This comment piece by our Executive Director, Robert Palmer, first appeared in The Times.
The real heroes of our society are emerging: they are nurses, supermarket staff, delivery drivers and helpful neighbours. Many of these people are woefully underpaid.
The coming months will see politicians urge the public to show solidarity normally reserved for wartime.
When the worst is over, there will be a big debate about the role of the state and to what extent measures introduced to help get us through will be rolled back.
After the 2008 financial crisis, the burden of spending cuts fell disproportionately on the disabled, sick and vulnerable. Even the NHS, despite record investment, failed to keep up with demand. The promise to the families who have lost loved ones to this epidemic must be “never again”.
Politicians would be foolish to think that the public hasn’t noticed the deterioration of our public realm. One of the consistent messages I have heard in focus groups from Blyth Valley to Hastings since the election is that people feel insecure. Just about managing families are worried about their future amid pervasive resignation with the way things are.
That was the temperature of the nation before coronavirus arrived.
The health and economic emergency we’re facing has exposed even further the threadbare nature of our social safety net. This means that an austerity re-run is not an option. Instead, what we need is something closer to the spirit of 1945, when post-war rebuilding saw a new political consensus that included the founding of the NHS and an expansion in state support.
The Prime Minister has already suggested that he gets this. Earlier this month he said that: “In 2008 everyone said we bailed out the banks and didn't look after the people who really suffered. This time we will look after the people who really suffer..."
The government should be bold. Many of the changes introduced over the last few weeks, such as more generous sick pay and Universal Credit, must stay. But we should go further, for example by introducing a minimum income guarantee.
As we start to rebuild after the immediate crisis has passed we need a new social contract to support increased spending. Tax loopholes exploited by the wealthy and companies should be closed for good. Serious consideration needs to be given to a tax on wealth. Some are suggesting an extra levy on companies making super-sized profits, as happened during WWII. We also need to properly resource HMRC and stop the current programme of layoffs of tax staff who have been designated key workers. These measures would ensure that those with the broadest shoulders are contributing to our recovery.
Polling that my organisation - Tax Justice UK - carried out as we went into lockdown found that this would be popular. 74% of the public want to see the wealthy paying more tax. Only 24% of people rule out paying more tax themselves.
Before the virus struck, there were signs that a cross-party space was opening up to address issues of inequality and public services, with the Conservatives championing a “levelling up” agenda.
Once we’re through the worst of the crisis, these discussions will become even more acute. Progressive tax reform needs to be part of the mix if the public is going to be able to confidently say “never again”.
A poll carried out as the UK went into coronavirus lockdown found Brits already concerned about the state of the NHS, public services and poverty. The poll of 3,000 people by Survation for Tax Justice UK revealed significant support for higher taxes on wealth and companies. The detailed results are available here.
We’re all coming together to help get through the devastation caused by coronavirus, but the crisis has exposed how threadbare our public services have become.
When we emerge from this, we need a response that’s along the lines of 1945, when we created the NHS, rather than a repeat of post-2008 austerity. Instead of looking for more cuts, the public favours policies that strengthen our precarious social safety net.
The poll found more than three quarters (79%) believe that NHS, policing and education were either the same (25%) or have become worse (53%) in the last 10 years; 67% said homelessness was worse; 78% feel that poverty was either the same or worse; while people think that foodbank use (64%) and inequality (63%) have both got worse.
The extra government spending introduced to deal with the crisis will largely be funded through borrowing and money creation. But as the crisis fades, a return to austerity would go down badly with the country. Higher taxes on wealth and companies would be a popular way to support more government spending and tackle rampant inequality.
74% of the public want to see the wealthy paying more tax - including 64% of Conservatives. Nearly two thirds of respondents (66%) believe that people who earn a living from their wealth should face the same tax rates as those who work. 69% support council tax reform to make it more closely reflect current house prices, so those with more expensive homes pay more. 63% support an annual wealth tax, including 57% of Conservatives. Only 24% don't want to pay more tax personally and a similar percentage (26%) of respondents want to see tax cuts for everyone.
