Former Labour leader Neil Kinnock has called for a “wealth tax” to help the government’s dwindling finances.
Lord Kinnock, who was leader from 1983 to 1992, said imposing a 2% tax on assets valued above £10m would bring in up to £11bn a year.
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“It’s not going to pay the bills, but that kind of levy does two things,” he told Sunday Morning With Trevor Phillips.
“One is to secure resources, which is very important in revenues.
“But the second thing it does is to say to the country, ‘we are the government of equity’.
“This is a country which is very substantially fed up with the fact that whatever happens in the world, whatever happens in the UK, the same interests come out on top unscathed all the time while everybody else is paying more for getting services.
“Now, I think that a gesture or a substantial gesture in the direction of equity fairness would make a big difference.”
The son of a coal miner, who became a member of the House of Lords in 2005, the Labour peer said asset values have “gone through the roof” in the past 20 years while economies and incomes have stagnated in real terms.
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In reference to Chancellor Rachel Reeves refusing to move her fiscal rules, he said the government is giving the appearance it is “bogged down by their own imposed limitations”, which he said is “not actually the accurate picture”.
A wealth tax would help the government get out of that situation and would be backed by the “great majority of the general public”, he added.
His comments came after a bruising week for Prime Minister Sir Keir Starmer, who had to heavily water down a welfare bill meant to save £5.5bn after dozens of Labour MPs threatened to vote against it.
With those savings lost – and a previous U-turn on cutting winter fuel payments also reducing savings – the chancellor’s £9.9bn fiscal headroom has quickly dwindled.
In a hint of what could come, government minister Stephen Morgan told Wilfred Frost on Sky News Breakfast: “I hold dear the Labour values of making sure those that have the broadest shoulders pay, pay more tax.
“I think that’s absolutely right.”
He added that the government has already put a tax on private jets and on the profits of energy companies.
