Race for Labour deputy reignites wealth tax debate
Labour’s Islington South and Finsbury MP Emily Thornberry has thrown her hat in the ring for Labour deputy leader and proposed a new wealth tax as part of her campaign, prompting Chancellor Rachel Reeves to strike down calls by ruling out its introduction.
Thornberry, the former shadow foreign secretary under Jeremy Corbyn’s leadership who now chairs the Foreign Affairs Committee, criticised the Labour government for failing to “listen” to voters.
She said in a post on X she was running to become deputy leader, following education secretary Bridget Phillipson and the backbencher Bell Ribeiro-Addy in joining the contest.
Lucy Powell, who was removed as leader of the House of Commons in a weekend Cabinet reshuffle, has also joined the race.
Candidates have until Thursday to win the backing of at least 80 MPs before they can move to the next stage of the process, which was triggered by Angela Rayner’s resignation as deputy leader of the party amid the fallout from her tax scandal.
But Thornberry’s entry is particularly notable given her explicit call for a wealth tax.
Her endorsement for a wealth tax follows numerous comments from the likes of former business secretary Jonathan Reynolds and Chancellor Rachel Reeves playing down the prospect of wealth taxes being hiked at this year’s Autumn Budget.
In a post on X, Thornberry – who was snubbed for a cabinet role by Starmer – said: “We fought hard for a Labour government. But we’ve made mistakes and must listen.”
“Welfare. Gaza. Wealth tax. Changes to come on SEND.”
“I will be a voice for the membership, unions, Parliamentary Labour Party, and our constituents – not just nod along.”
Rachel Reeves issued a damning response to a Labour backbencher demanding that the government consider a wealth tax during a hearing in the House of Commons on Tuesday, claiming it would be a “huge mistake” to do so.
The Chancellor boasted about a number of taxes it had introduced on the wealthy before claiming there was little evidence to support the view a wealth tax would raise revenue.
“We got rid of the non dom tax status, we put up capital gains tax, we started treating carried interest as income not capital gains, we introduced new taxes on private jets, we put VAT on private school fees and we changed the reliefs on agricultural property,” Reeves said.
“Some countries around the world do have a wealth tax, but countries like Switzerland don’t have inheritance tax.”
“I think it would be a mistake to get rid of inheritance tax and replace it with an unproven tax without knowing what revenue it would bring in.”
Wealth tax debates to roar on
Her punchy remarks come a day after Louise Haigh wrote a scathing article in the New Statesman taking aim at Reeves’ fiscal rules and the Office for Budget Responsibility (OBR) for becoming a “gatekeeper of orthodoxy”.
Thornberry’s post is also likely to worry senior officials, who will hope that a friendlier voice to the government takes on the role as deputy leader.
The opening of the deputy leadership contest has offered disgruntled Labour backbenchers the platform to speak out about their frustrations with Starmer’s government within weeks of a critical Autumn Budget.
Thornberry was rejected for a ministerial role by Starmer when he formed his government in July 2024 given she had previously served as shadow attorney general in the run-up to the General Election.
The position is held by Lord Hermer, who was not moved in a weekend reshuffle despite criticism over his time in the role.
Government ministers have talked up the importance of the role, with health secretary Wes Streeting likening the deputy leader to a “campaigner-in-chief”.
In a statement, Phillipson said she was running to become deputy leader to “deliver for working people”.
“I am a proud working-class woman from the north east. I have come from a single parent family on a tough council street, all the way to the Cabinet, determined to deliver better life chances for young people growing up in our country,” she said.
“I’ve taken on powerful vested interests in the education sector – and even as they threw everything at me, I have never taken a backwards step. I will bring that same determination to every battle ahead of us.
“Because make no mistake: we are in a fight. We all know the dangers Reform poses to our country.”