Wealth tax should help pay for coronavirus, says Labour

MP calls for "new settlement" to fix wealth inequality in the UK

A tax on the wealthy should be introduced to help the UK recover from the coronavirus pandemic, Labour MP Annelise Dodds has urged.

The shadow chancellor called on the government to “not increase taxes or cut support for low and middle-income people” during the crisis in a speech to ministers on Friday.

Dodds warned that wealth inequality has increased over the last decade, leaving the richest paying reduced taxes.

She said: “Over the last ten years, the gap in income and wealth has increased, and living standards for low and middle-income people have stagnated – at the same time as taxes for the very best-off have been reduced.”

The MP for Oxford East stressed the need for a “new settlement” which could include a wealth tax on the richest.

She said: “I think the government does need to look at this area, I do not think we are in a fair situation. For the very, very best-off people, quite a bit of their money coming in is derived from wealth, and I do think we need to have that new settlement.”

Chancellor Rishi Sunak is due to set out his latest update on the economy this Wednesday.

How much money could a wealth tax raise?

An estimated £174 billion could be raised each year by implementing a tax on owners of wealth, according to analysis from Professor Richard Murphy as part of the Tax After Coronavirus project.

In a report he writes: “Inequality in the UK could be considerably reduced by taking the taxation of wealth into greater account. Which taxes should be cut for those on lower income levels to help achieve this goal also needs extensive consideration.”