On Friday, Kwasi Kwarteng, the chancellor, announced a series of tax cuts and other measures that economists and activists claim will greatly benefit the super-rich at the expense of working people. personal tax Measures include:
Abolition of the additional 45p tax rate on earnings over £150,000. Ax of the cap on bankers’ bonuses. Abolish the planned increase in corporate tax to 25%. Doubling of ‘holiday’ stamp duty on property purchases to £250,000. Allowing the wealthy abroad to shop duty-free anywhere in the UK – not just at airports. Checking the planned increase in national insurance contributions. Tightening benefit rules to make it harder for part-time workers on universal credit.
The combined package of measures announced in the mini-budget means someone earning £1m will earn £55,220 a year, while someone earning £20,000 will be just £157 better off, according to calculations by the Resolution Foundation. Torsten Bell, chief executive of the thinktank, said the policies “are just an amazing, huge tax cut for the wealthiest households”. Bell described the mini-budget as socially divisive and said almost 45% of the £45bn worth of tax cuts “will only go to the richest 5%, who will be £8,560 better off”. “In contrast, just 12% of earnings will go to the poorest half of households, who will be £230 better off on average next year.” There are 3,519 bankers working in the UK earning more than €1m a year (£880,000) according to the European Banking Authority (EBA). That’s more than seven times as many as in Germany, which has the second highest number of €1m-a-year bankers. EBA figures show 27 UK bankers made more than €10m in 2019 (the latest year available). Nicola Sturgeon, Scotland’s first minister, said: “The super rich are laughing all the way to the real bank. While more and more of the rest rely on foodbanks – all thanks to the incompetence and recklessness of this failed UK government.” The super rich are laughing all the way to the real bank (many of whom I suspect will be horrified by the moral bankruptcy of the Tories) while the rest of us who rely on food banks are increasing – all thanks to the incompetence and recklessness of this failed UK government — Nicola Sturgeon (@NicolaSturgeon) September 23, 2022 Paul Johnson, director of the Institute for Fiscal Studies, said the scrapping of the 45p tax rate on incomes above £150,000 was a “surprise” that “helps roughly the top 1%”. Johnson said the combined measures were “the biggest tax cut since 1972.” Alison Garnham, chief executive of the Child Poverty Action Group, described the budget as “a statement for the 1%” and said it was “more bankers’ bonuses than help for hungry children”. “Today was a vital opportunity to provide reassurance and support to those who need it most,” he said. “But instead the government risks colliding with reality and the 4 million children currently living in poverty in the UK will be forced to pay the price.” Frances O’Grady, the TUC’s general secretary, said: “The government has ‘made it easier for City bankers to help themselves – making it harder for workers to win better pay and better conditions.’ Luke Hildyard, the chief executive of the High Pay Centre, a think tank focused on excessive pay, said: “By scrapping the bankers’ bonus cap and cutting taxes on the richest 1% of the population, the government is doubling down on a failed economic strategy. “The richest households in the UK already draw more than the richest in most European countries.” He said that rather than “bend over backwards for people who are already extremely well-off”, the government should focus on “rebalancing income and wealth in favor of low- and middle-income earners”. James Perry, a multi-millionaire and founding member of Patriotic Millionaires, a campaign group calling for higher taxes on the very rich, described Kwarteng’s mini-budget as “an abdication of responsibility for sound financial management”. Perry, who made a fortune from a frozen meal company, said that instead of abolishing the high tax rate Kwarteng should have taxed the rich more. “We have to deal with the phenomenon of extreme wealth, a huge pool of capital held by very few. Policies such as removing the bankers’ bonus cap and capping income tax will do the opposite. “When 70% of the public say it’s time to raise taxes on the extreme wealth to invest in our country – and millionaire investors like me agree – why doesn’t the government do the right and obvious thing and get on with it?”
