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Wes Streeting, the former Health Secretary, has expressed his support for a “wealth tax that works” as part of his campaign to become the next leader of the Labour Party. Central to his proposal is the idea of aligning capital gains tax rates with income tax rates, a move he believes could generate approximately £12 billion annually. Streeting argues this reform would correct the current imbalance, which he views as unfairly penalizing work, while still encouraging genuine entrepreneurial efforts through preferential rates.
During his first detailed broadcast interview since stepping down from his cabinet position last week, Streeting outlined his capital gains tax reform on the BBC’s Political Thinking podcast. He stepped down following pressure from numerous Labour MPs who called on Prime Minister Sir Keir Starmer to resign, sparking widespread speculation that Streeting might soon challenge Starmer for the party leadership. While he did not immediately declare a leadership bid, Streeting has now confirmed his intention to enter any forthcoming contest.
In conversations with Starmer just before resigning, Streeting made it clear that his leadership challenge was imminent. He criticized the current government for lacking clear definition, direction, and vision, stating, “When people don’t know who you are, and what you stand for, they don’t vote for you.” To initiate a leadership contest within the Labour Party, a candidate must secure the backing of 81 MPs. Streeting decided to hold off on launching a challenge initially after discovering that Greater Manchester Mayor Andy Burnham had “found a seat” to contest in an upcoming by-election, thus preparing for a potential leadership run himself.
Streeting’s capital gains tax proposal involves adjusting the capital gains tax bands to match the three income tax bands of 20%, 40%, and 45%, with tax determined by combining an individual’s income and asset profits. He also proposes closing loopholes that allow income to be disguised as capital gains, while offering reduced rates to entrepreneurs who take business risks. This plan contrasts with the Green Party’s wealth tax approach, which advocates for a 1% annual tax on assets over £10 million and 2% on those exceeding £1 billion. Additionally, Streeting expressed his view on Brexit, describing the UK’s departure from the EU as a “catastrophic mistake” and indicating that rejoining the union would require it to be the “settled will of the country.” On the recent appointment of Lord Peter Mandelson as ambassador to the US, Streeting was critical, stating he would not have appointed Mandelson due to past controversies, and criticized him for betraying the prime minister
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