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IN the recent Autumn Statement, Tory Chancellor Jeremy Hunt painted a rather rosy picture of the current state of the British economy.
The impression was that our economy had bounced back and that he would now deliver tax cuts that would put money back in the pockets of working people.
But this optimistic take ignores the reality faced by millions. We are living through the largest fall in living standards since records began 75 years ago and wages are set to be no higher in 2028 than they were 20 years before.
The Tories are set to make that even worse with annual cuts of almost £20 billion planned to public spending if they win the next election.
That’s austerity on a scale similar to what George Osborne carried out at the start of this era of Tory misrule.
Our services really couldn’t cope with that. The wave of local councils collapsing into administration is a sign of what is to come.
Even the trumpeted Tory tax cut for working people is a sleight of hand. For every pound the Tories are handing back to workers in lower National Insurance rates, they are taking four more from people’s pockets with their freezing of tax allowances, which is one of the biggest tax raids on working people in history.
Despite all the spin, the Tories’ plan is for more austerity, deeper cuts in living standards and more tax hikes on ordinary people. After 13 years of this approach, we know this is not the answer and will simply prolong the economic stagnation and deepen the social crisis.
Already 14 million people are living in poverty, including over four million children, in what is meant to be the sixth-richest economy on Earth.
One in seven people face hunger across Britain, equating to around 10 million people. We are living in a country that has more food banks than branches of McDonald’s.
Six million households are in fuel poverty, meaning they are unable to afford to heat their homes to the temperature needed to keep warm and healthy.
Homelessness in our society is on the rise as rents and mortgages soar.
On top of all this, NHS waiting lists are at a record high with 7.8 million people waiting for appointments in England alone, undermining public health and the economy as people can’t return to work.
People are poorer, colder, sicker and hungrier than they were 13 years ago.
But the Tories want to go into the next election having set a trap for Labour by claiming that cuts are again needed and that the programme of public investment to break the economic stagnation is simply unaffordable.
All progressives must take that argument head-on. By eliminating the tax perks handed to the rich and by creating a fairer tax system that focuses on the wealthiest, we can invest to rebuild the economy so it serves the majority of people, we can strengthen society by renewing public services — and we can give people back some hope.
As part of that fight against the Tory lie that public investment is unaffordable, I will be campaigning in the new year for a programme of simple measures that would raise well over £40bn per year. That’s more than double the £20bn in cuts the Tories are planning.
This could not only tackle the social emergency we face but fund the investment we need to build the infrastructure for a greener, fairer, high-wage economy.
The obvious starting point should be a wealth tax. We hear a lot about the cost-of-living crisis but it’s not been a crisis for the elites, it’s been boom time.
For example, there have never been so many British billionaires. They are getting ever richer having increased their wealth by an eye-watering £120 million every single day over the past decade.
An annual wealth tax on the very richest of just 1-2 per cent on assets over £10m would help address the grotesque wealth inequality scarring our society and raise up to £22bn per year.
It would be popular too, with polls showing it is backed by three in four people, including over two-thirds of Tory voters.
Another key part of the programme should be to end the scandal where wealth is taxed at lower rates than work.
Equalising the rates of capital gains tax, paid on income from the profit on the sale of certain assets, with income tax rates would raise up to £17bn per year. Likewise, taxing income from share dividends at the same rate as income from work would raise another £6bn a year.
We should also go after the big polluters driving the climate crisis. We could raise £2bn per year by closing the deliberate loopholes in the Tories’ energy windfall tax that led the energy companies off the hook.
While many struggle, some corporations have been reaping huge windfall rewards and passing these to their already-wealthy shareholders through share buyback schemes.
These buybacks further boost the value of the remaining shares that are overwhelmingly in the hands of the wealthiest in society. By introducing a 4 per cent tax on share buybacks as US President Joe Biden proposed in the US, the British government could raise an additional £2bn a year.
More could be raised for a special social emergency fund through specific windfall taxes on those sectors that have done well out of this crisis.
Banks have made a killing by hiking interest rates on mortgages but not passing these on to savers. Spain’s progressive government offers one example of what a windfall tax on banks could look like. It introduced a 4.8 per cent windfall levy on certain bank incomes above a threshold of €800m. Replicating that here could raise almost £4bn this year.
This Tory government has repeatedly shown whose side they’re on. For 13 years they have reduced the standard of living for working people and decimated the key public services we all rely on while cosying up to big business and giving handouts to the wealthiest.
People are crying out for change. By taxing the wealthiest, we can begin to invest to rebuild Britain in the interests of the vast majority of people — not in the interest of the wealthy elites that the Tories exist to serve.
Richard Burgon is Labour MP for East Leeds. Follow him on X @RichardBurgon.
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