Rachel Reeves tax hike fears surge after No10 statement

Alarm bells were first raised on Sunday when ex-Labour leader Neil Kinnock claimed that Sir Keir Starmer was "willing to explore" a wealth tax.

In a briefing with journalists on Monday, the Prime Minister's spokesman stopped short of categorically ruling out a wealth tax.

The No10 spokesman said: “We have repeatedly said that those with the broadest shoulders carry the greatest burden, and the choices we’ve made reflect that … But as you know, I’m not going to write the next Budget for you right now.”

Despite referring to Reeves's previous comments, the spokesman repeatedly failed to repeat the commitment.

He instead said: “The existing position is what I’ve just said a couple of times, which is that we have repeatedly said, as the Prime Minister has said, that those with the broadest shoulders carry the greatest burden, and the choices we’ve made reflect that.”

The Prime Minister's spokesman added: “The Government is committed to making sure the wealthiest in society pay their fair share of tax.

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"And that’s why the Chancellor announced a series of reforms in the last Budget to help fix the public finances in as fair a way as possible.”

The Chancellor had previously made it clear that she would not increase wealth taxes in her Budget.

“We’re not interested in a wealth tax,” Reeves told The Telegraph earlier this year.

“Our priority is to grow the economy and that’s the way that you make working people better off and secure better public finances.

“But there was lots of speculation ahead of the Spring Statement, including in your paper, about all the taxes I was going to raise. What taxes did I raise in the Spring Statement? None.”

A new wealth tax has also raised fears of a fresh exodus of millionaires and billionaires, leaving the Prime Minister's spokesman to insist that the UK will remain the "best place in the world to invest in".

However, Starmer is facing pressure from five of Britain's biggest trade unions to hike the levy.

The Prime Minister is also searching for a new cash injection to plug the £4.6billion lost following Starmer's benefits bill U-turn.

Speaking to Sky News over the weekend, Lord Kinnock indicated that a wealth tax could fill the void.

He said: "The appearance has been given that they are bogged down by their own imposed limitations.

“There are ways around that, ways out of it, pathways that I think people are willing to explore and actually would commend themselves to the great majority of the general public.

“They include, for instance, asset taxes in a period in which for the last 20-odd years in the United Kingdom, like quite a lot of other Western economies, earned incomes have stagnated in real terms while asset values have zoomed.

"They’ve just gone through the roof and they’ve been barely touched.

“Now, you wouldn’t have to touch assets of under £6million or £7million, so people’s houses would be secure.

"But even by going for an imposition of two per cent on asset values above £10million, say, which is a very big fortune, the Government would be in a position to collect £10billion or £11billion a year.”

A growing number of Labour rebels have also joined calls to push for a wealth tax.