Labour shadow Chancellor Rachel Reeves drops support for UK wealth tax

The UK’s main opposition party ruled out imposing a wealth tax in an apparent policy shift heading toward the next general election, the Sunday Telegraph reported, citing an interview.

Labour Party shadow Chancellor Rachel Reeves also told the newspaper that she wouldn’t increase the threshold for the top rate of tax, now set at 45 pence. The country’s overall tax burden is high enough, and the party’s spending plans don’t require rais-ing such amounts of revenue, she said.

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“I don’t see the way to prosperity as being through taxation,” Reeves said, adding that she is “very much in favor of wealth creation.” The party doesn’t “have any spending plans that require us to raise £12 billion,” Reeves said.

The commitment marks a shift for Labour, reversing a pledge by leader Keir Starmer from 2020 to hike the top rate of income tax, the Telegraph said. Reeves had previously said that “people who get their income through wealth should have to pay more,” according to the newspaper.

Labor would use a national wealth fund of 8 billion pounds ($10 billion) to invest in cleaner energy industries such a car battery manufacturing and carbon capture as it competes with other countries for investment, Reeves told the Telegraph.

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