UK Government Refuses to Rule Out Wealth Tax Amid Budget Pressure

The Labour government, led by Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves, has declined to rule out the introduction of a wealth tax targeting Britain's richest citizens amid mounting pressure to raise revenues following welfare spending U-turns. Former Labour leader Lord Kinnock has advocated for a 2% tax on assets over £10 million, suggesting it could raise up to £11 billion annually and gain public support, a position that ministers have tacitly acknowledged without officially endorsing the term 'wealth tax.' Instead, the government appears to favor measures like extending income tax threshold freezes and increasing capital gains tax, which could be framed as targeting wealthier individuals under different labels. Ministers emphasize fairness in taxation while balancing the need to support economic growth, with some warning that wealth taxes historically have been ineffective and sometimes counterproductive. Starmer has avoided definitive commitments on tax specifics but insists those with the broadest shoulders should bear the greatest burden, reflecting ongoing internal debates as the autumn budget approaches. Overall, the government seeks to reconcile fiscal responsibility with political pressures from Labour backbenchers and public expectations for a fairer tax system.