Labour calls for wealth tax

The shadow chancellor suggested those with ‘the broadest shoulders’ should share more of the burden to help the economy recover from Covid-19.

The shadow chancellor, Anneliese Dodds, said those with ‘the broadest shoulders’ should share more of the burden of rebuilding the economy, warning against hitting those on low or middle incomes.

Speaking on the BBC’s Andrew Marr Show ahead of Rishi Sunak’s mini-Budget this week, Dodds said: ‘The best way to deal with the cost of this crisis is to ensure that our economy grows.

‘If we do that, that will erode the value of the debt for as long as interest rates stay low. I think it is really important we recognise that because that will provide the context for any decisions around taxation.’

A recent YouGov poll found 61% of the population supported a tax on those with assets in excess of £750,000, excluding pensions and the value of their residential property. Last week the former head of the civil service said a tax on the wealthy is a real possibility following the carnage caused by Covid-19. According to research by the Institute of Fiscal Studies (IFS), the tax could be levied on assets such as property, pensions, securities or works of art.

Recent data released by the Office for National Statistics showed that the UK’s debt is currently larger than the economy for the first time since 1963. The nation borrowed a record £55bn in May, lifting the total figure over the last year by £173bn to an overall £1.95tn. This equates to 100.9% of GDP. A UK wealth tax could raise as much as £174bn, according to London City University’s tax reform advocate Richard Murphy.