‘Raising taxes on the wealthy isn’t just about the money’

Labour came to power promising to reduce child poverty, as the Blair government once did; to “unleash investment” and create 650,000 jobs in future industries; and to deliver a “New Deal for Working People.” Yet, fifteen months on, those ambitions seem far from being realised. The government’s ‘austerity-light’ policies risk leaving more children in poverty by the time Labour leaves office than when it arrived.

The irony is that, with such a commanding majority, this government could take bold action to revitalise our economy and society. Instead, it has trapped itself in a cycle where high taxes on working people are stifling growth, deepening the cost-of-living crisis, allowing space for the far-right to encroach, and undermining public confidence in governments and politicians of all colours.

Extreme wealth captures and holds too much of our economic output

Whatever your preferred school of economic thought, the facts are clear – there isn’t enough money in the tax we pay to fund essential services, let alone the investment our country desperately needs. Governments can tax, they can borrow, and they can create new money. And from these options they have to deliver what people want and might reasonably expect in terms of public services now, and in terms of investment to make our country prosper in the longer term and be better for future generations.

READ MORE: ‘Britain’s wealth gap is growing – the Chancellor must address it’

The effects of the current situation are stark. One in three children grow up in poverty, condemning many to lifelong disadvantage, poor health, reduced job prospects, and shorter lives;  this not only damages individuals but weakens our economic future. The NHS is struggling, leaving us with an ailing workforce that can’t support economic renewal. Productivity is falling, but this is a symptom not a cause. Tinkering with benefits and squeezing working families harder will not fix the problem. Radical action is needed to free the economy from the stagnation that began after the global financial crash.

Of course the UK is a rich country, even though we’ve been falling down the international rankings in recent times. We’re not short of wealth and assets — but over the years too much of this has been extracted from the active economy and become concentrated and stagnated in the hands a the top 1%. It’s time to call some of this back and put it to good use in the renewal this country desperately needs.

At Patriotic Millionaires UK, we argue for a 2% annual wealth tax on assets above £10 million, which could raise around £24 billion a year without meaningful hardship for anyone. Similar reforms to capital gains and inheritance tax could raise more, providing the investment we need in people and infrastructure.

Extreme wealth creates division in society

But it’s not just about the money. It’s impossible to ignore the fact that our social fabric is fraying. Surveys show widespread distrust in politics and growing resentment at a system that always seems to have worked for the wealthy but not for ordinary people. For decades, by-elections have been dismissed as “just protest votes”, which conveniently allow us to ignore the very clear messages from voters that politics is failing them — that government policies don’t deliver the fairness or opportunity that are at the heart of British values.

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For a party elected to “help working people” this failure is not just political but moral. It widens divisions between those who struggle and those who prosper effortlessly. The disillusionment is fuelling the rise of parties like Reform, which feed on anger and alienation.

When times are hard we know the country will pull together – we did it during COVID. But why should the poorest be told to tighten their belts while the super-rich accumulate ever more? A tax on extreme wealth isn’t just about raising money; it’s about restoring fairness and showing that the government stands with the many, not the few.

Democracy is under threat from extreme wealth

Perhaps the greatest worry is that we’ve reached a tipping point where money in politics is driving our government to act in particular ways. And this isn’t just money from the UK; it’s also from wealthy meddlers outside the country, such as Elon Musk talking about supporting Reform UK and spreading far-right propaganda on ‘X’.  Political opinion is being shaped by the super-wealthy to drive the kind of society that they want, not one that is best for working people.

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Money shapes politics in increasingly sophisticated ways. Wealthy media owners — often non-domiciled — continue to steer public opinion, while social media has become a playground for paid influencers who manipulate voters for profit, whether to sell products or promote political agendas. At a more personal level, individual contributions are seen to buy influence – maybe by being invited to dinner with your politician of choice, or simply by getting your name and agenda nearer the top of their list.

Time to Do the Right Thing

The government is letting people down by continuing to let the extreme wealthly profit while working people are struggling. Voters chose Labour because they wanted genuine change. If the party fails to deliver it, it betrays not just its supporters but the country it governs. A wealth tax alone won’t solve every problem — but it can raise vital revenue, demonstrate moral leadership, and prove that this government stands for fairness and the common good.

Sometimes, governments just have to do what’s right.

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