New Wealth Taxes

Beth Winter Excerpts

Tuesday 14th June 2022 Westminster Hall

[Beth Winter (Cynon Valley) (Lab)]

I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this debate, and other colleagues, including my hon. Friend the Member for Hemsworth (Jon Trickett), who have campaigned tirelessly for a wealth tax. The debate is vital and timely, particularly during this cost of living crisis. As others have said, we are one of the richest nations on the planet, yet we have some of the most shocking inequalities. On the one hand, we have City financiers cashing in on above-inflation income rises through bonuses and multinational corporations spending billions paying dividends to shareholders. On the other, the Government are holding down incomes from public sector pay, pensions and social security, and the use of food banks at the moment is astronomical. Over the past decade, public services have been stripped to the bone because the Government claim they cannot afford to pay them.

I have just completed a cost of living survey in my constituency of Cynon Valley. We had a huge response: over 650 people responded, and their stories were harrowing. The levels of anxiety, despair and misery are unbelievable. Some 90% of people said that they felt worse off than they did 12 months ago; 40% said that they would not put the heating on; and 50% said that they would be cutting down on essentials such as food. We have allowed poverty to become normalised, at a time when banks, energy companies and multinationals have more money than they know what to do with.

The reality is that more often than not, those with the capacity to pay a greater amount of tax pay proportionately less than those who are less able. Recent statistics published by the Office for National Statistics show that the top 10% of individuals hold almost 50% of all wealth in the country. Inequality is also geographical: the figures on individual total wealth by region in this country demonstrate an enormous disparity between the wealth in London and the south-east of England, and the levels of poverty in areas such as mine in the country of Wales and in the north of England. In my constituency, before the pandemic, the median weekly wage of a full-time worker was £80 less than that of the typical British worker. Wage rates are such that in 2020, more than a quarter of local residents were estimated to be earning less than the real living wage. These are not people who we can tax more to fund public services, which is why it is unacceptable that income from wealth is taxed less than income from work.

Others have already given examples of respected think-tanks and colleagues in the House who have identified the mass of wealth that could be subject to greater taxation. For example, in 2019, the Institute for Public Policy Research proposed that income from dividends and capital gains be incorporated into the income tax schedule, estimating that those changes could raise up to £120 billion of additional revenue over five years. The report of the Wealth Tax Commission found that a one-off 1% wealth tax on the richest could raise £260 billion in the UK over the next five years.

The Welsh Government have made it clear in their programme for government that they are committed to growing their tax base and developing further effective tax measures to ensure that the interests of local people are protected. They have begun that process by increasing taxation thresholds on second homes in Wales, and are making the case for tax devolution in Wales. This has to include ensuring that the profits from the Crown Estate in Wales go directly to Welsh governments—currently, that is UK tax in Wales, but the Welsh Government should have access to it.

I will finish with a quote from a constituent who responded to the cost of living survey. Behind all the statistics, as we often say on this side of the House, there are real people:

“Life genuinely doesn’t feel like living any more. I feel guilty for bringing my children into this awful mess of the world.”

Is that a society that any of us want to be living in? I do not think so. Shame on us as a society. Shame on this Government. We need to introduce a wealth tax now.