It is the first time a Government minister has explicitly ruled out a wealth tax since plans to cut disability benefits were gutted, leaving Chancellor Rachel Reeves with a battle to balance the books
The Business Secretary has hit out at “daft” demands for a “magic wealth tax” to plug holes in the public finances.
Jonathan Reynolds rubbished speculation that Chancellor Rachel Reeves could balance the books after U-turns on disability benefit cuts and winter fuel with a levy on the wealthiest Brits.
Ms Reeves has refused to rule out a tax on wealth, which has been backed by Labour figures, including former leader Lord Neil Kinnock and Wales’s First Minister Eluned Morgan.
But Mr Reynolds dismissed the idea and told supporters to “be serious”, in comments likely to anger some on the Labour left where support is growing for the move.
It is the first time a Government minister has explicitly ruled out a wealth tax since Keir Starmer was forced to gut his plans to cut disability benefits last month.
READ MORE: Rachel Reeves makes promise on tax rises – as she vows not to repeat last Budget
The Chancellor has been left to make up the shortfall, while battling sluggish growth and higher than expected borrowing.
Experts believe she may be forced to put up taxes in the autumn if she wants to avoid making cuts to public services – triggering calls for a new tax on wealth.
But Mr Reynolds told GB News: “This Labour Government has increased taxes on wealth as opposed to income – the taxes on private jets, private schools, changes through inheritance tax, capital gains tax.
“But the idea there’s a magic wealth tax, some sort of levy… that doesn’t exist anywhere in the world. “Switzerland has a levy but they don’t have capital gains or inheritance tax.
“There’s no kind of magic (tax). We’re not going to do anything daft like that.
“And I say to people: ‘Be serious about this.’ The idea you can just levy everyone… What if your wealth was not in your bank account, (what if it was) in fine wine or art?
“How would we tax that? This is why this doesn’t exist.”
The Chancellor recently told the Mirror that ordinary workers won’t see their VAT, income tax or national insurance contributions rise.
And Ms Reeves signalled a lack of enthusiasm for a dedicated wealth tax, saying she had already asked the wealthiest and businesses to pay more in last year’s Budget, which included a £40billion tax raid to fund cash-strapped public services like hospitals and schools.
READ MORE: Join our Mirror politics WhatsApp group to get the latest updates from Westminster