Wes Streeting backs wealth tax and lower capital gains rates for entrepreneurs

Former Health Secretary Wes Streeting has backed the introduction of a wealth tax that works as part of his pitch for the Labour leadership.

He said the change would address an unfair system that penalises work, while encouraging investment by offering lower rates of capital gains tax to genuine entrepreneurs.

Streeting set out the policy on the BBC's Political Thinking podcast in his first in-depth broadcast interview following his resignation as health secretary last week.

He quit the cabinet after dozens of Labour MPs urged Prime Minister Sir Keir Starmer to stand down, fuelling intense speculation that the former health secretary was planning a bid to replace him as party leader.

Streeting did not mount an immediate challenge following his resignation, but has since said he will seek to enter any potential Labour leadership contest.

When he met Sir Keir in Downing Street the day before he resigned from the cabinet, he told the prime minister directly he would be challenging him for the Labour leadership, Streeting told the BBC.

As I said to the prime minister in my letter and privately, this is a government that lacks definition and also direction and vision, Streeting said. When people don't know who you are and what you stand for, they don't vote for you.

He said he had decided against that a few days before he resigned, after he had learned Greater Manchester Mayor and potential Labour leadership rival Andy Burnham had found a seat.

Josh Simons announced he was standing down as the MP for Makerfield on Thursday last week, paving the way for Burnham to stand as Labour's candidate in the forthcoming by-election.

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.

In his first major proposal, Streeting is suggesting reforms to capital gains tax, which is a levy on the profit made after selling an asset such as property.

The annual tax-free allowance for the levy is £3,000 and anything above this is taxed at rates that depend on a person's income band.

For example, higher or additional rate taxpayers have to pay 24% on gains in the current financial year.

Under the proposal, a person's capital gains tax band would be calculated by adding up their income and profits from assets.

On top of this, lower rates of capital gains tax would be offered to entrepreneurs who take risks building companies.

The Green Party has suggested an annual tax of 1% on assets above £10m and 2% on assets above £1bn.

In the Political Thinking interview, Streeting was also asked about his position on Brexit, which was a focal point of a speech he gave last weekend.

In the speech, he said leaving the European Union following the 2016 referendum had been a catastrophic mistake and the UK should one day rejoin the bloc.

But Streeting told the BBC in order to rejoin, there's something fundamental that would have to be true, which is, it would have to be the settled will of the country.