Neil Kinnock demands new 2% wealth tax to fund Keir Starmer's £5bn U-turn

Labour could slap a wealth tax of 2% on assets worth more than £10million, a former Labour leader has suggested. Lord Neil Kinnock said that Sir Keir Starmer's Government should implement a 2% wealth tax on assets above £10 million.

Reflecting on the Government's first year in power, Lord Kinnock said that "the appearance is being given that they have [been] bogged down by their own imposed limitations".

He told Sky News's Sunday Morning With Trevor Phillips that there are things the party could do that "would commend themselves to the great majority of the general public" and they include "asset taxes".

He added: "By going for an imposition of 2% on asset values above £10 million, say, which is a very big fortune, the Government would be in a position to collect £10 billion or £11 billion."

Lord Kinnock said people's homes woud be secure if the Government did not tax assets of £7million or so.

He said "that's not going to pay all the bills" but that kind of levy secures revenue and tells the country "we are the government of equity".

When asked if the government should reconsider its fiscal rules, which determine spending and borrowing limits, he suggested that the cabinet would be ready to consider it.

The leader of the rebel Labour MPs who forced Sir Keir Starmer to abandon his welfare reforms has called for a wealth tax to meet the £5billion cost of the U-turn.

Rachael Maskell, who led the backbench Labour rebellion which forced further changes to the reforms last week, suggested that as much as £24bn a year could be raised by increases in capital gains tax and other measures.