Whisper it, but Reeves has already vetoed a wealth tax

Normally, when politicians decline to rule something out, a sceptical media and public believe they are about to do it. But there should be one exception to this rule.

- ANDREW GRICE

Keir Starmer, Rachel Reeves and other ministers are refusing to rule out introducing a wealth tax in this autumn’s Budget, when the chancellor is likely to raise taxes by at least £20bn to stick within her fiscal rules.

I’m told Starmer and Reeves will not bring in a new wealth tax, such as the 2 per cent levy on assets of more than £10m advocated by a growing number of Labour MPs and Neil Kinnock, the party’s former leader, to raise £10bn.

A wealth tax is an easy slogan and fits on to a banner. It would do nicely for the Starmer allies hoping to nudge him in a more progressive direction as he seeks a long overdue “story” for his government. But Reeves and Starmer are not convinced. The chancellor thinks wealth taxes don’t work. Twelve developed nations had them in 1990s but only three remain; only one, in Switzerland, brings in lots of money.

Reeves burnt her own fingers by targeting non-doms - a process begun by Jeremy Hunt, the outgoing Tory chancellor. I’m told Reeves privately dismissed fears the rich would respond by leaving the UK, saying: “They always say that, but it never happens.”

It is happening, and she is now considering changing her plan to make worldwide assets, including those in foreign trusts, liable to inheritance tax. One government insider told me: “People can choose where to pay their taxes. It’s very easy to move countries and they are doing it.”