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How To the Eliminate UK Debt In One Parliament

The UK, according the World Bank is the sixth richest nation on Earth in terms of public and privatley held assets. I was reflecting on this fact when something extraordinary appeared on the BBC news website;

“Britain’s super-rich roared back in the past year, with the number of billionaires rising from 43 to 53 and the total wealth of the top 1,000 increasing by a third, according to the Sunday Times annual Rich List.

The increase in wealth is “easily the biggest annual rise in the 22 years of the Rich List,” Times journalist Philip Beresford wrote, even as the country struggled to claw its way out of recession.”

Incredible. This means that Cameron and Clegg’s mantra of, “We are all in this together” really does prove that satire is alive and well in the UK.

Just to add to the fun did you know that foreign billionaires can reclaim the VAT on goods they have bought here? No really it’s true.

I am a big believer in everyone paying their way and I am sick to the back teeth of reading about companies such as Vodaphone getting away with £6 billion in unpaid tax, and Barclays Bank only paying 2% on their obscene profits which resulted from us bailing out the system that facillitates their activities.

Labour needs to be absolutley clear that our policy from now on will be realistic and strict on the Banks. That way everyone knows where they stand and can move forward to repair the damage done to the financial system. Most Bankers are reasonable people and understand the need for a socially responsible financial system. The problem was that we gave them the keys to the drinks cabinet and, let’s face it most of us would have a swig if we knew there would be no consequences and when everyone is doing it, it becomes the norm. But the party is over and we need to clear up the mess.

There is a school of thought that decries regulation and fair taxation of the financial sector saying that they will leave the UK if they feel that they are being squeezed. Since Alastair Darling closed various loopholes to a deafening silence from the Tories, only SIX, yes six companies that employ over twenty staff left the UK as a result.

Now, what plans can we adopt to straigten out the economy of the UK and eliminate the £400 million a day we are spending to service the structural debt? Just to be clear I am not talking about the £120 billion deficit as actually it’s pretty irrelevent. It equates to a household that earns £1000 a month being £111 overdrawn at the end of the month. A concern but no biggie. What the ConDems like to do is mix up the structural debt issue (the £400m a day) with the deficit, when the two are separate matters. So when you hear Osborne banging on and chucking enormous figures around he is being totally disingenuous. 

The first way to raise some cash is to make landowners pay their way. The rest of us do. It’s called Council Tax. We pay £10 billion a year whilst the richest landowners actually make money from their land via tax breaks and subsidies. Examples: the Duke of Westminster, that renown pauper, received £799,000 over 2 years from the Treasury in subsidies. The Prince of Wales has an institutional estate – the Duchy of Cornwall – of 141,000 acres; this includes freehold on much of Kensington area of London worth an estimated £500 million. Not one penny is paid in tax on these assets. Not on.

Other nations tax assets. Why don’t we?


This explains how it works in France. Assests are effectivley dead money so by taxing them we are freeing up redundant real money and seeing it work for the good of all.

Now to the nitty gritty. The richest 10% UK residents own £4,000bn, with an average per household of £4m. The bottom half of our society own just 9%. The wealthiest hold the bulk of their money in property or pensions, and some in financial assets and objects such antiques and paintings.

A one-off  tax of just 20% on the wealth of this group would pay off the national debt and dramatically reduce the deficit, since interest payments on the debt are a large part of government spending. So that is what should be done. Simple and obvious. This tax of 20%, graduated so the very richest paid the most, would raise £800bn according to respected economist Prof. Danny Blanchflower. A major positive for this scheme is that the tax would not have to be immediately paid. The richest 10% have only to assume liability for their small part of the debt. They can pay a low rate of interest on it and if they wish make it a charge on their property when they die. It would be akin to a student loan for the rich.

A YouGov poll of over 2,000 people was conducted in August 2010 to test attitudes. There was very strong support, with 74% of the population approving (44% strongly approving). Only 10% did not approve. Significantly those having the highest incomes were slightly more supportive than the lower income groups. The strongest support came from those over the age of 55, with 77% in favour (47% strongly), again a group with most to lose.

There are strong economic arguments for this tax. A key problem for the British economy is that much of the nation’s resources have been directed into inflated property values, which is where many of the bonuses ended up. This is in effect dead money but the tax would have the effect of re-circulating it as government spending, which could stimulate growth. The deficit would thus be further reduced as the unemployment resulting from the proposed cuts would be avoided – thus no increase in unemployment pay and no loss in tax revenue from the unemployed. This proposal offers a real alternative, to move debt off the government’s books, using money that is largely trapped in the housing market, from people who will not miss it.

Clegg loves a good referendum. So instead of wasting everyone’s time and money with the pointles AV fiasco, why not put a Rich Tax question to the voters? It’s such a fundamental issue and could have a massive impact on the way we do things going forward that it does warrant being put to people.

I realise that evasion is going to be a problem but surely we have the wherewithall to deal with that issue? In the end initial expense would be outweighed by the benefits.

Finally wouldn’t it be nice to see the trickle-down so ardently promoted by those with belief in the free market, turn into a deluge? Not that they ever meant that sentiment in the first place.


About dermotrathbone

Writer and co author "Through Red Lenses". Activist Unite the Union, Save Our NHS Hull. Fan of Yorkshire County Cricket Club, Hull FC, Munster and Ireland Rugby. Views are mine alone and may not reflect the organisations concerned.


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