Former Health Secretary Wes Streeting has put forward a proposal for a "wealth tax that works" and reforms to capital gains tax (CGT) as part of his bid for the Labour leadership. Streeting stated that his proposed wealth tax reform could generate an estimated £12 billion annually. He articulated this policy during an in-depth broadcast interview on the BBC's Political Thinking podcast, marking his first public statement on policy following his resignation from the cabinet last week.
Streeting suggested that his proposed changes would address what he described as an unfair system that currently "penalises work." Concurrently, he aims to encourage investment by offering reduced CGT rates to "genuine" entrepreneurs. This initiative comes after Streeting resigned from his position as health secretary amid speculation about a potential leadership challenge against Prime Minister Sir Keir Starmer. Streeting has indicated his intention to participate in any future Labour leadership contest.
According to Streeting, he informed Prime Minister Starmer directly of his intention to challenge for the leadership during a meeting at Downing Street the day before his resignation. "As I said to the prime minister in my letter and privately, this is a government that lacks definition and also direction and vision," Streeting told the BBC. He added, "When people don't know who you are, and what you stand for, they don't vote for you."
To initiate a leadership contest, Streeting would require the support of 81 Labour MPs, as per the party's rules. He revealed that he had considered not resigning a few days prior, particularly after learning that Greater Manchester Mayor Andy Burnham, a potential rival for the leadership, had "found a seat." The departure of Josh Simons as the MP for Makerfield was announced, creating an opportunity for Burnham to potentially stand as Labour's candidate in an upcoming by-election.
Streeting commented on the timing of potential leadership challenges, stating, "It was clear that if we'd been plunged straight into a leadership contest by me or for that matter anyone else, I think it would have been seen as a deliberate attempt to get ahead of Andy Burnham's potential return." In the interim, Streeting has been outlining his policy platform for his leadership campaign.
His primary policy proposal involves reforms to capital gains tax, which is levied on profits from the sale of assets such as property. A report from the Centre for the Analysis of Taxation in 2024 estimated that reforming CGT could yield £14 billion. The current system includes an annual tax-free allowance of £3,000, with gains above this threshold taxed at rates dependent on an individual's income band.
For higher and additional rate taxpayers, the current CGT rate stands at 24% for gains made in the current financial year. Streeting is advocating for CGT rates to be aligned with the three income tax bands: 20%, 40%, and 45%. Under his proposal, an individual's CGT band would be determined by combining their income with profits from asset sales. Furthermore, Streeting plans to close loopholes that permit individuals to classify income derived from work as capital gains.
Additionally, Streeting's plan includes offering lower CGT rates to entrepreneurs who take risks in building companies. This policy differs from the wealth tax proposed by the Green Party of England and Wales, which suggested an annual tax of 1% on assets exceeding £10 million and 2% on assets above £1 billion.
During the BBC interview, Streeting also addressed his stance on Brexit. He reiterated his view, previously expressed in a speech, that leaving the European Union after the 2016 referendum was a "catastrophic mistake" and that the UK should "one day" rejoin the bloc. However, Streeting clarified to the BBC that rejoining would necessitate "the settled will of the country."
Streeting was also questioned about the appointment of Lord Peter Mandelson as the UK's ambassador to the US. Lord Mandelson had been dismissed the previous year following revelations concerning his relationship with the late sex offender Jeffrey Epstein. "I wouldn't have appointed Mandelson based on what was known," Streeting stated. "I think he betrayed this prime minister. I think he's got no future in public life. I've made no contact with him since he left his job and was sacked."
The interview followed Streeting's warning, delivered in his resignation speech to MPs, that the Labour government was losing the battle against "nationalism."
