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The UK is at a crossroads.
Public services are crumbling, inequality has reached Victorian levels, and decades of tax privilege have hollowed out both our economy and our social fabric.
Into this landscape comes a striking intervention: a group of world-renowned economists — including Thomas Piketty, Jayati Ghosh, and Ha-Joon Chang — have called on the Labour government to introduce a modest wealth tax on the super-rich.
It could raise up to £22 billion a year and touch only 0.04 per cent of the population.
It is, by any standard, a measured, technocratic, and proportionate proposal.
Labour leader Keir Starmer and Chancellor Rachel Reeves are already looking for ways to avoid it.
This is not a case of missed timing or political uncertainty.
This is deliberate.
Faced with a moral and economic crisis, Labour is choosing not to act — choosing, in effect, to protect extreme concentrations of wealth rather than challenge them.
It is, as former trader and inequality campaigner Gary Stevenson has long warned, a strategy that will only entrench Britain’s decline.
The experts are clear — so why is Labour silent?
The letter to The Guardian, coordinated by Tax Justice UK, couldn’t have been clearer.
Wealth inequality has spiralled out of control in Britain, and a modest levy on fortunes over £10 million could be both a fiscal and social game-changer.
Economists from across the globe urged the government to begin laying the groundwork for a new wealth tax in the autumn budget — not just for the revenue, but to position the UK as a global leader in tax fairness.
But Rachel Reeves seems poised to reject the idea.
Despite having had one full budget already under her belt — last autumn’s 2024 budget — where she avoided structural tax reform, all signs suggest she will stick to the same cautious path.
Cabinet colleague Jonathan Reynolds went further, calling a wealth tax ‘daft’ and unworkable.”
This is political theatre masking a deeper truth: Labour is running scared.
Even when presented with expert backing, popular support, and a fiscal imperative, its leadership seems more concerned with not upsetting the super-rich than in addressing a broken system.
What Wren-Lewis gets right
In his latest Mainly Macro column, economist Simon Wren-Lewis outlines three options facing Reeves in her second Budget this autumn:
-
Tinker around the edges by raising select taxes on small, targeted groups.
-
Break Labour’s tax pledge by raising income tax, VAT, or National Insurance.
-
Embark on a structural reform of the tax system — modernising it, fixing its distortions, and raising revenue in a fairer way.
Wren-Lewis — like Martin Sandbu and the IFS — argues that option 3 is long overdue.
Britain’s tax system is not just outdated; it is actively regressive.
Council tax is still based on 1991 property valuations, punishing low-value homes more than mansions.
National Insurance, meanwhile, functions as a shadow income tax that exempts the wealthy, pensioners, and landlords.
Two people with the same income — one a salaried worker, the other a landlord — can face radically different tax burdens.
Fixing these distortions would do far more than a stealth tax tweak here or a “windfall” levy there.
It would rebuild trust in the system and make taxation something people can once again see as fair.
But that would mean political risk.
That would mean taking on wealthy asset holders, older voters, and — perhaps most terrifying to Labour strategists — the right-wing press.
Gary Stevenson: ‘They’re too scared to fix it’
Gary Stevenson, the former Citibank trader turned inequality campaigner, has spent years warning that wealth inequality isn’t just a social problem — it’s an economic time bomb.
When too much money pools at the top, spending dries up, demand collapses, and the economy stalls.
Public services become impossible to fund without borrowing, and politicians are forced into austerity cycles.
In other words, exactly what Britain is living through today.
Stevenson has long argued for radical, redistributive action. And he has repeatedly highlighted the cowardice of political leaders, including Labour, in refusing to confront the ultra-rich.
Their inaction, he says, is a feature — not a bug — of the system.
Now that some of the world’s most respected economists are echoing his calls for a wealth tax, the question must be asked: Why is Labour still ignoring the evidence?
The political cowardice at the heart of Labour’s tax strategy
Starmer and Reeves aren’t being passive — they’re making a calculated choice to avoid political risk.
Pensioners vote in large numbers and disproportionately consume the right-wing media.
Southern homeowners hold outsized political weight in marginal seats.
Wealthy donors, though more quietly, still influence the tone of policymaking.
So instead of reform, Labour offers rhetoric about ‘stability’ and ‘growth’ — all while promising not to raise income tax, VAT, or National Insurance.
That leaves precious little room for serious revenue generation.
The result is likely to echo Reeves’s 2024 budget: a smattering of technical tax tweaks dressed up as fiscal responsibility.
In reality, it’s austerity by stealth.
It’s the politics of fear — and it’s leaving the door wide open for critics on the left and right to expose Labour’s weakness.
The public is ready. Labour isn’t.
Polling has consistently shown broad support for taxing extreme wealth.
The public understands, intuitively, that nurses and teachers shouldn’t be paying higher marginal tax rates than hedge fund managers or inherited wealth dynasties.
And the economic case is now beyond dispute: fairer taxation would reduce inequality, fund essential services, and stimulate real growth.
But Labour continues to operate under the assumption that these issues are too dangerous to touch.
That’s not even caution — it’s abdication.
By refusing even to consult on a wealth tax, Labour sends a clear message: the richest 0.04 per cent have nothing to fear.
The rest of us will pay more for less – again.
History will judge
Labour has a choice.
It can lead a serious conversation about fairness and rebuild Britain’s tax system for the 21st century.
Or it can duck, delay, and deflect — and watch as inequality deepens, services erode, and trust collapses.
When future historians ask why nothing changed even after the experts pointed the way, the answer may be painfully simple: Labour deliberately missed the moment.
