UK : Inequality Think Tank calls on upcoming Government to remove Stumbling Blocks, fulfill Recommendations
- Vineet Malik
- Jul 2, 2024
- 8 min read
By Vineet Malik | July 2, 2024 | London, England
With the 2024 United Kingdom (UK) General Election slated for coming Thursday, an upsurge of hope in people after witnessing a turmoil in British politics since last few years is highly evident.
The Equality Trust – London based, Social Inequality Policy Think Tank that campaigns against economic and social inequality calls on the next Government to fulfill its recommendations. The initiative reflects the need to build a social movement for change in larger public interest.
The Recommendations
Tackle Progressive Wealth Taxation
Introduce a permanent wealth tax: Permanent and progressive wealth taxes must play a strong role in raising the tax base to fund the cost of public services, redistribute wealth, and stabilise economies through reducing inequality. In the UK, the effective tax rate of the richest 0.01% is less than half the rate paid by the bottom 10% of workers. Annual wealth taxes must start at around 2% on millionaires, and 5% on billionaires. Although governments might baulk at the suggestion, there is overwhelming support from the UK public to tax the rich, with 72% in favour. Alongside this, taxes on income derived from wealth (such as capital gains tax) must be equalised with the taxes on income derived from working.
Allocate additional funding to HMRC: There is a significant gap between the taxes owed and the taxes collected, which undermines the government’s ability to deliver essential services. Better resources would enable HMRC to improve compliance rates, reducing the tax gap and ensuring a fairer tax system. It is estimated that every pound invested in HMRC’s resources would yield a return of £18.
Increase the inheritance tax base: Inheritances are expected to grow in the future. A new class of billionaires is now being created who have made more wealth from transfers than from business. Steeply progressive tax on wealth transfers including inheritance, gift, land and property taxes will play a strong role in reducing wealth concentration. Currently, only 0.7% of the tax base in the UK is from inheritance. If that number was increased to 1%, the UK government could potentially generate an additional £3.1 billion to fund public services.
Close global tax havens and loopholes: Offshore wealth is heavily concentrated among the richest individuals, significantly boosting their wealth share and increasing overall inequality. The shortfall in tax revenue results in higher taxes for wage-earners and small businesses, furthering inequality. International agreements to close tax havens and loopholes must be made through the establishment of a UN tax convention. This would include tightening regulations on transfer pricing, profit shifting, and the use of shell companies.
Rapidly Shifting Away From Polluting Industries
Taxing Investments on Pollution: Wealthy individuals and institutions continue to hold significant investments in fossil fuel companies and other emissions-intensive sectors, perpetuating the extraction and use of polluting resources. A wealth tax rate on polluting investments should be set to create a powerful financial disincentive for such investments, compelling investors to shift their capital towards sustainable alternatives. To ensure the tax encourages equitable contributions from all citizens, it should be narrowly targeted at wealthy individuals and institutions above a high net worth threshold (e.g., $5 million or more in investable assets).
Immediate cessation of new fossil fuel licences, subsidies, and permits: Wealthy, industrialised nations have historically contributed the most to global greenhouse gas emissions and continue to have a significant impact on climate change. These countries are responsible for and possess the financial and technological capacity to lead the transition to a low-carbon economy. Wealthy countries must halt the issuance of new licences and permits for coal, oil, and gas exploration, extraction, and processing. This includes stopping any planned expansions of existing fossil fuel infrastructure.
Reduce Excessive And Carbon-Intensive Consumption And Production
Promote a circular economy business model: Governments must expand appliances and enforce stronger penalties against planned obsolescence using the 2021 Right to Repair law. Repairing products rather than replacing them reduces the demand for new products and encourages a culture of responsible consumption, in turn lowering the carbon emissions associated with manufacturing and transportation.
Implement luxury advertising taxes: Although not yet tried, the merits of a consumption tax – calculated on the basis of personal income minus savings – to restrain consumption should be considered. Unlike value-added and sales taxes, such a tax could be made very progressive. Bans on advertising tobacco, alcohol, gambling and prescription drugs are common internationally, and taxes to restrict advertising for high-carbon luxury goods and services would help to reduce consumption.
Higher taxation on luxury carbon-intensive goods and services: Establish higher tax rates for luxury goods and services based on their carbon intensity. This includes setting specific rates for items such as SUVs. Outright bans should be considered on the most egregiously carbon-intensive activities, such as private jets, yachts, and space tourism, which have limited societal benefits and significant environmental costs.
Enable A Just Transition And A Wellbeing Economy
Put wellbeing at the heart of our economy: Shift the national measure of success away from the pursuit of unsustainable economic growth and crude GDP metrics and focus instead on providing a high quality of life for all within ecological limits. The measure should be replaced with a broader suite of indicators that capture multidimensional wellbeing, including health, education, inequality, environmental quality, and subjective wellbeing.
Inclusive participatory governance: Adopt a co-production approach where communities are involved in agenda-setting, participatory budgeting, implementation, and monitoring of climate policies. Ensure the inclusion of youth, trade unions, feminist organisations, racial justice organisations, people from different classes, people with disabilities, and other marginalised groups in the development of these policies to ensure inequalities do not widen.
