Top Labour MP urges Reeves to consider wealth tax

The Treasury should consider a wealth tax to close the growing gap in the public finances, according to a Labour former shadow chancellor.

- Pippa Crerar

Anneliese Dodds, who held the role under Keir Starmer in opposition, said ministers must have a "full and frank discussion" with the public about the "really big decisions" they had to take at this autumn's budget.

With Rachel Reeves aiming to fill a financial hole that economists say could exceed £20bn, the senior Labour MP said there was "no silver bullet" to funding big-ticket items such as defence, but that the chancellor should consider tax rises.

Dodds quit her post as international development minister in February over a decision to slash the aid budget to pay for increased defence spending - a move she said was a mistake that would have a big impact on global security.

With Russia and China stepping into the gap to boost their own global influence, she said now was not the time for the UK to be "walking back" from using soft power.

In her first interview since standing down, Dodds told the Guardian: "It's important that we have a longer-term approach. That does mean asking and confronting difficult questions around our fiscal position, around taxation. But if we're open and honest about the nature of the challenge that we face, we cannot duck that.

"Now is a time when we're seeing forces outside our country's control impacting on our security. It's important to have an open conversation with the public and say that means we will need to change when it comes to tax. That needs to be done in a way where those with the broadest shoulders take more responsibility."