The poll also found people in an uncompromising mood about companies and individuals who avoid tax, 87% think that the government should close tax loopholes for corporations and individuals, meanwhile 74% agree it’s not right that wealthy people can pay for accountants to find ways to avoid paying their share. 84% say tax avoidance by companies is morally wrong, even if legal, and a similar proportion (80%) take the same view of tax avoidance by individuals. 67% support higher taxes on companies’ profits, including 61% of Conservative voters.
People have had enough of the clever accounting that allows companies and wealthy individuals to pay less than they should. We need an economy that prioritises care. If we are to be resilient to future shocks, that means the strongest taking their fair share of the burden through higher taxes on wealth and companies.
Post-crisis tax changes could include higher taxes on wealth and a tax on super-sized corporate profits. Any reform would have to be accompanied by more resources to HMRC to administer the scheme.
This polling builds on our report “What’s wealth got to do with it", which was based on seven focus groups asking the public their attitudes on public spending, wealth and tax. It is available here. It is part of an ongoing project to understand public attitudes on tax.
The survey took place 17-23 March via an online panel and consisted of 3,010 UK residents aged 18+. It is part of an ongoing project by TJ-UK to test attitudes on public services, inequality and tax. Download the full results tables here.
This project was funded by the Friends Provident Foundation.
As we come to the end of our second week in Coronavirus lockdown, the impact of this crisis is becoming stark with thousands sick, businesses struggling and the government taking unprecedented measures to intervene in the economy.
Our work at Tax Justice UK is part of a broader movement to achieve a fairer society so that we can all thrive. Over the last couple of weeks we’ve teamed up with other groups to push the government to take more decisive action.
We joined over 100 economists calling for more support for the self-employed.
Along with Greenpeace, and dozens of others, we argued that any bailout of the airline industry should come with stringent conditions on tax, workers rights and the environment.
With 80 organisations we called for urgent action to stop millions of families falling into problematic debt, including from council tax. The government has already responded with a three-month payment freeze on credit cards and loans.
We’re also starting to think about how politicians deal with what comes after the crisis. More austerity is simply not an option.
Next week, we’re publishing a big opinion poll taken as the country went into lockdown. The public is in no mood for more cuts, and the vast majority of people support higher taxes. We’ll share the findings with you when they’re out.
Letter in response to the Chancellor of the Exchequer’s announcement of support for businesses, Monday 22nd March, 2020.
A welcome change but more is needed
We welcome the government’s new measures to support workers, particularly the introduction of grants for wage support. But despite the scale of these spending commitments, there is a real danger that millions of workers will not feel their benefit.
The government must move decisively to get cash into the bank accounts of households and firms before the economic dominos start to fall. Substantial support has been announced, which will be welcomed by many workers -- but it will not reach all who need it. The government is certainly moving in the right direction, but the new measures will fail to reach all workers, and could take until the end of April to come into force.
More clarity is also needed on the announcement that the government will provide grants to businesses, covering up to 80% wage costs to a limit of £2,500 per worker. If these grants reach the businesses that need them, they could prevent millions of redundancies. But there is no assurance that every business that needs support will receive it: the government needs to specify if the payment is more or less automatic, how it will get into firms’ accounts quickly and how it will ensure that this cash translates into wages at the end of the line.
Stipulations against layoffs need to be in place
A further problem with the announced plans is that no stipulations are placed on firms keeping workers on payroll. Financial support for firms must come with conditionality: at a minimum, no workers are to be laid off. People are losing their jobs right now - the government must act immediately to stem the flow. Without this stipulation put in place immediately, firms - and their payroll systems - will be shutting up shop in the intervening period, simply precluding the possibility of utilising the government’s ‘Job Retention Scheme’.
The self-employed are left out in the cold and need urgent support
The 5 million people who are self-employed will have taken little comfort from last Friday’s announcements. Greater support is needed. The expansion of an already overburdened Universal Credit system to cover the self-employed will make little difference. While a worker on PAYE could receive up to £2,500 per month, a self-employed worker might only receive statutory sick pay - £94.25 per week.
It is our understanding that self-employed workers who have filed tax returns with HMRC in the past could be supported within days of a governmental decision. As HMRC already holds the bank account details of these workers, it would simply be a matter of paying cash into their accounts.
