The Scottish Secretary has dismissed calls from within his own Labour Party to introduce a wealth tax, arguing the policy would not work and could drive wealthy people out of the country.
Ian Murray told an audience at the Edinburgh Festival Fringe that whilst he "wished" a wealth tax worked, it would ultimately fail to raise the revenue needed to address Britain's economic challenges.
Labour figures back wealth tax
Several prominent Labour politicians have supported the idea of a wealth tax, including former leader Lord Neil Kinnock, Welsh First Minister Baroness Eluned Morgan and former equality minister Anneliese Dodds.
The policy has also gained backing from trade unions and left-wing parties, including the Greens and Jeremy Corbyn's new, unnamed political party.
No silver bullet solution
Speaking to comedian Matt Forde on Thursday, Murray said there was "no silver bullet" to the country's economic problems, explaining that "if you pull one lever you have to push another" in reference to tax rises and public spending cuts.
The Scottish Secretary acknowledged that some Government decisions have been "unpalatable" but insisted "things would have been even more unpalatable" without making tough choices.
Wealth flight concerns
When asked directly about a wealth tax as a potential solution, Murray was categorical in his rejection. "No, it doesn't work. The Laffer curve is there for everyone to see," he said, referring to the economic theory showing the relationship between taxation and government revenue.
He argued that whilst a wealth tax might raise around £200 million, the costs would be enormous due to wealthy individuals leaving the country. "There is just flight, whether we like that or not," Murray explained.
International examples cited
Murray pointed to other countries that had attempted wealth taxes before rolling back their decisions as evidence the policy fails in practice.
He said every policy decision must be judged on whether it raises more money, is fair and equitable, and will resolve the situation. "If the answer to any of those questions is no, we should not do it," he stated.
Economic growth priority
The Scottish Secretary concluded that the "only real palatable option" was to grow the economy rather than rely on wealth taxes that he believes have already been "spent about 500 times over" in theoretical discussions.
Murray's comments highlight ongoing tensions within Labour over how to address Britain's fiscal challenges whilst maintaining economic competitiveness.
(PA) Note: This article has been edited with the help of Artificial Intelligence.
