CHRIS WILSON takes issue with Chancellor Rachel Reeves’s claim that there is no alternative to benefit cuts. A tax on wealth is not only possible, he says, but widely supported.
Let me begin with a confession. I am instinctively a Labour loyalist. I really want this government to be successful, and I have a deep and abiding hatred of the Tories in power. So I am almost, always, ready to believe a Labour government’s narrative.
Almost… But I cannot agree with the recent budgetary decisions, which risk pushing 250,000 children into poverty and penalise those already struggling to make ends meet or coping with difficulties due to disability.
I understand that President Putin is a game-changer and more money is needed for defence. I understand public debt needs to come down. I understand welfare must be reformed … but reducing payments for the most vulnerable is not what any Labour government should do. It is neither necessary nor moral, let alone social democratic or socialist.
What’s more, there is an alternative: a wealth tax.
Research by the group Patriotic Millionaires UK suggests some £50 billion can be raised to ease the pressure on the public purse and avoid attacking poor and vulnerable people in our society.
There is a growing consensus that this is the way to go. MPs such as Rachael Maskell and Neil Duncan-Jordan know this too. Maskell notes that a tax of as little as 2% on people with assets of more than £10 million would raise £24 billion every year. She is speaking truth to power and needs to be heard.
Popular
The Institute of Pubic Policy Research (IPPR) also thinks tax is the way to go, as does the Institute for Fiscal Studies (IFS) and groups such as Tax Justice UK, which has undertaken excellent and detailed work in this area.
Higher taxes on the super wealthy are also popular. According to YouGov, 78% of the electorate support an annual wealth tax for those with assets of more than £10 million.
Those MPs making a stand deserve support, and we should consider endorsing the policy recommendations made by Patriotic Millionaires UK and Tax Justice UK. They include these six:
- Apply a 1-2% wealth tax on assets more than £10 million, raising up to £22 billion a year.
- Equalise capital gains with income tax rates, raising up to £15.2 billion a year.
- Apply national insurance to investment income, raising up to £8.6 billion a year.
- End the inheritance tax loopholes that benefit the already wealthy, raising up to £1.4 billion a year.
- Reform the rules on non-dom status, raising up to £3.2 billion a year.
- Introduce a 4% tax on share buybacks, raising approximately £2 billion a year.
There is an alternative to cutting benefits, one that is electorally popular. Some Labour MPs understand this and should be commended. After all, no-one voted Labour to make the poorest in our society poorer still. In the end, it is that simple.
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Chris Wilson is a church minister, Christian socialist, active trade unionist and member of the ILP.
See also: ‘Labour in Government: We Need Hope, Not Hardline Policies’ by Mary Stratford
and: ‘Labour in Government: Why Slashing Aid is ‘a Strategic Error’ by William Brown
