Rachel Reeves Urged to Address Wealth Inequality in Upcoming Budget

Calls are growing for British Shadow Chancellor Rachel Reeves to focus on the wealthiest citizens in her upcoming Budget, as new analysis reveals that wealth inequality in the UK has reached alarming levels. A report from the Fairness Foundation indicates that the wealth gap between the richest and poorest segments of the population has widened significantly, creating potential threats to social stability and economic progress.

According to the report, the absolute wealth gap between the richest and poorest 10% of people in the UK increased by a staggering 54% from 2011 to 2021. This trend is attributed primarily to the rising values of assets such as property. The report highlights that inheritances and gifts have doubled over the past two decades to a total of £100 billion and are projected to double again by 2040. The wealthiest 10% of families consistently own just over half of the country’s total wealth, while the poorest 10% of households possess a total net worth of less than £15,400.

Will Snell, a representative from the Fairness Foundation, emphasized the need for immediate policy intervention, stating, “Without effective policy intervention, Britain will become steadily more unequal, and as a result, more socially divided, economically unproductive, and politically disengaged.” Snell called for “bold action” to address wealth inequality through effective taxation and equitable wealth distribution.

As Reeves prepares for the Budget, she faces the challenge of filling a projected £22 billion budget deficit, according to experts from the Institute for Fiscal Studies. She has indicated her openness to tax increases and spending cuts but appears to be resisting pressure to implement a dedicated wealth tax. Instead, Reeves has reiterated her commitment to ensuring that “those with the broadest shoulders should pay their fair share.”

In a recent statement made during a visit to Saudi Arabia, Reeves highlighted the importance of economic growth, noting, “Growth will be a big part of that Budget story, in a way that, frankly, I think growth has been neglected as a tool of fiscal policy in the last few years.” She underscored the necessity of maintaining fiscal rules while also preparing for future economic challenges.

The Labour Party has previously committed to protecting working individuals from increases in national insurance, VAT, and income tax. Nevertheless, speculation is mounting regarding Reeves’s potential to break this key election pledge. Over the weekend, she refrained from ruling out an income tax rise, asserting that she would “continue to support working people by keeping their taxes as low as possible.”

With the Budget scheduled for next month, the decisions made by Rachel Reeves will be critical in shaping the UK’s economic landscape and addressing the growing concerns over wealth inequality.