As the UK grapples with significant financial gaps in its budget, conversations around how best to raise revenue are heating up—and not quietly.
One of the most pressing questions now is whether it’s time to introduce a wealth tax, especially as the Labour government looks for ways to keep promises while plugging multi-billion-pound shortfalls.
Anneliese Dodds Pushes for a Wealth Tax
Former Labour minister Anneliese Dodds has become the latest prominent voice urging Chancellor Rachel Reeves to consider taxing the country’s wealthiest.
Dodds, who previously served as the shadow chancellor and international development minister, believes it’s only fair for those with the “broadest shoulders” to carry a bigger share of the financial burden.
She argues that merely slashing spending isn’t going to be enough to solve the fiscal problems ahead and says it’s time to look at more sustainable, long-term solutions.
Labour Figures Rally Behind the Idea
Dodds isn’t alone in this call.
Other big names in the Labour Party—including Lord Neil Kinnock and Baroness Eluned Morgan, the First Minister of Wales—have also voiced support for a tax targeting the ultra-wealthy.
Trade union leaders, like Sharon Graham of Unite, have echoed similar sentiments, putting additional pressure on Reeves to act.
Rachel Reeves Stays Cautious but Open
When asked about the idea, Rachel Reeves gave a carefully worded response.
She didn’t shut it down completely but reminded the public that any tax decisions will be made during official Budget discussions.
For now, her focus remains on stimulating economic growth—bringing in new investments, boosting job creation, and reforming systems like planning and pensions to unlock funds for British businesses.
Still, she emphasized the need for balance, saying the government wants to attract investment, not scare it away with aggressive taxation.
The Wealth Tax Commission’s Research Adds Fuel
Dodds pointed to findings from the Wealth Tax Commission, which released a report in 2020 showing that a one-time tax on millionaire households could raise a staggering £260 billion over five years.
According to Dodds, the Commission’s detailed examination of global wealth taxes helped shift the narrative in the UK and made it clear that such a policy could be implemented realistically.
She hopes the Treasury is seriously reviewing that evidence, along with other proposals like those brought forward by Deputy Prime Minister Angela Rayner.
Angela Rayner’s Leaked Memo Suggests Higher Taxes
Earlier this year, a leaked memo from Angela Rayner to Rachel Reeves stirred headlines when it proposed several tax increases.
Among the ideas: bringing back the pensions lifetime allowance and raising corporation tax for banks.
Dodds believes it’s crucial to consider these suggestions too, as part of a comprehensive look at the country’s options.
Criticism of Short-Term Cuts and Quick Fixes
Dodds also expressed concern about the government’s reliance on cuts to welfare and other services.
She believes this approach might offer temporary relief but fails to provide the kind of lasting stability that the UK’s finances need.
In her view, tactical decisions might look good in the short run, but the country desperately needs a strategic, long-term plan.
Some Ministers Push Back on the Wealth Tax
Not everyone in government is sold on the idea of taxing wealth more directly.
Business Secretary Jonathan Reynolds, for example, dismissed the notion earlier this year, calling it “daft.”
He argued that while Labour has already increased some wealth-related taxes—such as on private jets, elite schools, and inheritance—the concept of a simple, sweeping wealth tax isn’t practical.
He raised concerns about how such a tax would even be enforced: “What if someone’s wealth is tied up in fine wine or artwork? How do you tax that?”
Is a Wealth Tax Coming?
Although there’s growing support within the Labour Party, the government hasn’t formally committed to a wealth tax just yet.
Rachel Reeves appears to be walking a tightrope—trying to keep Britain attractive to investors while facing increasing internal pressure to make the rich pay more.
The big question now is whether this will all come to a head in Reeves’ autumn Budget, where further tax changes are widely expected.
With a widening hole in public finances and strong voices on both sides of the debate, all eyes will be on the Chancellor’s next move.