I was on the Today programme this morning discussing the new Compass report on the need for a fairer tax system for the UK. You can hear it here for the next seven days — start at 2 hours 55 minutes — just move the slider to very near the end of the programme.
I was opposed by Michael Fallon MP — the Tory who wants to chair the Treasury Select Committee if they win the next election. And what did he have to say? That if the tax changes we propose came in the rich would flee and we’d all suffer as a consequence.
Remember the context in which he said this: I’d made clear, and he knew, that our proposals are to make 90% of British households better off after tax, and 10% — the richest, worse off.
And now let’s unpack what he really meant. First he was saying that these people should be paying proportionately less tax because in cash terms they already pay more. This is a wholly spurious argument not far removed from promoting a poll tax. Second, he clearly implied as a result that they should pay less because they are worth more to the UK economy. This is, I think clear indication of what the Tories think of most who live in the UK. Third, he has such regard for this group that he thinks they can, will and should hold the country to ransom to advance their own self-interest. In what low regard he holds those who earn higher incomes — or maybe he knows them too well. Either way, it’s a damning indictment of him, those he knows, or both.
As an argument it really is a very poor one. It gets worse. The only place where most people have a right to go is the EU. 10% of the UK is not going to the EU. they tax more, at least in those places where there is work to be had. Latvia is few people's destination of choice right now. And Sir Michael really ought to face a reality: there aren’t high paid jobs for millions of British people in the EU for one very good reason. They might be able to speak English and come here with ease but it’s a sad fact that the vast majority of us can do little better than read a menu, ask directions and hold a very basic conversation in one, at most, other EU language — the most likely being French where tax is not an incentive to move.
So the reality is Michael Fallon’s argument does not stack at any level at all.
And there’s good reason for that: there is no good argument against tax justice.
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As a co-author of the report I’m pleased to say I think you did really well Richard.
Michael Fallon’s performance shows that the Conservatives in their current incarnation are just a front for the interests of a small minority of very wealthy and very highly paid people. Despite the fact that a key subset of this group – the bankers – damn near wrecked the UK economy only a year ago. This shows just how out of touch with reality the Tories are – and if Labour can just get its act together a bit more, Cameron and Osborne are woefully vulnerable on economic policy.
“First he was saying that these people should be paying proportionately less tax because in cash terms they already pay more.”
Um, no they don’t. At least not with the 50% marginal tax rate. Leaving aside lawyers and accountants who probably can’t move out of the UK and earn the same money overseas, many of the other highest “earners” are either self-employed or paid out of large bonuses. They shouldn’t have too much trouble moving offshore just like in the 1970’s.
“They shouldn’t have too much trouble moving offshore just like in the 1970’s.”
Great! I’ll give them a lift to the airport if they need it!
Brain drain is a cack argument by the way (particularly in relation to the UK) and symptomatic of the desperation of the Right as they continue to lose the argument.