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Deliberately missing the moment: Labour’s cowardice on wealth, tax and fairness
Share this post:
The UK is at a crossroads.
Public services are crumbling, inequality has reached Victorian levels, and decades of tax privilege have hollowed out both our economy and our social fabric.
Into this landscape comes a striking intervention: a group of world-renowned economists — including Thomas Piketty, Jayati Ghosh, and Ha-Joon Chang — have called on the Labour government to introduce a modest wealth tax on the super-rich.
It could raise up to £22 billion a year and touch only 0.04 per cent of the population.
It is, by any standard, a measured, technocratic, and proportionate proposal.
Labour leader Keir Starmer and Chancellor Rachel Reeves are already looking for ways to avoid it.
This is not a case of missed timing or political uncertainty.
This is deliberate.
Faced with a moral and economic crisis, Labour is choosing not to act — choosing, in effect, to protect extreme concentrations of wealth rather than challenge them.
It is, as former trader and inequality campaigner Gary Stevenson has long warned, a strategy that will only entrench Britain’s decline.
The experts are clear — so why is Labour silent?
The letter to The Guardian, coordinated by Tax Justice UK, couldn’t have been clearer.
Wealth inequality has spiralled out of control in Britain, and a modest levy on fortunes over £10 million could be both a fiscal and social game-changer.
Economists from across the globe urged the government to begin laying the groundwork for a new wealth tax in the autumn budget — not just for the revenue, but to position the UK as a global leader in tax fairness.
But Rachel Reeves seems poised to reject the idea.
Despite having had one full budget already under her belt — last autumn’s 2024 budget — where she avoided structural tax reform, all signs suggest she will stick to the same cautious path.
Cabinet colleague Jonathan Reynolds went further, calling a wealth tax ‘daft’ and unworkable.”
This is political theatre masking a deeper truth: Labour is running scared.
Even when presented with expert backing, popular support, and a fiscal imperative, its leadership seems more concerned with not upsetting the super-rich than in addressing a broken system.
What Wren-Lewis gets right
In his latest Mainly Macro column, economist Simon Wren-Lewis outlines three options facing Reeves in her second Budget this autumn:
Tinker around the edges by raising select taxes on small, targeted groups.
Break Labour’s tax pledge by raising income tax, VAT, or National Insurance.
Embark on a structural reform of the tax system — modernising it, fixing its distortions, and raising revenue in a fairer way.
Wren-Lewis — like Martin Sandbu and the IFS — argues that option 3 is long overdue.
Britain’s tax system is not just outdated; it is actively regressive.
Council tax is still based on 1991 property valuations, punishing low-value homes more than mansions.
National Insurance, meanwhile, functions as a shadow income tax that exempts the wealthy, pensioners, and landlords.
Two people with the same income — one a salaried worker, the other a landlord — can face radically different tax burdens.
Fixing these distortions would do far more than a stealth tax tweak here or a “windfall” levy there.
It would rebuild trust in the system and make taxation something people can once again see as fair.
But that would mean political risk.
That would mean taking on wealthy asset holders, older voters, and — perhaps most terrifying to Labour strategists — the right-wing press.
Gary Stevenson: ‘They’re too scared to fix it’
Gary Stevenson, the former Citibank trader turned inequality campaigner, has spent years warning that wealth inequality isn’t just a social problem — it’s an economic time bomb.
When too much money pools at the top, spending dries up, demand collapses, and the economy stalls.
Public services become impossible to fund without borrowing, and politicians are forced into austerity cycles.
In other words, exactly what Britain is living through today.
Stevenson has long argued for radical, redistributive action. And he has repeatedly highlighted the cowardice of political leaders, including Labour, in refusing to confront the ultra-rich.
Their inaction, he says, is a feature — not a bug — of the system.
Now that some of the world’s most respected economists are echoing his calls for a wealth tax, the question must be asked: Why is Labour still ignoring the evidence?
The political cowardice at the heart of Labour’s tax strategy
Starmer and Reeves aren’t being passive — they’re making a calculated choice to avoid political risk.
Pensioners vote in large numbers and disproportionately consume the right-wing media.
Southern homeowners hold outsized political weight in marginal seats.
Wealthy donors, though more quietly, still influence the tone of policymaking.
So instead of reform, Labour offers rhetoric about ‘stability’ and ‘growth’ — all while promising not to raise income tax, VAT, or National Insurance.
That leaves precious little room for serious revenue generation.
The result is likely to echo Reeves’s 2024 budget: a smattering of technical tax tweaks dressed up as fiscal responsibility.
In reality, it’s austerity by stealth.
It’s the politics of fear — and it’s leaving the door wide open for critics on the left and right to expose Labour’s weakness.
The public is ready. Labour isn’t.
Polling has consistently shown broad support for taxing extreme wealth.
The public understands, intuitively, that nurses and teachers shouldn’t be paying higher marginal tax rates than hedge fund managers or inherited wealth dynasties.
And the economic case is now beyond dispute: fairer taxation would reduce inequality, fund essential services, and stimulate real growth.
But Labour continues to operate under the assumption that these issues are too dangerous to touch.
That’s not even caution — it’s abdication.
By refusing even to consult on a wealth tax, Labour sends a clear message: the richest 0.04 per cent have nothing to fear.
The rest of us will pay more for less – again.
History will judge
Labour has a choice.
It can lead a serious conversation about fairness and rebuild Britain’s tax system for the 21st century.
Or it can duck, delay, and deflect — and watch as inequality deepens, services erode, and trust collapses.
When future historians ask why nothing changed even after the experts pointed the way, the answer may be painfully simple: Labour deliberately missed the moment.
Share this post:
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