Universal Credit will not be able to cope or deliver
Universal Credit is going to wilt under the pressure of new unemployed applicants in the coming weeks and months. Other than a minor improvement in levels of income support, no support has been announced for those outside of formal employment, unemployed persons, those receiving personal independence payment, or others without a current employer such as university students. For these people, immediate removal of means-testing from current social security payments should be introduced as a matter of urgency.
We applaud the government for taking advice from the TUC and CBI, and recent measures move very much in the right direction. But it must go further - time is of the essence. Economic collapses become increasingly difficult to arrest if they are allowed to continue unabated, and there is a real risk that this recession could turn into a major depression. We call on the government to convene a cross-party task force as a matter of urgency to strengthen the measures announced last Friday.
(Associate Professor in Economics, UWE Bristol)
Rob Calvert Jump
(Research Fellow in Political Economy, Greenwich University)
(Emeritus Professor , University of Essex)
(Senior Lecturer in Economics, UWE Bristol)
(Chief Executive of the New Economics Foundation)
(Director, Women's Budget Group)
(Emeritus Professor of Accounting, University of Essex)
Sunil Mitra Kumar
(Lecturer in Economics, King’s College London)
(Professor of Economics and Public Policy, King College London)
(Professor of Economics and Macrofinance, UWE Bristol)
(Executive Director, Positive Money)
(Principal Lecturer, Department of International Business & Economics, Faculty of Business, University of Greenwich)
(Lecturer in Digital Economy, King’s College London)
(Director of the Common Wealth think tank)
(Director of Tax Justice UK)
(Director of Compass)
(Vice President, The Democracy Collaborative)
(Fellow, UCL Institute for Innovation and Public Purpose)
(Former Professor of Feminist Legal Studies Former MEP)
(Director of the Jubilee Debt Campaign)
(Professor of Political Economy, University of Sheffield)
(Assistant Professor, Gender Studies, LSE)
(Fellow, European University Institute)
(Chief Executive, Centre for Local Economic Strategies)
(Director of Autonomy)
(Associate fellow at IPPR)
(Professor Emerita of Housing Policy, Centre for Housing Policy, University of York)
(Lecturer in International Political Economy, City, University of London)
(Senior Lecturer in Finance, University of Hertfordshire Business School)
(Fellow Emeritus in Economics, City, University of London)
(CEO, Finance Innovation Lab)
Guglielmo Forges Davanzati
(University of Salento)
(Distinguished Research Fellow, Institute for Strategy, Resilience and Security, University College London)
(Professor of Macroeconomics and Policy, Cranfield University)
(Professor of Economic Policy, University of Oxford)
(Senior Lecturer in Economics)
(Lecturer in Economics, Manchester Metropolitan University)
Frank van Lerven
(New Economics Foundation)
SOAS University of London
University of Greenwich
Neville R Norman
Universities of Melbourne and Cambrdge
Pedro Mendes Loureiro
University of Cambridge
New School for Social Research
University of Hertfordshire
Mary V. Wrenn
U. of the West of England
University of Cambridge
Prof of Economics, University of Greenwich
Ingrid Harvold Kvangraven
University of York
Professor of International Political Economy, King’s College London
Associate Professor in Industrial Relations, Warwick Business School
Principal Lecturer, PSIRU, University of Greenwich Business Faculty
Reader in Economics, SOAS University of London
Associate Professor, Erasmus University Rotterdam
Associate Professor, University Sorbonne Paris Nord
Assistant Professor, Gender Studies, LSE
Janet Veitch OBE
Chair, UK Women’s Budget Group
Associate Professor of Economics, Western New England University
Assistant Professor of Economics University of Rhode Island
Lecturer in Economics, SOAS University of London
Vrije Universiteit Brussel
Lecturer, Glasgow Caledonian University
Economist and author
Professor, University of Manitoba
Senior Lecturer, Anglia Ruskin University
Resolution Foundation and Fathom Consulting
Professor of Practice in International Political Economy at City, University of London
Economist, Washington, DC
Professor of Regional Political Economy University of Glasgow
Professor of Economics, Berlin School of Economics and Law
Prof Pritam Singh
Visiting Scholar, Wolfson College, Oxford
Dr Jerome De Henau
Senior Lecturer in Economics, Open University
Associate Professor in Ecological Economics, University of Leeds
Research Fellow, University College London
