View all newsletters
Have the short, sharp Spear's newsletter delivered to your inbox each week
  1. Wealth
October 8, 2012

Why Osborne's Pledge for More Taxes on the Wealthy Lacked Both Detail and Conviction

By Spear's

Public sentiment and coalition politics required some degree of anti-rich rhetoric, but at root, Osborne’s speech showed a desire to move away from the rich/poor divide and onto the division between ’working people’ and the rest.

Chancellor George Osborne today promised ‘new taxes on the rich in the years ahead,’ pledging that the ‘rich need to contribute more’ — but when it came to the detail, he was suddenly coy.

It won’t be a return to the 50p tax rate, which he described at the Conservative Party Conference as ‘cripplingly uncompetitive’ and a tax that ‘raised no money and cost jobs.’ The desire to increase the top tax rate was based on a ‘phoney conception of fairness,’ because ‘the people who pay the price for that [taxes on the wealthy that reduce growth] are not the rich but the poor looking for work,’ he continued.

Nor will the rich be hit by a temporary wealth tax, or a mansion tax, as the Lib Dems have proposed, he added.

‘If there are other ways to increase revenue from the very top without damaging the enterprise economy, we will look for them,’ Osborne said. It’s hardly a battle cry — from Osborne’s economic perspective, and given his criticism of the 50p tax rate, that’s a very big if.

In fact, his main proposal regarding the rich is not new taxes but a clamp down on tax avoidance: ‘When it comes to the richest, the first place I will look is to those who are still not paying the taxes we expect them to pay today,’ he argued.

Public sentiment and coalition politics required some degree of anti-rich rhetoric: during his speech and several interviews today, Osborne boasted that each one of his budgets has increased taxes overall on the very richest, and that the rich pay a far greater share of tax revenues today than they did under Labour. At root, however, Osborne showed a desire to move away from the rich/poor divide and onto the division between ‘working people’ and the rest.

‘Our country’s problem is not that working people pay too little tax,’ Osborne said at one point— and note how he’s replaced ‘rich’ with ‘working people’, as if anyone in Britain today has been arguing for higher taxes on the working squeezed middle.

Content from our partners
How Flygreen is ascending into the future of private aviation
Stoneweg, Icona, and CBH Strengthen Partnership with Cromwell Acquisition, Adding €4 Billion AUM to Stoneweg
Why investors should consider investing in nature

The real subjects for public loathing, he signalled through his speech, should not be the rich, but benefit scroungers. ‘Where is the fairness, we ask, for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next door neighbour sleeping off a life on benefits?’ he asked the conference at Birmingham. It’s a powerful anecdote, and Osborne knows it — he had already used the story on the Today programme earlier on today.

The wealthy should feel fairly confident that they will not suddenly be hammered by new taxes, for all Osborne’s posturing. Some may however feel unease at the venom the Chancellor is directing towards those on benefits.

After all, just as not every wealthy person is a greedy, ruthless tax dodger, not everyone dependent on benefits is a lazy scrounger — something that Osborne’s speech in no way made clear. And the £10 billion extra welfare cuts announced today will be very, very painful indeed. 
Read more by Sophie McBain

Don’t miss out on the best of Spear’s articles – sign up to the Spear’s weekly newsletter


Select and enter your email address The short, sharp email newsletter from Spear’s
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network