“Over 30,000 have already signed my petition calling for fairer taxes on wealth that I will be presenting in Parliament ahead of the Budget”
By Richard Burgon MP
Sharp spikes in energy bills, rising rents and mortgages and soaring food costs have left millions of ordinary people reeling.
Everything it seems is going up in price – except people’s real wages. The last year has been the worst year for real wage growth in nearly half a century.
The latest attack on wages follows a constant pattern – with wages still lower now than they were before the financial crisis in 2008. Wages are not expected to reach their pre-crash levels until 2028, meaning workers in Britain will have faced two lost decades of pay.
This deliberate policy of wage suppression has, for example, left nurses earning around £5,000 a year less in real terms than they did in 2010.
It’s why there is a crisis in recruitment of nurses, teachers and other key workers to our public services.
Workers though have made it clear that enough is enough. Huge numbers of workers have taken a stand against being made to pay once again for a crisis they did not create by voting for strike action to fight for fair pay and better conditions.
On March 15th – the day of the Spring Budget – we will again see a huge day of strike action and I give my solidarity to all the workers taking action that day.
But every time that workers demand fair pay we hear the same old lie from the Tories that the Government simply cannot afford to offer inflation-matching pay rises.
That is false. We need to take this lie head-on and show there is an alternative.
The Tory government is deliberately exaggerating the cost of public sector pay rises to the tune of billions of pounds.
Just before Christmas, I wrote a letter to the Prime Minister exposing his dodgy figures which put the additional cost of inflation-matching pay rises for all public sector workers at £28 billion.
In truth, the cost is around £12bn – less than half of what the Prime Minister claims.
This could easily be afforded with one simple measure: scrapping a key tax advantage to the super-rich which means that income from work is taxed at higher levels than income from wealth.
Take the tax paid on profits when selling assets like a second home – known as Capital Gains Tax. This is paid at a lower rate than people pay on the wages they earn from going out to work for a living day in, day out.
Equalizing the tax rates on Capital Gains Tax with income tax would raise £17 billion per year.
That’s enough to give every public sector worker an inflation-matching pay rise with billions left over.
The wealthiest 1% of people disproportionately don’t make their money through wages. Instead, they rack up their riches through other means, like profits, shares and dividends.
Why should someone trading in assets pay lower tax rates than a bus driver or a postal worker does on their wages?
Scraping the lower rates paid by the rich in Capital Gains Tax would not only help address the pressing issue of stagnant wages for workers in the public sector. It would also address a gross inequality in the way our economy functions, providing a step towards genuine tax justice in Britain.
Now more than ever, we must demand a tax settlement where those with the broadest shoulders really do pay the most.
That’s why I have launched a petition calling on the Government to address this scandal of income from wealth being taxed at lower rates than income from work and to use the money raised to fund a proper pay rise for public sector workers.
Over 30,000 have already signed my petition that I will be presenting in Parliament ahead of the Spring Budget calling for fairer taxes on wealth. You can sign my petition here.
The Spring Budget provides the perfect opportunity for us to step up the demand for the government to tax wealth and give workers a pay rise.
More and more of the wealth in our society is increasingly funnelled into fewer and fewer hands.
The share of the pie going to those who earn a living from working is getting ever smaller while shareholder profits and unearned wealth get ever larger. If workers’ wages had carried on growing at previous levels rather than flatlining since the 2008 financial crash then the average worker would be £9,200 better off per year.
This shift in wealth inequality is not accidental and it’s not a signal that our economy isn’t functioning in the way it’s intended to.
It’s the direct result of a system that is created by the super-rich, for the super-rich. The system is working perfectly for those who designed it.
We need to challenge this rigged system. Ahead of the Budget, let’s make a clear demand: tax wealth – give workers a proper pay rise!
- You can support Richard Burgon’s petition to tax wealth properly and give workers a pay-rise here.
- Richard Burgon is the MP for Leeds East, the Secretary of the Socialist Campaign Group of MPs and a regular contributor to Labour Outlook. You can follow him on Facebook, Twitter and Instagram.
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