Senior Lecturer in Economics, University of Greenwich
PhD Student, Economics Department, The New School for Social Research
Associate Professor in Economics, University of Greenwich
Assistant Professor in International Political Economy, London School of Economics
Professor, Leeds Beckett University
Senior Lecturer, Economics, University of Greenwich
Alfredo Saad Filho
Professor of Political Economy and International Development, King’s College London
Emeritus Professor of Political Economy, Queen Mary University of London
Andrew Simms, Co-director
Centre for Global Political Economy, University of Sussex
Senior Lecturer in Economics, Goldsmiths, University of London
Research Associate, University of Oxford
Author and economics journalist
Reader in Political Economy of Development at the University of Cambridge
Professor Emeritus, University of Oxford
Hon Prof, Bartlett, UCL
Senior Research Fellow, Institute for Innovation and Public Purpose, UCL
Josè D. Villadeamigo
Visiting Researcher, CEPED-FCE-UBA - Member of PIUBAD, Argentina
Chair of the Progressive Economy Forum.
Professor emeritus at SOAS
Rishi Sunak’s first budget was dominated by coronavirus, but the Chancellor also ramped up spending. This will be funded by extra borrowing. Despite the leaks in advance of today’s speech, the Chancellor has ducked big questions about how to make the tax system fairer and more effective.
Robert Palmer, Executive Director of Tax Justice UK said: “After years of austerity the Chancellor has turned on the spending taps. The Conservatives have promised billions for infrastructure but this budget won’t provide the much needed increase to other areas including social care and local government.”
The Chancellor announced a number of small tax changes that Tax Justice UK has called for, including reducing entrepreneurs relief, cancelling cuts to corporation tax and increasing funding to HMRC to tackle tax dodging.
Mr Palmer added: “It’s good to see some modest measures to increase taxes on wealth and companies. But these are baby steps compared to what’s needed to help fund public services and tackle inequality. The more ambitious ideas floated in recent months, such as a mansion tax or higher fuel duty, fell amid backbench Tory rebellion. On tax, this budget is the dog that didn’t bark”
Focus groups carried out after the election by Tax Justice UK and Survation found that people want to see much more investment in their local areas. No one called for tax cuts and there was support for some higher taxes on wealth.
New figures show vast majority of inheritance tax breaks for farms and businesses go to the very wealthiest families
In 2016/17 the government handed out £800m in inheritance tax breaks for farmland and businesses. According to new figures released by Tax Justice UK today, almost 70% of this went to property worth over £1m.
Reports in advance of the budget suggest that the Chancellor Rishi Sunak is looking to restrict inheritance tax breaks. This would help to fulfil the Conservative manifesto pledge to limit the “arbitrary tax advantages for the wealthiest in society”.
Robert Palmer, Executive Director of Tax Justice UK said: “The Chancellor is desperately looking for money to help ‘level up’ left behind parts of the country. Restricting inheritance tax breaks to the most needy families would be a sensible way to do this.”
In June 2019, we published the report In Stark Relief, which exposed how the current system of inheritance tax breaks favours very well off families. The current system of reliefs is on top of the tax free allowance of up to £950,000 that is available to married couples. Tax Justice UK is calling on the government to review inheritance tax reliefs and consider a cap on the amount that can be claimed.
Agricultural property relief reduces inheritance tax on agricultural property at a rate of up to 100%, while business property relief reduces tax on business property and shares by between 50 and 100%. The special treatments for agricultural and business property are often justified as a means of protecting small family farms and businesses, but the reality is that most of this support goes to the wealthiest families.
The new figures released are based on a Freedom of Information Act request to HMRC.
Notes to editors
Tax Justice UK asked HMRC to provide information on the distribution of Agricultural Property Relief and Business Property Relief. 2016/17 is the most recent year that figures are available for. HMRC provided this information split by the value of the property that relief was claimed on. The figures in the table below are for the total value of the property, as opposed to the amount of tax saved.
