Wes Streeting backs £12bn wealth tax as Labour leadership battle looms

Wes Streeting has backed plans for a £12 billion-a-year wealth tax as speculation intensifies over a future Labour leadership contest.

The former health secretary is understood to be pitching what allies describe as a “wealth tax that works”, centred on equalising capital gains tax rates with income tax to overhaul a system he believes “penalises work”.

Under the proposal, investors and asset holders would face higher capital gains tax, while tax incentives would remain available for what Mr Streeting described as “genuine entrepreneurs” and business creators.

The move is likely to reignite fierce debate within Labour over taxation, wealth creation and how to fund public services amid mounting pressure on the public finances.

Although Mr Streeting has not formally launched a leadership challenge against Keir Starmer, he has previously indicated he would stand in any future contest for the party leadership.

Streeting said: “It was clear that if we’d been plunged straight into a leadership contest by me or for that matter anyone else, I think it would have been seen as a deliberate attempt to get ahead of Andy Burnham’s potential return.”

The intervention comes as manoeuvring inside Labour intensifies following growing unrest among MPs over the party’s direction and economic strategy.

Meanwhile, Andy Burnham is edging closer to a potential return to Westminster after an opportunity emerged in the traditionally safe Labour seat of Makerfield.

The vacancy arose after Josh Simons announced he would stand down, potentially opening the door for Mr Burnham to re-enter Parliament and position himself for a future leadership bid.

A successful return to the Commons would remove one of the biggest obstacles facing the Greater Manchester mayor, who has long been viewed as a possible contender for the Labour leadership.

The prospect of multiple senior Labour figures positioning themselves for a post-Starmer era is likely to deepen speculation about the party’s long-term direction, particularly over tax, public spending and economic growth.

Mr Streeting’s proposed reforms are expected to divide opinion sharply, with supporters arguing they would create a fairer tax system while critics warn higher capital gains taxes could deter investment and drive wealth overseas.