Has our attitude to wealth changed with Covid or with Brexit?


Covid brexit.jpgIt seems that we are in for another round of will he won’t he over wealth taxes. He being Rishi Sunak and the taxes in question surrounding business profits, wealth in excess property and the distribution of pension tax relief.

And once again the argument is being couched in terms of an internal discussion within the Conservative party about votes.

Of all the things that needn’t worry the Conservative party right now, it is votes. They have a massive majority and they are dealing with a series of issues resulting from the pandemic, all of which are immediate and some of which are existential.

But there is another good reason for Sunak to ignore the squeals of the backbenchers and that is the votes that won him the election weren’t from the wealthy but from the relatively deprived areas of the country which had traditionally been known as working class. Many of these people will not be working right now and for them , paying more tax on pensions, second homes and business profits will play out well. They quite rightly point to increases in VAT and council tax and the cuts in benefits and social services and are saying “we’re not paying again”.

Because they paid last time and while the pandemic can’t be blamed on corporate greed, there is an underlying resentment that while services have gone down, pay has not gone up and most people feel cheated – even if they don’t know why.

Cheated and you don’t know it!

What is amazing about there being 1.7m people in this country overpaying their pension contributions by 25% is that the only people who understand why are tax specialists.

The traditional spokespeople for those on low earnings – the unions – have been quiet about the net pay anomaly. The Labour party has hardly mentioned it. Ironically it has been those like Ros Altmann, in the House of Lords who have become the champions of fairer taxation for those on low incomes.

The great pension rip-off is the redistribution of tax opportunties from the poor to the well off and if Sunak wants to have a go at pensions he should appeal directly to the voters who got him his job.  They’re the ones who are owed.

Labour, Liberals and Greens are now the parties of the mass affluent.

And this is why there is political capital for the conservative party in pensions. They are not fighting their voters, they are fighting Labour votes. London, where average incomes are noticeably higher than anywhere else in the UK , is Labour’s heartland.

And I have absolutely no time for the whingeing of the homeworking classes. The homeworkers are the lucky ones, they are not having to worry about the end of furlough, they don’t have to ride public transport, they can choose how they organise childcare when the kids go back to school. Financially they have been convenienced by the pandemic with nothing to pay for commuting and with the perks of Government give-aways none of which have been means-tested.

Has our attitude changed to wealth because of COVID

The pandemic may not have changed us as much as we think. I suspect that attitudes to money are strongly ingrained in families and communities and that the fear of losing the tax priviledges around pensions , property and business equity is as strong among the mass affluent as ever.

What has changed is the empowerment of those who don’t have money in the political pecking order. The Conservative party is still run by Wickhamists and Etonians but it can see its power base being in the Brexit loving communities who voted for it last year.

There is an opportunity for Sunak to deliver a radical redistributive solution to the challenge of COVID and I suspect that it will be his confidence in his party’s appeal to low-earners , not the appeal of social justice , that will give him courage.

That said, I have learned not to underestimate the power of the shires and of the funders of the Conservative party. Sunak will need to be a stronger chancellor than any of his recent predecessors to tax the rich, and I include Labour chancellors in that estimation.

COVID may be the excuse, but the political swing occasioned by Brexit is what may drive change.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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