Chancellor Rachel Reeves has defended the government’s tax approach, stating they’ve “got the balance right” after calls from a former Labour shadow chancellor to consider a wealth tax. Reeves highlighted existing measures targeting the wealthy, including higher taxes on private jets, second homes, and increased capital gains tax.
Speaking in Scotland, Reeves noted: “Last year’s budget abolished non-dom tax status, ensuring those who make Britain their home pay taxes here. We’ve struck the right balance in taxing those who can afford it most, but any future tax decisions will follow normal budget processes.”
Her comments came after Anneliese Dodds, who resigned as a Foreign Office minister earlier this year, urged ministers to examine proposals for a one-off tax on millionaire households. Dodds, who previously served as Labour’s shadow chancellor, referenced economist Arun Advani’s 2020 Wealth Tax Commission report, which recommended a 1% levy on household wealth over £1 million as a fairer alternative to taxing workers and consumers.
When asked about Dodds’ suggestion, Reeves emphasized economic growth as the government’s top priority: “We need balanced taxation to attract investment and create jobs.” Government sources dismissed the idea, arguing wealth taxes have failed elsewhere and lack practical feasibility. “Experts agree it doesn’t work,” one source said.
Dodds reiterated her stance on Sky News, urging the Treasury to review the commission’s findings, which outlined how such a tax could function in the UK. “Even Labour’s deputy leader has proposed ideas—these deserve consideration,” she added.
The proposal has divided ministers. Crime and Policing Minister Diana Johnson called for evidence-based discussions, while Business Secretary Jonathan Reynolds rejected the idea as unrealistic. “A ‘magic’ wealth tax is daft,” Reynolds said. “It doesn’t exist globally for good reason—how would you tax assets like art or wine? Let’s be serious.”
He criticized populist rhetoric around wealth taxes, urging colleagues to focus on practical solutions: “I hear these ideas in Parliament and think, ‘Come on, get real.'”
