Wes Streeting pledges wealth tax as he prepares for Labour leadership bid

Former British health secretary Wes Streeting has set out plans for a wealth tax that would see capital gains tax equalised with income tax.

Streeting, who had made clear he intends to stand in any leadership contest to replace Keir Starmer, said the current system is not fair and penalises work.

The MP’s intervention comes a day after he warned in his resignation speech that Labour must change course or risk handing Reform UK power, and after he quit the Cabinet last week calling on the British Prime Minister to go.

Streeting said: “A member of my family is a cleaner in Lancashire. She pays a higher tax rate on her salary than her landlord pays for the growing value of the home she lives in.

“She slogs her guts out, he puts in far less effort, yet the state rewards him more than her.

“And we wonder why people are angry.

“The system is penalising work. It’s not fair and it’s bad for our economy. We need a wealth tax that works.

“A pound made from simply owning assets should not be taxed less than a pound made from a hard day’s work.”

Higher or additional rate taxpayers pay 24 per cent on gains they make in the current financial year.

Under Streeting’s proposal that would be equalised with the income tax rate of 40 per cent for higher rate taxpayers and 45 per cent for additional rate taxpayers.

He vowed to do it alongside measures to protect real entrepreneurs – with lower capital gains tax rates for those taking risks building companies – and long-term investment to boost economic growth.

The package would also close the loopholes he said people use to disguise income from work as capital gains, such as establishing personal service companies or taking pay in shares.

The plan could raise up to £12 billion a year, he said, pointing to calculations by the Centre for the Analysis of Taxation.