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Editorial: Trickett's wealth tax study is a compelling challenge to a parasitical ruling class

JON TRICKETT’S landmark wealth tax study and Barry Gardiner’s fire-and-rehire Bill both indicate that backbenchers are doing the heavy lifting when it comes to providing a real opposition to the Conservatives.

Labour continues to lag the Tories in the polls, often by significant margins. Yet there is evidence of widespread anger about the scale of inequality in Britain and a real appetite for change. 

Deep anxiety about the cost of living ought to translate into support for the opposition, given the government’s obvious responsibility: it has directly sliced £1,000 a year off the incomes of an estimated 4.4 million households by ending the universal credit uplift; it is hitting public-sector workers with pay freezes or insultingly low “rises” that do not make up for years of shrinking pay packets; it declines to do anything about companies that force down wages through fire and rehire or intervene in the energy market to protect people from soaring prices.

But it remains extremely unclear whether Labour is a real alternative. 

The opposition declines to shoot even when presented with an open goal, as during its conference when Starmer went on telly to reject his own promise to renationalise energy. Conditions were perfect to level such a demand: the gas price crisis made the benefits obvious to every household in the country, there was a rare media focus on opposition policy, Britain was shortly to host a major global climate change summit and polls have shown consistent majority support for nationalisation for years. 

Labour could have put the spotlight on the government and politicised an energy crisis ministers try to present as an unstoppable global phenomenon. Its failure left government claims to be powerless unchallenged.

That’s what makes Bills like Gardiner’s bid to ban fire and rehire so important. Forcing votes on these issues compels the Tories to show their true colours as guarantors of unchecked corporate power over workers. 

Johnson claims to want a transition to a high-wage, high-productivity Britain: Gardiner shows up the PM’s unwillingness to take even the most basic steps to protect pay packets.

And Trickett’s invaluable report The Nature of Wealth in Britain shows how divorced Tory rhetoric is from reality. It demonstrates the injustice at the heart of the British economy — the way wages have shrunk as a proportion of national income for decades, while the accrual of unearned wealth has ballooned. 

He cites the Financial Times on how rising productivity by British workers following the bankers’ crash was not matched by rising wages, with higher output simply meaning bigger profits for employers. He cites bosses’ club the CBI on the immense cash reserves held by British businesses — over £900 billion — when our economy is blighted by chronic underinvestment.

He details the huge increase in the wealth of the very wealthiest over the course of the pandemic and before, the way taxes fall far more heavily on the earned incomes of workers than on unearned incomes derived from property or investments and the poisonous consequences of the wealth gap for democracy itself.

Trickett does not propose a specific tax, instead setting out what various models would raise. The sums are enormous — when combined with bringing dividends tax into line with income tax, raising capital gains tax and closing tax loopholes, the median raised would be nearly £500bn over five years, enough, he points out, to insulate every home in the country, build 150,000 houses a year, raise NHS pay by 15 per cent and much more. 

With the Treasury demanding cuts to public spending, it is more important than ever that the left assert consistently and publicly that Tory calls to tighten the purse strings are utterly unnecessary: the money for higher wages and better public services exists. It’s just in the wrong hands. A wealth tax is long overdue, and must become a central demand of the labour movement.

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