The Treasury’s top team has been reshaped with the arrival of Torsten Bell and senior colleagues from the influential Resolution Foundation think tank, in a move that has heightened expectations of a radical shift in the UK’s tax system.
Bell, formerly Ed Miliband’s policy director and until recently chief executive of the Resolution Foundation, is now a central figure in Chancellor Rachel Reeves’ preparations for the autumn Budget. His long-standing arguments for taxing wealth more heavily than income are seen as a clear sign that property, inheritance and investment income may soon face higher levies.
The appointment of Dan Tomlinson, a former Treasury official who spent seven years at the Resolution Foundation, has reinforced the perception that wealth taxes will be “hard-wired” into Reeves’ fiscal plans.
Tomlinson has previously argued that it would be “indefensible” not to consider higher wealth taxes, co-authoring a 2021 report with Bell which described Britain’s tax system as structurally biased in favour of wealth over earnings.
“The 2020s will pose big questions for our taxation system,” the report said, highlighting carbon taxes, the relative taxation of gas versus electricity, and the under-taxation of capital compared with labour.
A more recent Resolution Foundation paper, Under Pressure, co-authored by Tomlinson, James Smith and Krishan Shah, concluded: “Higher taxation on wealth and non-employment income are very likely to be part of the answer for governments seeking to cope with fiscal pressures in the 2020s.”
Radical incrementalism
Bell himself has described Britain’s tax code as a “dog’s dinner” and has advocated what he calls “radical incrementalism” — gradual but fundamental reform to shift the burden of taxation away from wages and towards assets.
In his book Great Britain? How We Get Our Future Back, he floated the idea of raising income tax by 5p in the pound in order to scrap employee National Insurance contributions altogether. Such a move would significantly alter incentives in the labour market but would hit landlords and pensioners, who currently do not pay NI.
Bell has also been a vocal supporter of freezing tax thresholds — a policy Reeves is expected to extend in her autumn Budget — which raises revenue by dragging more people into higher tax bands as wages rise.
A Treasury think tank reunion
The Treasury now resembles a mini-Resolution Foundation reunion. Alongside Bell and Tomlinson, the Labour government has tapped into a network of economists linked to the think tank.
• Baroness Shafik, former deputy governor of the Bank of England and now a Starmer adviser, co-chaired a flagship Resolution Foundation report calling for wealth taxes on inheritance, land and property.
• Richard Hughes, chair of the Office for Budget Responsibility, was a research associate at the Foundation between 2019 and 2020. He has advocated for radical borrowing rule reforms and criticised both Conservative and Labour fiscal plans.
This web of connections, stretching from the Treasury to the OBR and beyond, signals a more coordinated effort to reshape Britain’s fiscal framework.
Wealth taxes remain politically contentious. Reeves has pledged not to raise the main rates of income tax, National Insurance or VAT, but faces a £20bn to £40bn fiscal hole which must be filled either through new taxes or spending cuts.
Conservative leader Kemi Badenoch has seized on the issue, warning that targeting wealth risks driving capital overseas. Business groups have also expressed concern that higher taxes on property or investment income could undermine growth at a time when corporate confidence is already fragile.
But supporters argue that taxing accumulated wealth rather than wages is both fairer and more sustainable. Household wealth has risen from three times GDP in the 1980s to nearly eight times GDP today, yet revenues from wealth-related taxes have remained broadly flat as a share of the economy.
With Reeves preparing her second Budget, due this autumn, insiders expect to see measures that nudge the tax system towards wealth. Options reportedly under consideration include:
• Reforming inheritance tax thresholds and reliefs.
• Increasing capital gains tax rates further or aligning them with income tax.
• Expanding council tax reform or introducing a land value tax.
• Extending the freeze on income tax thresholds.
While the Treasury insists it is “committed to keeping taxes for working people as low as possible”, the presence of Bell, Tomlinson and other Resolution Foundation alumni makes a shift towards wealth taxation more likely than ever.
For businesses and investors, the message is clear: the balance of Britain’s tax system is set to change, and the autumn Budget could mark the first step in a fundamental reshaping of how success is taxed.
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Torsten Bell’s Treasury influence raises likelihood of wealth tax reforms in autumn Budget