Labour ‘drawing up plans for £10bn extra wealth taxes’

Sir Keir Starmer and Rachel Reeves
A Labour spokesman says Sir Keir Starmer and Rachel Reeves have 'made clear that our priority is growing the economy' - Stefan Rousseau/PA

Labour is drawing up plans for wealth tax rises worth up to £10 billion, according to reports.

The Guardian reported that proposals are circulating within the party to increase capital gains tax and reform inheritance tax to make it more difficult to pass on farmland without paying tax.

Taken together, it is claimed that the measures could raise up to £10 billion.

It is understood that party insiders question the existence of the memo made reference to by The Guardian and were not provided with enough specific information by the newspaper to identify it.

However, a Labour spokesman did not explicitly rule out the possibility of the wealth tax rises.

“Keir and Rachel have made clear that our priority is growing the economy, not increasing taxes,” the spokesman said.

“We have set out fully costed, fully funded plans, with very specific tax loopholes we would close. Nothing in our plans requires any additional tax to be increased.”

The Conservatives have attempted to make tax one of the central issues of the election, accusing Labour of planning £2,094 of tax rises for every family and claiming the party is “secretly” planning to put up 17 taxes including Capital Gains Tax and Inheritance Tax.

Earlier this week, writing in The Telegraph, Steve Barclay, the Environment Secretary, warned that Labour could scrap tax breaks that allow agricultural land to be passed down tax-free.

Sir Keir Starmer, the Labour leader, has insisted throughout the election campaign that Labour will not raise taxes on “working people”, listing income tax, National Insurance and VAT.

Last week, the party also ruled out charging capital gains tax on the sale of family homes.

But Labour has not gone further despite the pressure from the Tories, only insisting it does not have any further “plans” for tax rises.

‘Lack of honesty’

Responding to the reports on Friday, Jeremy Hunt, the Chancellor, said: “Labour are privately telling the media that they are already planning a series of big new tax rises on people’s family homes, pensions and small businesses which they do not intend to set out before the election on July 4.

“This lack of honesty from Labour is exactly why people will be concerned about the prospect of an unaccountable Labour majority that will raise taxes however and whenever it wants. Keir Starmer should have the courage and conviction to be honest with the British people about the tax rises Labour are planning.”

The report comes on the same day Angela Rayner said Labour had no plans to raise council tax “at the moment”.

The deputy opposition leader said her party would have “a lot on our plate” if it won power on July 4 and suggested council tax bands were not an immediate priority.

Asked if Labour could look at council tax bands by BBC Radio Merseyside, Ms Rayner said: “Well, look, you know, I think at the moment, if I’m really honest to your listeners, we’ve got a lot on our plate.

“I want to build 1.5 million homes, which I think is a huge task, which we’re going to, you know, review planning reforms.

“We’re going to look at how we can use the Affordable Homes grant… to really get those homes built, the New Deal for Working People which is my reforms to employment which will give people secure work.

“These are our priorities, our priority is not to do anything with the council tax banding at the moment.”

Council tax row

Her comments reignited the row over whether Labour could increase council tax.

The Tories have repeatedly accused Labour of planning to put up the levy by recalculating the current bands, which would result in tax increases for millions of households.

Labour frontbenchers have contradicted each other on the issue and Sir Keir, the party’s leader, failed to rule out a council tax increase earlier this week.

Ms Rayner’s remarks were immediately seized on by the Conservatives, who claimed tax rises would be “on the cards” under a Labour government.

Laura Trott, the Chief Secretary to the Treasury, said: “Angela Rayner has confirmed big council tax rises are on the cards – just not ‘at the moment’. Rebanding of council tax is one of 17 tax rises Labour have not ruled out.

“Labour are not being honest with the British public about their tax raid, but we already know the black hole in their spending promises requires at least £2,094 in higher taxes for working families across the country.”

She went on to warn voters against handing Sir Keir “an unaccountable majority” as the Conservatives aim to shore up their support in traditionally safer seats in the face of successive dire opinion polls.

Her warnings were echoed by Rishi Sunak as he told activists at the launch event for the Welsh Tory manifesto that there was a “clear choice” on July 4.

“Continue on the plan we are on, continue to cut taxes for people at every stage of their life or the Labour Party who just want to hike up everyone’s taxes,” the Prime Minister said.

“We have seen that over the last few days. Council tax, already one of the biggest bills that most families face, we just heard today from the deputy leader of the Labour Party, it is not their plan to do it for the moment, not right now.

“But it is coming, mark my words. A future Labour government is going to whack up everyone’s taxes.”

Andrew Fisher, Jeremy Corbyn’s head of policy during his time as Labour leader, said introducing the wealth taxes “with no electoral mandate” would be “corrosive for trust in politics”.

“On the one hand this would obviously be good socially and economically,” he wrote on X, formerly Twitter.

“But to do this with no electoral mandate for it would be corrosive for trust in politics... If indeed it’s true.”