Former Health Secretary Wes Streeting has unveiled plans for a new HMRC income tax and capital gains tax rule, should he succeed Sir Keir Starmer as Labour Party leader and Prime Minister. Streeting resigned from his cabinet position last Thursday and is now positioning himself for a leadership bid, widely seen as competing against Andy Burnham for the top role.
Proposed Wealth Tax Reforms
Speaking on the BBC’s Political Thinking podcast, Streeting outlined a vision for a “wealth tax that works” by equalising tax rates on assets and income. He argued that the current system, where capital gains tax is significantly lower than income tax, is unfair and penalises work.
“The wealth gap in this country has widened, the opportunity gap in the country is widening and the gap between earned income and unearned income has also widened,” Streeting said. He contrasted a hardworking woman with a less diligent asset owner, stating: “She slogs her guts out, he puts in far less effort, yet the state rewards him more than her. And we wonder why people are angry.”
Economic Rationale
Streeting emphasised that his proposals are not only about fairness but also economic growth: “The system is penalising work. It’s not fair and it’s bad for our economy. We need a wealth tax that works. A pound made from simply owning assets should not be taxed less than a pound made from a hard day’s work.” He described a “good pro-business, pro-growth, pro-productivity argument” behind the reforms.
Leadership Context
“The kite that I am flying in this leadership contest will be to equalise those rates with allowances for genuine entrepreneurialism, investment, reinvestment, so that we can be both pro-worker, pro-entrepreneurialism, pro-fairness, and in the course of that generate up to £12bn worth of revenues,” Streeting stated. He also addressed the timing of his bid, saying he avoided triggering an immediate leadership contest to prevent appearing to undercut Burnham’s potential return. “If there’s one thing that we need to do coming out of a change in leadership, it is to bring the tribes of the Labour party together, to unite around one leader as one team, drawing on Labour’s different political traditions to unite progressives and beat Reform,” he added.
