8 - Who Has the Deepest Pockets?

Summary

With the chancellor apparently committed to a future balancing of the books, this chapter looks at what this means for future fiscal policy. It details the pressing future spending needs as we build back from the pandemic, address the much discussed ‘levelling up’ of our country and face up finally to the costs of an ageing population. It shows that there is a clear appetite for spending more on public investment and services, even if this means higher taxation. This has been apparent in survey data for decades, although receives precious little media coverage. While tax rises are not appropriate during the COVID-19 recovery phase, there nevertheless needs to be a conversation about how to support a future more active public sphere. Measures already announced to freeze public sector pay and increase income tax thresholds affect ordinary workers. The case is put that there should instead be a radically revised approach to wealth taxation, addressing anomalies in how capital gains and income are taxed and tapping into the enormous rise in household wealth during the neoliberal years, now widely seen as unfair. Newly published research shows this can raise money just as effectively as increases in income tax or VAT.