Chancellor Rachel Reeves is facing renewed calls to implement a wealth tax, with economists, climate advocates, and high-net-worth individuals urging her to introduce a tax on the UK’s richest citizens to help fund essential public services and accelerate the transition to net zero.
In an open letter to the chancellor, notable economists Thomas Piketty (pictured) and Gabriel Zucman joined 29 organisations, including Greenpeace, Oxfam, and Unite the Union, in backing the proposal, which they claim 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 traction as the chancellor prepares a substantial fiscal tightening of £40 billion, largely through tax rises, in her budget next week.
Greenpeace’s previous proposal of a temporary 2.5 per cent wealth tax on holdings over £10 million would affect fewer than 75,000 people, with estimates suggesting it could raise at least £130 billion over five years. Economists agree that a one-off wealth tax might be more effective than a recurring annual levy, as it would reduce opportunities for tax avoidance via asset relocation or disposal.
The letter stresses that substantial funds are available to address the UK’s pressing social and environmental needs. It notes that the combined wealth of the UK’s richest 250 households stands at £748 billion, and highlights that the carbon footprint of the wealthiest 0.1 per cent is approximately 12 times that of the average UK citizen.
Georgia Whitaker of Greenpeace criticised recent government decisions to restrict winter fuel allowances, arguing that taxing the wealthiest should be less controversial than cutting support for vulnerable pensioners: “How can the government think that taxing the vast wealth of the very richest in our society is more controversial than cutting winter fuel payments to poor pensioners?”
Despite these calls, the chancellor has previously indicated that she does not plan to introduce a wealth tax. Next week’s budget is expected to include tax increases in areas such as capital gains, inheritance, and employer National Insurance, alongside a potential shift in fiscal rules to allow for increased government borrowing to fund public investment.
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Economists and Activists Call on Rachel Reeves to Introduce Wealth Tax in Inaugural Budget