from their familiar surroundings where they are likely to have friends & neighbours providing informal community support both practical & emotional, costing the state nothing.
Such a policy would be particularly damaging in rural areas where there is no such thing as a market in "small houses". Those advocating the policy rarely seem to think of the impact on the health of the individuals who'd be affected.
But this is an argument for continuing what I regard as unjust system where valuable homes are not taxed properly.
In any event, many elderly people do choose to downsize, and if you have £2 million pounds to do it, there must be some choice.
Alternatively, if this did prove to be a real issue, there could be put in place arrangements to recover the money after death, in much the same way as is the case with care fees.
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