Chancellor Rachel Reeves is facing renewed calls to introduce a wealth tax, with economists, climate campaigners and wealthy individuals urging her to introduce a tax on Britain’s richest citizens to help fund vital public services and accelerate the transition to net zero. .
In an open letter to the Chancellor, notable economists Thomas Piketty said (photo) and Gabriel Zucman joined 29 organisations, including Greenpeace, Oxfam and Unite the Union, in backing the proposal, which they say could raise more than £100 billion.
The signatories argue 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 levy targets assets rather than income and has gained momentum as the chancellor prepares a substantial £40 billion budget tightening next week, largely through tax rises.
Greenpeace’s previous proposal of a temporary wealth tax of 2.5 per cent on assets over £10m would affect fewer than 75,000 people, with estimates suggesting this could raise at least £130bn over five years. Economists agree that a one-off wealth tax could be more effective than a recurring annual levy because it would reduce the opportunities for tax avoidance through asset transfers or disposals.
The letter emphasizes that substantial funding is available to meet Britain’s pressing social and environmental needs. It notes that the combined wealth of Britain’s 250 richest households is £748 billion, and highlights that the carbon footprint of the richest 0.1 percent is around twelve times that of the average British citizen.
Greenpeace’s Georgia Whitaker criticized recent government decisions to cap winter fuel surcharges, arguing that taxing the richest should be less controversial than cutting support for vulnerable pensioners: “How can the government think that taxing the enormous wealth of the very richest in our society more controversial than cutting winter fuel payments to poor pensioners?
Despite these calls, the Chancellor has previously indicated that he has no intention of introducing a wealth tax. Next week’s budget is expected to include tax increases in areas such as capital gains, inheritance and national employer insurance, in addition to a possible shift in budget rules to allow more government borrowing to finance public investments.