Chancellor Rachel Reeves is facing renewed calls to introduce a wealth tax, with economists, climate campaigners and high-net-worth individuals urging her to impose a tax on the UK’s wealthiest citizens to help fund essential public services and accelerate the transition to net zero. .
In an open letter to the Chancellor, eminent economist Thomas Piketty (pictured) Gabriel Zucman has joined 29 organisations, including Greenpeace, Oxfam and Unite, in supporting the proposal, which they claim could raise more than £100bn.
The signatories claim that a wealth tax would ensure that “the wealthiest individuals in our society contribute their fair share during the government’s promised decade of national renewal.” The proposed tax targets assets rather than income, and has gained momentum as the Chancellor prepares for a major £40bn fiscal tightening, largely through tax rises, in her budget next week.
Greenpeace’s previous proposal for a temporary 2.5 per cent wealth tax on estates over £10m would affect fewer than 75,000 people, with estimates suggesting it could raise at least £130bn over five years. years. Economists agree that a one-time wealth tax may be more effective than a recurring annual tax, because it would reduce the chances of avoiding taxes by moving or disposing of assets.
The letter confirms that significant funds are available to meet pressing social and environmental needs in the UK. The report notes that the combined wealth of the UK’s 250 richest households is £748 billion, and highlights that the carbon footprint of the richest 0.1 per cent is around 12 times that of the average UK citizen.
Greenpeace’s Georgia Whittaker has criticized recent government decisions to restrict winter fuel allowances, arguing that taxing the rich should be less controversial than cutting support for vulnerable pensioners: “How can the government think that taxing the vast wealth that… Owned by the richest people in our society is more important Would it be more controversial than cutting winter fuel payments for poorer pensioners?
Despite these calls, the Chancellor previously indicated that she does not plan to impose a wealth tax. Next week’s budget is expected to include tax rises in areas such as capital gains, inheritance and employer national insurance, along with a potential shift in fiscal rules to allow increased government borrowing to fund public investment.