Do you realise that if the Government tax take from economic growth as officially forecast over the next five years were added to the gains made by the richest 1,000 persons in the United Kingdom over the past year, the entire budget deficit could be paid off without a single public expenditure cut having to be made?
The former total comes from Office for Budget Responsibility forecasts and the latter from the Sunday Times Rich List published recently.
These 1,000 people, just 0.002 per cent of the population, all have wealth in excess of £70 million. Some have 100 times as much – there are 73 billionaires in the list. Over the past 13 years, their collective wealth has ballooned fourfold from £99 billion in 1997 to £396 billion now.
Therefore the increase in their wealth over this period is just under £300 billion. That is a massive explosion of wealth for each one of them, on the average of £300 million.
So what happened to these people after the crash in 2008-09 when a hard dose of austerity kicked in for 95 per cent or more of the population?
In 2009-10, the wealth of the ultra-rich soared by £77 billion. In 2010-11, it continued to rise by a further £60 billion. This does not suggest that we are all in it together.
What should be done? Clearly the most urgent requirement is for a wealth tax, starting at perhaps 1 per cent of total assessed British-sourced wealth.
Second, there should be a crackdown on the use of offshoring to escape tax. Wealth created in this country should be taxed in this country whether or not the company is registered offshore. Tax havens should be closed down (half of them are UK dependent territories).
Third, a financial activities tax should be introduced, and the non-dom loophole closed.
Fourth, capital gains tax should be doubled above a high threshold from 28 per cent to 50 per cent, while a land value tax introduced at progressive rates on the largest and most expensive holdings.
That’s the wealth bit. What about the income and bonuses of the top 1 per cent? According to the High Pay Commission, the average salary of a FTSE chief executive in 2010 was, almost unbelievably, £72,057 a week, or £3.75 million a year, compared to the average gross wage of £496 a week.
That means top pay is 145 times higher than average pay and no less than 324 times higher than the minimum wage.
Again, what should be done? Top pay could be fixed to publicly agreed criteria of company performance. Shareholders could have a mandatory say on senior pay and bonuses.
There could be a Government commission to evaluate relative merit and lay down guidelines.
And what about setting up an enterprise council, containing representatives of all the main grades of employees, empowered to open up the company’s accounts each year and, in the light of this, negotiate the incomes of each of the main grades, top to bottom, for the next year?
Michael Meacher is Labour MP for Oldham West and Royton
