Wes Streeting, former UK health minister and Labour leadership hopeful, called today for capital gains tax rates to be aligned with income tax bands to create a fairer wealth tax system [1, 2, 3, 4]. Streeting said the reform could raise up to £12 billion per year in additional government revenue [1, 2, 3, 4]. Currently, capital gains tax (CGT) rates in the UK range from 18% to 24%, while income tax bands are set at 20%, 40%, and 45% [2, 3, 4].
Under Streeting’s plan, capital gains tax rates would mirror income tax brackets by combining an individual’s income and asset profits to determine the applicable rate [2, 3, 4]. He argued that this would address unfairness in the system, stating, "We need a wealth tax that works. A pound made from simply owning assets should not be taxed less than a pound made from a hard day’s work" [3]. Streeting added, "She slogs her guts out, he puts in far less effort, yet the state rewards him more than her. And we wonder why people are angry" [2].
Currently, capital gains tax applies on asset profits above £3,000 [3, 4]. Streeting recently stepped down from his health minister role to launch his bid to challenge Labour leader Keir Starmer [3, 4].
Treasury minister Lucy Rigby responded to Streeting’s proposal today, saying the government already taxes wealth fairly. "The chancellor introduced a host of measures in her first budget, and then further measures in the last budget as well, that try and make sure that tax is as progressive and fair as possible," Rigby said [1].
Disagreements remain on whether the present UK tax system adequately taxes wealth. While government officials emphasize recent progressive budget measures, Streeting and his supporters argue that capital gains tax rates are currently too low compared to income tax rates, leading to an unfair tax advantage for asset income [1, 2, 3, 4].
Separately, Andy Burnham, another Labour leadership contender, must win the Makerfield parliamentary seat by June 18 to become eligible to launch a formal leadership challenge [4].
