The Treasury Should Evaluate Wealth Tax to Address Financial Gap, Says Former Labour Official
Anneliese Dodds, who previously served as shadow chancellor under Keir Starmer, has urged the government to engage in an open discussion with the public about difficult choices needed in the upcoming budget to stabilize public finances.
With economists warning of a fiscal shortfall that may surpass £20 billion, Dodds, a senior Labour MP, emphasized that while no single solution exists to cover major expenses like defense, taxation should be reconsidered.
Dodds resigned from her position as international development minister earlier this year over cuts to foreign aid, arguing the decision would harm global security. She warned that with Russia and China expanding their global influence, the UK should not retreat from diplomatic engagement.
In her first interview since leaving office, Dodds told *CuriosityNews*: “We need a long-term strategy, which includes addressing tough fiscal and tax questions. We must be clear about the challenges ahead—we can’t avoid them. With external factors affecting our security, an honest public conversation is necessary, ensuring fairness by requiring those most able to contribute more.”
While not specifying wealth tax details, Dodds recommended the Treasury review proposals by economist Arun Advani, who in 2020 suggested a one-time levy on high-net-worth households as a preferable alternative to taxing workers or consumers.
A growing number of Labour MPs, not just from the party's left, now support additional wealth taxes. However, suggestions such as a 2% annual tax on assets over £10 million have been dismissed by business officials as impractical, with skeptics questioning its feasibility.
Dodds acknowledged potential drawbacks but dismissed fears that such policies would drive individuals to move assets abroad. “There’s no easy fix,” she said. “Claims that a single tax change could instantly generate vast revenues without consequences are unrealistic—there will always be effects.”
She also advised Chancellor Rachel Reeves to reassess fiscal rules to accommodate higher defense spending.
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