PM warned 'anti-aspiration' policies have 'crossed a line'

Cabinet colleagues have told Starmer that ending non-dom status and VAT on private school fees are driving wealth away

- By DAVID MADDOX, POLITICAL EDITOR

Sir Keir Starmer's cabinet is deeply divided over economic policy, with senior ministers fearful further measures to target the rich in next month's Budget could accelerate the wealth exodus from Britain.

Cabinet ministers have told The Independent they believe Rachel Reeves has already gone too far with measures targeting the businesses and the wealthy, and have urged the chancellor to change course if she is to have any hope of achieving growth.

They cited “anti-aspiration” measures such as the abolition of non-dom status and VAT on private school fees as key drivers of wealth away from the UK, saying they are “harming this country”. Further measures reportedly being considered include a property tax on high-value homes and a new bank profits tax.

Ministers have instead urged the prime minister and Ms Reeves to consider “efficiency savings” and cuts to fill a Budget black hole estimated to be between £30bn and £40bn.

Those on the left in Labour have noted that the recent reshuffle has “handed more power to the right of the party” while left-wingers who support wealth taxes have been demoted or pushed out.