Wes Streeting Supports Introduction of Effective Wealth Tax
Former Health Secretary Wes Streeting has endorsed the implementation of a "wealth tax that works" as part of his campaign for the Labour leadership.
Streeting proposes equalising capital gains tax with income tax, a reform he estimates could generate £12bn annually.
He stated that this change would rectify an unfair system that currently "penalises work," while promoting investment by offering reduced capital gains tax rates to "genuine" entrepreneurs.
Policy Announcement and Political Context
Streeting detailed the policy during an interview on the BBC's Political Thinking podcast, marking his first comprehensive broadcast interview following his resignation as health secretary last week.
He resigned from the cabinet after numerous Labour MPs called on Prime Minister Sir Keir Starmer to step down, intensifying speculation that Streeting intended to challenge him for the party leadership.
Although Streeting did not immediately launch a leadership challenge after resigning, he has since confirmed his intention to enter any forthcoming Labour leadership contest.
When meeting Sir Keir at Downing Street the day before his resignation, Streeting informed the prime minister directly of his plan to contest the Labour leadership, as he 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."
Under Labour's rules, Streeting would require the backing of 81 Labour MPs to initiate a leadership contest.
He revealed that he decided against triggering a contest a few days before resigning, after learning that Greater Manchester Mayor and potential leadership contender Andy Burnham had "found a seat."
Josh Simons announced his resignation as the MP for Makerfield on Thursday last week, clearing the way for Burnham to stand as Labour's candidate in the upcoming by-election.
Streeting commented:
"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."
Capital Gains Tax Reform Proposal
Meanwhile, Streeting has been outlining his policy platform for his leadership campaign.
His first significant proposal involves reforming capital gains tax, which is levied on profits made from selling assets such as property.
A 2024 report by the Centre for the Analysis of Taxation estimated that reforming capital gains tax could raise £14bn.
The current annual tax-free allowance for capital gains tax is £3,000, with rates applied above this threshold depending on an individual's income band.
For instance, higher or additional rate taxpayers pay 24% on gains in the current financial year.
Streeting suggests aligning capital gains tax rates with the three income tax bands: 20%, 40%, and 45%.
Under his proposal, a person's capital gains tax band would be determined by combining their income and profits from assets.
He also proposes closing loopholes that enable individuals to disguise income from work as capital gains.
Additionally, lower capital gains tax rates would be offered to entrepreneurs who take risks in building companies.
This policy differs from the wealth tax proposed by the Green Party of England and Wales, which suggests an annual tax of 1% on assets above £10m and 2% on assets exceeding £1bn.
Views on Brexit and Lord Mandelson Appointment
During the Political Thinking interview, Streeting was questioned about his stance on Brexit, a subject he addressed in a speech last weekend.
In that speech, he described the UK's departure from the European Union following the 2016 referendum as a "catastrophic mistake" and expressed that the UK should "one day" rejoin the bloc.
However, Streeting told the BBC:
"In order to rejoin, there's something fundamental that would have to be true, which is, it would have to be the settled will of the country."
Streeting was also asked about the appointment of Lord Peter Mandelson as the UK's ambassador to the US.
Lord Mandelson was dismissed last year following new revelations about the extent of his relationship with the late sex offender Jeffrey Epstein.
Streeting stated:
"I wouldn't have appointed Mandelson based on what was known. I think he betrayed this prime minister. I think he's got no future in public life. I've made no contact with him since he left his job and was sacked."
Resignation Speech and Interview Availability
The interview followed Streeting's resignation speech to MPs, in which he warned that the Labour government was losing the fight against "nationalism."
The full interview is available on the Political Thinking podcast on .
