Labour rules out wealth tax if party wins next election

Shadow chancellor Rachel Reeves has ruled out any version of a wealth tax on the richest in society should Labour win the next general election.

She told the Sunday Telegraph extra money for public services would have to come from economic growth.

Ms Reeves confirmed Labour would not target expensive houses, increase capital gains tax or put up the top rate of income tax.

“I don’t see the way to prosperity as being through taxation,” she said.

The shadow chancellor told the newspaper Labour would instead do “whatever it takes” to attract business investment into the UK.

The interview comes as Labour steps up efforts to demonstrate it can be trusted with the economy – and further distance itself from the policies of former leader Jeremy Corbyn – ahead of an election that is expected next year.

Ms Reeves also told the Sunday Telegraph her preparations for government include “spending an awful lot of time with businesses”.

Labour says it has it has attracted a surge of interest from businesses at its key party conference, which takes place in October. The party said the number of attendees at its business forum has gone up by 50% in a year.

The party’s leadership has been insisting for some time that it will not make unfunded spending commitments.

But the left has said Labour should instead raise taxes, rather than lower its sights – and left-wing campaign group Momentum described the latest move as “shameful”.

The group said in a post on X, formerly Twitter: “Wealth taxes are hugely popular. This is a Labour Leadership in hock to corporate interests.”

Labour’s strategists are content to provoke the ire of the left, partly as a way to emphasise how far the party has changed since the Corbyn era.

But they are also trying to insulate Labour from anticipated Conservative attacks at the next election.

By explicitly ruling out tax options, they believe this will blunt Tory warnings of a Labour tax bombshell to come.

The Conservatives, though, have accused Labour of taking people for fools, arguing that even the party’s existing policies would push taxes up.

Meanwhile, Labour Party chair Anneliese Dodds defended Labour’s decision to rule out a wealth tax, telling BBC Radio 4’s Broadcasting House programme the party wanted to be “very careful with tax policy”.

Ms Dodds said Labour wanted to avoid what she said was “economic chaos” under the Conservatives, “particularly following the mini-budget” under Liz Truss. She said Labour wanted to “rebuild” investors’ confidence in the UK economy.

Labour would make “different choices from the Conservatives”, Ms Dodds said, as she highlighted the party’s plans to raise funds by replacing the so-called “non-dom” taxpayer status and ending the charitable status of private schools.