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Labour needs to seize the agenda and fight for a wealth tax

RICHARD BURGON MP says Labour needs to spell out a bold alternative with a National Care Service funded by taxes on the super-rich

THE debate on how to fund much-needed social care investment has forced the issue of taxation to the top of the political agenda.

Of course, the crisis in social care goes well beyond just its woeful funding - it raises issues of privatisation and profiteering, of sickeningly low pay for such important workers, of deregulation, and of the underfunding of local councils.

But our broken social care system can’t be fixed without a huge boost to funding. The Health and Social Care Select Committee, for example, says a £7bn annual increase in social care funding would only be a “starting point” and that a “substantially higher” figure would be needed. 

It's right that the whole Labour movement is rejecting the regressive Tory plans to pay for much-needed investment through national insurance hikes. Such a hike would hit the lowest-paid workers while letting off the hook those whose income comes not from work but from wealth.

But what is Labour’s alternative to the Tory plan? It is simply not good enough to say we will wait until the next election to map out our alternative either on social care or on how we will raise the funds for investment in our public services. 
 

An election could now be less than two years away. Labour is lagging behind in the polls, the leadership’s approval ratings have plummeted this year with the public increasingly deeming it unlikely to form the next government. 

 

To turn this around our party needs to urgently paint a picture of what it stands for. Timidity at this time from the Labour leadership risks many more years of Tory rule. 

 

Instead it should seize this moment to spell out a better alternative to the Tory plan by calling for a National Care Service funded through a wealth tax.

 

Huge work was done on Labour’s vision for a National Care Service ahead of the 2019 election. That would include free personal care, support to local authorities to directly provide care rather than outsource it and proper pay and training for the workforce. This is a vision that we can be confident would resonate with the public.  The party needs to champion it. 

 

Likewise, a wealth tax is an idea whose time has clearly come. British billionaires increased their wealth by £106 billion during the crisis, according to the Sunday Times Rich List. That’s a sickening £290m per day. 

 

At the same time, a record 2.5 million food bank parcels were given to people in crisis in the past year.  

 

There is a growing international clamour to take action against wealth. The UN secretary-general called on “governments to consider a wealth tax on those who have profited during the pandemic, to reduce extreme inequalities.” 

 

Even business news sites like the Financial Times, Bloomberg and Financial News have been running articles with headlines such as “Why the toughest capitalists should root for a wealth tax,” “The wealth tax is going global” and “Wealth managers warn UK's richest: A wealth tax is coming.”

 

The British Wealth Tax Commission has recommended a one-off tax on net wealth that would be paid over a number of years. Their estimates suggest that a 10 per cent tax on those with net wealth of more than £5m would raise over £100bn.  

 

The Sunday Times has launched an interactive tool that shows how much could be raised with a “wealth tax on the super-rich.” That calculates that a 5 per cent tax on wealth above £100m, 10 per cent on wealth above £500m and 20 per cent on wealth above £1bn would raise £97bn. 

 

The evidence suggests a wealth tax would be popular. A YouGov poll last May found that 61 per cent of people would approve of a wealth tax on net worth over £750,000, excluding any personal pension savings and their main home. Just 14 per cent opposed this idea and even 51 per cent of Conservative voters backed it.  

 

The Tory National Insurance hike as well as planned cuts to universal credit and the refusal to properly resource the education recovery plan show the Tories will use the coming Spending Review to pay for this crisis on the backs of the majority, not the wealthy few. 

 

If Labour is to expose the Tory rhetoric about “levelling up” and boost our standing in the polls then the leadership needs to be much clearer about what the party stands for. A wealth tax is the perfect way of showing whose side we are on. 

Richard Burgon has launched a petition with the Labour Assembly Against Austerity calling for a Wealth Tax. Sign up here www.bit.ly/timetotaxthesuper-rich 

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