Taxing the wealth boom

3rd January 2021

Chancellor Rishi Sunak and millionaire wife Akshata, not suffering wealth loss at present

The agenda of the UK government, to protect profits ahead of public health as the core driver to tackle the COVID-19 pandemic, continues to inform their decision making and will result in greater numbers of unnecessary deaths. All of the evidence points to the return to school of pupils across the UK as being likely to cause a spike in infections, at a time when the NHS is on the point of being overwhelmed and a new highly transmissible form of the virus is rampant.

In a system which put the health and wellbeing of its population before the profits of business there would be only one course of action.  Close schools, lock down the economy and drive down infection rates to a level which can be managed within existing NHS resources.

A truly planned approach would also ensure that health and care workers, as well as teachers and support staff, would be prioritised for vaccination in order to allow them to get back to their professions as quickly as possible with the least risk of catching the virus.   

Some caveats would also need to be applied.  The children of key workers and the most vulnerable need to be accommodated, both in COVID secure childcare settings and potentially in socially distanced classrooms.  Workers who cannot afford to stay off work due to financial hardship must be compensated by the State, businesses forced to close need to be supported, prioritising the recovery of the cultural sector and workers in the arts needs more attention.  An effective test, track and trace system is long overdue.

It all costs money but the recent report of the Wealth Tax Commission identified a potential £260bn which could be raised from a windfall tax upon the wealthiest, over a five year period.  A more radical approach could raise even more.  Researchers at the Resolution Foundation think tank have this weekend found that the richest 1% in the UK have almost £800bn more wealth than previously thought, due to around 5% of the wealth of the richest households having been missed by official measures.

As a consequence of this research the Resolution Foundation estimate that the total share of UK wealth held by the top 1% of the population is up from 18% to 23%, as economist Jack Leslie put it,

“The UK has undergone a wealth boom in recent decades, which has continued even while earnings and incomes have stagnated.  But official data has struggled to capture these gains, and misses £800bn of assets held by the very wealthiest households in Britain.”

For workers in the NHS, care homes, public health and local government, on the frontline in the fight against COVID-19, the news of a wealth boom will no doubt come as a surprise.  Apart from having had to struggle thorough the past decade of austerity, most of these workers were handed a pay freeze, effectively a cut in real terms, in the recent budget by Chancellor Rishi Sunak. 

Not that Sunak has any personal interest but a wealth tax would require him to dip into his vast personal and family fortune in order to make a contribution.  Sunak’s wife, Akshata Murthy, and her relatives hold a multimillion pound portfolio of shareholdings in her family’s tech firm.  Murthy’s assets alone are estimated to be £430 million.

A screeching u-turn has seen the government concede that all primary schools in London must remain closed this week, although the same instruction is not being applied to other Tier 4 areas.  The National Education Union (NEU) has advised staff at primary schools that it is unsafe to return to the classroom this week and should resort to online learning.  The National Association of Headteachers (NAHT) has initiated legal action against the government demanding to see the safety evidence for the re-opening schedule.

In short the situation is chaotic.  Instead of consulting with the key professionals and workers in the health, care and education sectors the government has attempted to manage by kowtowing to the needs of business and avoiding an unpopular headline in the Daily Mail.  The irony is that the UK not only has one of the world’s highest death rates from the pandemic, it also has one of the deepest recessions and will take longer than most comparable economies to recover.  The government is failing on every front.

A public health crisis, dealt with more effectively, would not have generated such an economic crisis which in turn need not have escalated into an education crisis of such proportions.  There is only one cure for capitalist incompetence, arising from greed and self interest, that is to change the system fundamentally, so that it is based upon the needs of the people not those with vested interests in the status quo.

The case for socialism becomes clearer with each day.  In the meantime the workers having to follow the twists and turns of government policy will continue to deliver services to the best of their ability.  The vaccination programme is underway.  There is hope at least that some relief is on the horizon for those at the greatest risk.  The death count must be brought under control and stopped.  

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