A total of 30 MPs have urged Rachel Reeves to impose a wealth tax on Britain’s rich in next week’s budget rather than announce spending cuts that would hit the poor hardest.

Former Labour leader Jeremy Corbyn and his then shadow chancellor, John McDonnell say she could raise £24bn a year from a two per cent tax on wealth above £10m and lay the foundations for a fairer and more sustainable economy.

Labour has committed not to increase taxes on “working people” by raising income tax, national insurance and VAT, and has promised to cap corporation tax on businesses at the current rate.

The signatories however still argue that wealth is under-taxed in the UK and a new levy on the rich would generate a “large stream of revenue”.

The letter, organised by the campaign group Green New Deal Rising, says in contrast to the general trend, taxes on the very richest are only slightly more onerous than they were in the mid-1960s.

They told the Guardian: “This is deeply unfair and immoral: in an age of climate and economic crises, where public funds are desperately needed, it is necessary that we redress this imbalance. The transformative potential of taxes on extreme wealth is clear, and appetite for them is growing.”

Cabinet united on the Government’s spending plans

Rachel Reeves has insisted that the Cabinet is united on the Government’s spending plans amid reports of arguments over the upcoming Budget.

The Chancellor was reportedly locked in negotiations with some ministers until last week as she sought £40 billion of tax rises and spending cuts ahead of the announcement on October 30.

Speaking to the PA news agency, Ms Reeves said the final settlements had been confirmed but acknowledged it had been “right for all Cabinet members to want to get the best settlement for their departments”.

She added that settling departmental budgets was “an important achievement and shows the determination of this Government to get a grip of the public finances, and shows that we are as one, united in fixing the mess that the Conservatives left for us”.

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Ms Reeves insisted her Budget would be “honest” about the state of the public finances and what needed to be done to put them “on a firm footing” while doing “everything within our power” to protect living standards and the NHS.

The health service is one of the few departments expected to emerge victorious from the Budget process. Reports suggest it will receive a significant real-terms increase in funding as the Government stakes its popularity on cutting waiting lists.

But Government sources said reports of an increase of three to four per cent were inaccurate.