Starmer's former shadow chancellor backs wealth tax
Anneliese Dodds urged the Prime Minister and Rachel Reeves, the Chancellor, to look at 'how it would be possible' to impose a levy on the assets of the richest Britons.
She has become the most senior Labour figure to call for a wealth tax, despite Jonathan Reynolds, the Business Secretary, rejecting demands for the 'daft' policy last week.
Ms Dodds, who preceded Ms Reeves as shadow chancellor from April 2020 to May 2021, suggested new taxes on the wealthy could help the Government in the long term.
She told Sky's Electoral Dysfunction podcast: 'What has changed the debate [...] is the work that was undertaken by the Commission on Wealth Tax. They looked at the operation of lots of different wealth taxes.
'They looked at all of that evidence and set out how it would be possible to deliver something like that in a UK context. I would hope that the Treasury is considering that kind of evidence, as well as other changes that have been put forward.
'We've seen the deputy leader of the Labour Party, for example, put forward suggestions. I think it's important for all of those to be considered now.'
In May, The Telegraph revealed that Angela Rayner, the Deputy Prime Minister and deputy Labour leader, had sent a secret memo to Ms Reeves pushing for eight new taxes. These included raids on the million people who pay the additional rate of income tax and a higher level of corporation tax for the banks.
Ms Dodds said ministers faced a world of 'difficult trade-offs' before calling on Sir Keir to make 'some big and significant changes early' to avoid bigger problems in the future.
Downing Street took more than a fortnight to rule out a wealth tax after Lord Kinnock, the former Labour leader, suggested a 2 per cent tax on assets worth more than £10 million.
Last week, Mr Reynolds told backbenchers to 'get serious' about proposals for such a levy, which experts have warned would hurt Britain's middle class. His comments came after 14 Labour MPs signed an early day motion in support of a wealth tax.
The group claimed the move would 'represent a fairer alternative' to Sir Keir's cuts to disability benefits, which have been heavily watered down following a backbench revolt.
Ms Dodds, the MP for Oxford East, served in Sir Keir's Cabinet as the development minister until her resignation in February over his cuts to the overseas aid budget.
She warned on her departure that cutting foreign aid – a decision taken to boost defence spending – would bolster Russia and encourage China to rewrite the global rulebook.
Reflecting on her resignation, Ms Dodds said: 'I obviously was informed about the decision to boost our defence spending in its entirety from the international development budget.
'I had anticipated that we were going to need to be boosting defence and I support that. I think we do need to make sure that we are more secure, and we need to be working very closely with a number of allies to deliver that. So I thought there would be that change.'
Ms Dodds went on to say she had worried that the budget cut would not be a 'sustainable' one, adding: 'I was concerned [about] the immense soft power that we get from developments, and of course, people can mean a lot of different things from that term.
'That was, in some people's minds – certainly not the Prime Minister's, and he never has described it like this – but in some people's minds it was being opposed to hard power, to military power, when I'd seen directly the opposite.'
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