Cabinet minister refuses to rule out wealth taxes in budget
Heidi Alexander, the transport secretary, said proposals such as those advocated by Lord Kinnock, the former Labour leader, were not discussed 'directly' at a cabinet awayday on Friday.
Unions, some MPs and Kinnock are among those who have pushed for Reeves to levy taxes on 'unearned income', such as money from savings, investments or property.
• How could a UK wealth tax work? The impact examined
Alexander refused to rule out the prospect, when pressed on Sunday. Asked if the idea of a wealth tax was discussed by cabinet ministers during an awayday at Chequers, Sir Keir Starmer's country retreat, she told Sky News: 'Not directly.'
She sought to play down the prospect of future tax rises hitting the vast majority of workers. Alexander said: 'We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.'
Asked again if this meant there will be tax rises in the budget, Alexander replied: 'The chancellor will set her budget. I'm not going to sit in a TV studio today and speculate on what the contents of that budget might be. When it comes to taxation, fairness is going to be our guiding principle.'
Economists say that Reeves will be forced to raise taxes again, to fill a black hole to meet her fiscal rules.
High borrowing costs and extra spending pledges — including the winter fuel U-turn estimated to cost about £1.25 billion and retreating on welfare reforms with a price tag of roughly £5 billion — have eaten into the £9.9 billion headroom Reeves left herself in the last autumn budget, and her spring statement.
The Conservatives said it was inevitable that workers and businesses would face more tax rises under Labour.
• The Sunday Times View: A wealth tax looks seductive to Labour but must be resisted
Chris Philp, the shadow home secretary, said after Alexander's remarks: 'That sounds to me like a barely disguised reference to tax rises coming in the autumn.'
Philp said tax rises were now being discussed owing to the economy shrinking in consecutive months and rising unemployment since Labour came to office.
He said that the government had 'completely failed' to reform welfare. Philp added: 'They can't get anything past their own back benches. The consequence of all of that is going to be tax rises for people who are working hard and on businesses. It's nothing to do with fairness, it's a symptom of Labour failure.'
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