Treasury minister defends tax record as Labour MP pushes capital gains alignment
Chancellor Rachel Reeves’ budget measures face internal scrutiny as Wes Streeting proposes aligning capital gains and income tax rates to raise £12bn annually
Treasury Minister Lucy Rigby has firmly rejected calls to overhaul the UK’s taxation framework, asserting that wealthy individuals are already subject to adequate fiscal levies. Her comments came in direct response to Labour MP Wes Streeting, who advocated for a “wealth tax that works” during an interview with the BBC’s Political Thinking podcast.
Streeting, who resigned from the Commons earlier in the day, proposed aligning capital gains tax rates with income tax rates. He argued that this structural adjustment could generate up to £12bn in annual revenue. The proposal aligns with one of the primary recommendations contained in the Labour Growth Group’s report published last week.
Rigby, the new chief secretary to the Treasury, addressed the sentiment during interviews on the Today programme. Although she stated she had not listened to Streeting’s specific interview, she defended the current fiscal strategy, noting that Chancellor Rachel Reeves had introduced a series of measures in her first and subsequent budgets designed to ensure the tax system remains progressive and fair.
Streeting clarified that his proposal differs significantly from the Green Party’s version of a wealth tax, which typically involves a levy on assets exceeding a certain threshold. Instead, his focus remains on rate alignment, aiming to close perceived disparities between how investment income and earned income are taxed.
The political exchange occurred on a day dominated by Chancellor Rachel Reeves’ Commons statement regarding cost-of-living measures. Among the announcements was the introduction of free bus travel for children, part of the government’s broader strategy to support households during the summer period.
Meanwhile, other government activities included the publication of long-term migration figures by the Office for National Statistics and quarterly asylum data from the Home Office. Communities Secretary Steve Reed also delivered a speech on neighbourhood standards, where he is expected to propose capping profits for private social care providers.