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Wes Streeting pledges 'wealth tax that works'
TL;DR
Wes Streeting proposes a 'wealth tax that works' to reform capital gains tax, aiming to raise £12bn annually. This initiative is part of his campaign for Labour leadership following his resignation as health secretary.
Key points
- Wes Streeting proposes a wealth tax that works
- Equalising capital gains tax with income tax
- Estimated to raise £12bn annually
- Addresses unfair taxation penalizing work
- Streeting resigned as health secretary last week
Mentioned in this story
Wes StreetingLabour PartySir Keir Starmer
Former Health Secretary Wes Streeting has backed the introduction of a "wealth tax that works", as part of his pitch for the Labour leadership.
Streeting is proposing equalising capital gains tax with income tax, in a reform he estimates could raise £12bn a year.
He said the change would address an unfair system that was "penalising work", while encouraging investment by offering lower rates of capital gains tax to "genuine" entrepreneurs.
Streeting set out the policy on the BBC's Political Thinking podcast, in his first in-depth broadcast interview following his resignation as health secretary last week.
He quit the cabinet after dozens of Labour MPs urged Prime Minister Sir Keir Starmer to stand down, fuelling intense speculation the former health secretary was planning a bid to replace him as party leader.
Streeting did not mount an immediate challenge following his resignation, but has since said he will seek to enter any potential Labour leadership contest.
When he met Sir Keir in Downing Street the day before he resigned from the cabinet, he told the prime minister directly he would be challenging him for the Labour leadership, Streeting told the BBC.
"As I said to the prime minister in my letter and privately, this is a government that lacks definition and also direction and vision," Streeting said. "When people don't know who you are, and what you stand for, they don't vote for you."
Streeting would need the support of 81 Labour MPs to trigger a leadership contest under the party's rules.
He said he had decided against that a few days before he resigned, after he had learned Greater Manchester Mayor and potential Labour leadership rival Andy Burnham had "found a seat".
Josh Simons announced he was standing down as the MP for Makerfield on Thursday last week, paving the way for Burnham to stand as Labour's candidate in the forthcoming by-election.
Streeting said: "It was clear that if we'd been plunged straight into a leadership contest by me or for that matter anyone else, I think it would have been seen as a deliberate attempt to get ahead of Andy Burnham's potential return."
In the meantime, Streeting has been setting out his policy agenda for his leadership campaign.
In his first major proposal, Streeting is suggesting reforms to capital gains tax, which is a levy on the profit made after selling an asset, such as property.
A report by Centre for the Analysis of Taxation in 2024 estimated reforming capital gains tax could raise £14bn.
The annual tax-free allowance for the levy is £3,000 and anything above this is taxed at rates that depend on a person's income band.
For example, higher or additional rate taxpayers have to pay 24% on gains in the current financial year.
Q&A
What is Wes Streeting's proposal for a wealth tax?
Wes Streeting proposes equalising capital gains tax with income tax as part of a 'wealth tax that works' initiative.
How much revenue does Streeting estimate his tax reform could generate?
Streeting estimates that his proposed tax reform could raise £12bn a year.
Why does Streeting believe his tax reform is necessary?
He argues that the current system penalizes work and is unfair, and his reform would encourage investment for genuine entrepreneurs.
What prompted Wes Streeting's resignation as health secretary?
Streeting resigned after numerous Labour MPs urged Prime Minister Sir Keir Starmer to step down, leading to speculation about his leadership ambitions.
