It needed to be said and well done to Michael Meacher MP for saying it: the war of austerity is bogus, fake, manufactured. The solution is simple says Meacher: the filthy rich are getting filthier rich, tax them. Of course – if you’re filthy rich, you will not ever even notice being slightly less filthy rich.
Meacher’s article is well presented and appears very well researched. Meacher consistently shows competence and capablity and is willing to address the big, important issues – often even against his own party’s policies. We need far more politicians like Meacher.
According to the annual Sunday Times Rich List, the richest 1,000 persons now sit atop of £414bn, a sum more than three times the size of the entire UK budget deficit. The richest 1% of the population, about 300,000 persons with an income of more than £3,000 a week, are estimated to possess wealth of about £1tn. The richest 10% control wealth of about £4tn. To put these figures in perspective, Britain’s total GDP is £1.45tn.
Consider first that minuscule group in the stratosphere at the top, Britain’s thousand richest. In 1997 they held assets of £99bn, but they took full advantage of New Labour’s being “intensely relaxed about people becoming filthy rich” to nearly quadruple this to £336bn by 2010. That process of gargantuan enrichment now means that in order to get access to this exclusive club, one needs personally to command assets of at least £450m to get into the top 200, £750m to get into the richest 100, and no less than £1.4bn to break into the top 50.
It’s not only that the very rich have colossal wealth, they also overwhelmingly monopolise it. The richest 1% of the population own a quarter of total UK wealth, and the richest half control no less than 94% of total wealth. Ownership of land is even more skewed: 69% of it is owned by 0.3% of the population.
What, then, should be done? In the short term, the most feasible approach is to impose a capital gains tax charge at the current rate of 28% on the topmost layers of wealth, the £155bn gains amassed by the 0.003% over the last three years. That would yield £43bn, more than enough to generate the public investment to create 1.5 million jobs over the next two years. This could then steadily be extended to the remainder of the top 1%, which would provide the funds to widen and deepen the early recovery.
A wealth tax and land value tax, the details of which would have to be carefully drafted, should then follow in the medium term, and would achieve several purposes. They would resuscitate a public sector ravaged by the Tory ideological assault, curtail the grossest excesses of inequality that have disfigured the last three decades, and lay the foundations for an industrial and technological revival without which British living standards cannot be sustained. And all this without burdening the remaining 99% of the population.