Adoption of the Socio-economic Duty (SED): The SED, as outlined in Section 1 of the Equality Act 2010, is a tool designed to reduce inequalities resulting from socioeconomic disadvantage. Despite its potential, this duty has not been enacted in England, although it has been successfully implemented in Scotland and Wales. All public bodies should be required to conduct Socioeconomic Impact Assessments as part of their decision-making processes. These assessments should evaluate how proposed policies, programmes, and projects will affect socioeconomic inequalities. To ensure compliance and effective implementation of the SED, a dedicated body such as the Equality Hub or the EHRC should oversee the process.
Deliver Universal Basic Services
Nationalise and invest in free basic public services: Entitlement to public services must be guaranteed based on need, not ability to pay, so people are able to participate fully in society. Governments must build on current public healthcare and education systems to improve quality and access. This model should be extended to guarantee universal access to a range of other essential public services, including public transport, water, energy, education, health, connectivity, and housing.
Stop and reverse privatisation of the NHS: Reinforce the NHS as a publicly funded and publicly provided service, free at the point of use for all residents. This includes reversing policies and laws that have facilitated the outsourcing of services to private providers, such as Health and Social Care Act 2012, as well as introducing new laws that protect the NHS from further privatisation and ensure it remains a publicly accountable service.
Co-production mechanisms: Create mechanisms and closed feedback loops for communities to actively participate in identifying needs, designing services on how best to meet them, and overseeing their delivery through co-production processes.
End The Corporate Capture
Mandatory disclosure of lobbying: Implement a comprehensive and mandatory lobbying disclosure system that requires all lobbyists to register and report their activities, including including the entities they represent, the issues they are lobbying on, and the public officials they contact. Require policymakers to disclose all meetings and potential conflicts with representatives from sectors significantly impacted by public policy, such as the fossil fuel or real estate industry. This includes disclosing the purpose and outcomes of these meetings, and any personal investments in those industries.
Invest in public governance: Invest in public services run by public servants, moving administration and delivery out of the private sector and into democratic control. Ensure that these are able to run as long-term institutions, with the resources and protections from interference needed to deliver effective services and deliver the policies called for in this manifesto without over-reliance on consultants.
Fairer and proportional systems of voting: Implement a proportional voting of system for the House of Commons and regional and local elections, ensuring that votes have equal weight no matter where they are cast and that political beliefs are fairly represented.
Restore lower donation disclosure threshold: Repeal the 2023 statutory instrument that raised the threshold for declaring donations to political parties from £7,500 to £11,180. Reinstate the previous requirement for political parties to disclose all donations above £7,500 to the Electoral Commission for public scrutiny.
Reduce campaign spending limits: The same statutory instrument increased the national election spending cap by 80%, from £19.5m to about £35m. The overall spending limits for political parties during election campaigns should be lowered by at least 15% to address concerns about the escalating costs of campaigning and the potential for undue influence.
Empower independent regulators: Regulators like the Electoral Commission, the Competition and Markets Authority, Ofwat and others should be empowered and given more independence from political whims, allowing them to take real action against trusts, monopolies, and oligopolies, and stand up to political malpractice.
Promote Thriving Public Spaces
Invest in and diversify Third Spaces: Support a wide range of Third Spaces, including public libraries, community gardens, and placemaking workshops to preserve and uphold public areas, and encourage interclass mixing and social connection. Enact policies that support the development and sustainability of Third Spaces, including tax incentives for organisations that provide community-oriented spaces and funding for public Third Spaces.
Access to public nature: Ensure universal access to green and blue spaces, including expanding the Right to Roam, the creation of new national parks, and ensuring access to local blue and green spaces, owned and managed by the public. As well as improving quality of life, this will improve health and mental health for many, particularly those living the most deprived areas.
Access To Transformative Justice
Move towards a rehabilitative justice system: Invest in training and capacity building for community members, social workers, and justice practitioners to effectively implement and manage restorative and transformative justice programs. Develop and expand diversion programs that provide alternatives to incarceration, such as drug treatment programs, mental health programs, and community service orders.
Remove barriers to justice: Create a system of legal aid that gives all people access to justice at all levels. Remove financial barriers to legal recourse, such as court and tribunal fees, and simplify the overly-complex system of tribunals. End the racial disparities in the justice system which have led to much worse outcomes for many ethnic minorities, including Gypsy, Roma, and Traveller communities.
Implement a National Oversight Mechanism: Implement a body similar to that called for by Inquest which would exist on a permanent basis to ensure that government failings can’t be swept under the rug or forgotten about. This would follow up on inquiries and inquests, such as the infected blood scandal, Grenfell, Covid, or Horizon and the Post Office. The NOM would check whether recommendations had been implemented, report on the responses from public bodies, and monitor progress.
The Revelation would like to add another recommendation on behalf of more than 11 million private renters and 2.3 million landlords in England.
Enact The Renters Reform Bill
The unending timeline of the Renters Reform Bill spans from 2019 when it was originally proposed in the Parliament however till date the law is still hanging in the air.
Repeated false promises made by the successive Governments over the years has only undermined the confidence of people.
To win the trust back of one and all, the upcoming Government should make an urgent declaration to enact the Renters Reform Bill on priority.
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