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A dozen Labour MPs have joined a cross-party name for an “extreme wealth” tax in this month’s Budget.
The MPs have written to chancellor Rachel Reeves to demand a brand new 2% tax on belongings price greater than £10m, which they declare might increase £24 billion per yr.
The left wing Labour MPs and two Labour friends have joined forces with MPs suspended by Sir Keir Starmer, together with former shadow chancellor John McDonnell, and former chief Jeremy Corybn, who was elected as an impartial.
The name can be backed by the Greens, Plaid Cymru, the SDLP, Alliance and one Liberal Democrat MP.
The Labour Party has been requested for remark.
The chancellor is finalising particulars of her first Budget, to be introduced on Wednesday 30 October. Government sources have informed the BBC this may embody tax rises and spending cuts to the worth of £40bn.
In their letter to Reeves, the 30 MPs and friends say an excessive wealth tax is required as billionaire wealth has elevated by virtually £150bn in solely two years, between 2020 and 2022, however income from wealth taxes has remained stagnant at round 3.4%.
One of the MPs, Zarah Sultana, who represents Coventry South, flagged Oxfam analysis exhibiting the richest 1% of Britons maintain extra wealth than 70% of the UK inhabitants.
“Austerity is, and always has been, a political choice,” she stated. “It is grossly unfair that children and pensioners are being pushed into poverty while billionaire wealth continues to grow.
“We urgently want wealth taxes to rebalance energy, fund important public providers and construct a society the place the wants of the various take priority over the greed of some.”
Reeves told the party’s autumn conference there would be “no return to austerity” under this government and promised a boost to government investment, designed to kickstart growth.
The MPs are also asking Reeves to equalise capital gains tax (CGT) and income tax rates in her budget.
They say this would “rectify unfairness within the tax system, the place working persons are topic to proportionately increased charges of tax”, and raise £16.7bn per year.
At the election, Labour promised not to increase taxes on “working individuals”, covering VAT (value added tax), income tax or National Insurance (NI), which limits the levers the chancellor can pull to bring cash in.
However, there has been speculation Reeves could increase CGT – charged on profits from the sale of assets like second homes – and also freeze the income tax threshold beyond 2028, potentially dragging more workers into the higher tax bands.
Sir Keir Starmer additionally didn’t rule out a National Insurance improve for employers in a BBC interview final week.
Reeves has already taken one unpopular decision, to remove winter fuel payments from 10m wealthier pensioners, which led to a rebellion by seven Labour MPs.
Sultana is one of five MPs who signed the wealth tax letter and who are currently suspended from the Labour Party for voting against the winter fuel payment cuts.
Some observers also wonder if the rebels, who were suspended for six months in July, may decide to team up with Corbyn’s independent group in January rather than re-join Labour.
The Labour rebels have teamed up with four of the smaller Westminster parties, including Wales’ Plaid Cymru and Northern Ireland’s SDLP and Alliance groups, plus all four Green Party MPs.
Green co-leader Carla Denyer called on Reeves to reconsider Labour’s decision to ditch its £28bn green investment pledge earlier this year, and invest more in public sevices.
“We can’t afford to have one other authorities of spending cuts and financial hardship,” she said.
“Labour’s first Budget should take a resolute step to make sure that these with excessive, unprecedented ranges of wealth assist foot the invoice.”
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