The Marmot Review's finding that life expectancy for poorer women has decreased in the last decade is a stark illustration of what deep and entrenched inequality means in the UK today.
The UK is one of the richest countries in the world but the report highlights how social, economic and wealth disparities have led to a situation where poorer women's life prospects have gone backwards.
The Women’s Budget Group has launched the Commission on a Gender-Equal Economy in a bid to do something about this. They aim to develop an alternative economic approach so that that gender equality becomes a reality in the UK economy.
You can read Tax Justice UK’s submission of evidence to the commission here.
To submit evidence to the Commission on a Gender-Equal Economy, contact the Commission’s project manager, Marion Sharples: marion.sharples [at] wbg.org.uk.
In the wake of a general election that gave Boris Johnson a big victory, there are good reasons to think that the Prime Minister will open the spending taps. The current 80 seat majority owes much to Conservative success in winning former Labour strongholds, where voters want to see better public services.
In advance of next month’s budget the government is rumoured to be considering higher taxes on wealth to help fund promises to “level up” newly Conservative areas. Focus groups carried out over the last couple of months by Tax Justice UK and Survation found that this would be popular.
Today we’re publishing our report What's wealth got to do with it? that lays out what we found when we asked voters their views on the election, the state of public services and the role that taxes on wealth could play in supporting government spending. The groups took place in new Conservative seats in former Labour heartlands such as Blyth and Wrexham, as well as other areas including London and Reading.
More or less everyone we heard from was desperate to see investment in their communities and many supported higher taxes on wealth to help pay for this. No one we spoke to called for tax cuts.
There was strong support for ensuring that income from wealth is taxed at the same level as income from work. Increasing capital gains tax would achieve this. There was more qualified support for reducing pension tax relief on the highest earners and adding more council tax bands for the most expensive houses.
Whilst it’s possible to make the case for more progressive taxation, the public was put off by language bashing the rich. This was in part because the people we talked to had very different ideas of what “wealth” meant, with many seeing it as having enough to live comfortably, as opposed to being very rich.
People were also deeply skeptical about whether politicians will deliver on their promises. There was little enthusiasm for either Labour or the Conservatives.
There are lessons here for the Conservatives. “Getting Brexit done” resonated among voters fed up with the stalemate of Westminster politics in the aftermath of the EU referendum. People expect the government to be able to deliver solutions to the long term decline experienced in many of the places we visited.
And there are lessons for those seeking to be leader of the Labour party. The public will support policies to increase taxes on wealth but broad attacks on the rich go down badly with most voters we spoke to.
We will follow up this report with further focus groups and an opinion poll after the budget in March. This next stage will help us work out what messages about wealth and tax resonate the most with the public.
You can read and download the report here. This research was supported by the University of Sheffield and the Friends Provident Foundation.
The UK is a wealthy country, but this wealth is very unevenly spread. The top 10% of households own almost half the UK’s riches.
This has real world consequences, the gap between the haves and the have nots means better life opportunities and health for some, compared to others.
That’s why we have launched a petition with 38 Degrees, urging the Chancellor, Sajid Javid, to act.
Wealth, such as land, shares and property are not effectively taxed. Our current system gives an advantage to those who live off their wealth, as opposed to those who work for a living.
One change that the Chancellor could adopt is taxing income from wealth at least as much as income from work. The Institute of Public Policy Research estimate that this would raise £90 billion over five years.
Our own polling commissioned with Oxfam showed the public overwhelmingly support this idea.
Join us in calling for an end to the low tax lifestyles enjoyed by some of the wealthiest people in the country and in urging a fairer Britain.
The latest Oxfam inequality report tells a staggering story about global inequality in a world that is richer than ever.
Twenty two of the world’s richest men have as much wealth as all the women and girls in Africa while the world’s billionaires enjoy riches equivalent to half the world’s total population.
The UK has 1980s levels of inequality despite growing riches and with no sign of a turnaround any time soon.
Read our Independent op ed urging Chancellor Sajid Javid to tax wealth more effectively as he bids to “level up” the UK.