Labour's left-wing battling to introduce £2,500-a-year wealth tax

Six million would face annual bills of £2,500 if Labour’s left-wing wins an internal battle to introduce a wealth tax

  • Shadow Financial Secretary Dan Carden said Labour is considering a wealth tax
  • It would mean six million Britons being forced to pay an average levy of £2,500
  • In an internal battle, the Shadow Chancellor said Labour is calling for growth
  • Anneliese Dodds told the Commons that this is not the same as tax rises 

More than six million Britons could be forced to pay an average annual levy of £2,500 to the Treasury if Labour’s Left wing wins an internal battle to introduce a wealth tax, the Tories claimed last night.

The row was sparked after Sir Keir Starmer’s Shadow Financial Secretary Dan Carden wrote on Twitter: ‘We are following very closely the academic research… on how a UK wealth tax would work.’

He added that the party thought the cost of the Covid-19 crisis ‘should be borne by those with the broadest shoulders’ – and dismissed as ‘false’ reports that Labour was moving away from the idea.

Labour Shadow Financial Secretary Dan Carden (pictured right) revealed that Labour’s Left wing are planing an internal fight to introduce a wealth tax in Britain 

Mr Carden, a protégé of Len McCluskey, leader of the Unite trade union, is one of the last remaining close allies of Jeremy Corbyn on the party’s front bench.

It reflects a widening split in Labour over the issue, coming after Shadow Chancellor Anneliese Dodds told the Commons on Wednesday that ‘Labour is not calling for tax rises. We are calling for growth’.

Mr Carden’s remarks have been seized on by the Conservative Party, which claims that Labour is eyeing the system in operation in Norway – where everyone with savings and property worth more than £126,000 is hit with an annual charge of 0.85 per cent above that amount. 

Under the scheme, even the value of assets such as cars and furniture are taken into account when calculating the levy.

More than half a million Norwegians currently pay the tax, according to the latest official data. If the same type of system were applied in the UK, at least six million workers could be eligible.

On average, Norwegians face a bill of about £2,500 – on top of other taxes such as income tax and VAT. British workers would probably see similar bills under Labour.

A YouGov survey in May suggested that 61 per cent of the British public would support a wealth tax for those with assets of more than £750,000.

Last night, a Labour Party spokesman added to the confusion by saying that Mr Carden’s view was not that of the party, and pointed back to Ms Dodds’s assertion in the Commons that new taxes would ‘damage demand and inhibit our recovery’.

Shadow Chancellor Anneliese Dodds (pictured) told the House of Commons on Wednesday that Labour is calling for growth, not tax rises

It is a further flip-flop from earlier this month, when Ms Dodds said that the wealth tax was something the Government ‘does need to look at’ because ‘for the very, very best-off people quite a bit of their money coming in is derived from wealth’.

Sir Keir himself said on July 6 that ‘we certainly support the principle that those with the broadest shoulders should bear the greatest burden’.

Amanda Milling MP, co-chairman of the Conservative Party, said: ‘Sir Keir Starmer has admitted a tax raid on homes and savings has got to be something we look at.

‘This new analysis reveals just how much hard-working people could be hit by Labour’s plans. Labour need to be honest about what they’re calling for, rather than just saying what they think people want to hear without giving any details.’

A Labour source said that despite Mr Carden’s words, ‘Labour has not proposed this or anything like it and has no plans to’.

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