A LABOUR wealth tax can tackle growing regional inequalities on course to leave northerners on average £210,000 worse off than someone in the south-east of England by 2030, researchers say.
The analysis by the Institute for Public Policy Research (IPPR) comes after PM Sir Keir Starmer vowed those with “the broadest shoulders” should bear the brunt of tax rises in the autumn Budget.
In a report published today, the think tank urged Labour to end Britain’s “wealth inequality spiral” by reforming a Tory tax system “that poses a significant barrier to ending regional wealth inequality.”
IPPR North Senior Research Fellow Marcus Johns said: “The evidence shows that 60 per cent of all private wealth in the UK is inherited rather than accumulated through work.
“That means people who inherit very little, or nothing, face an uphill task to build the wealth needed for a comfortable lifestyle.
“We need to level the playing field on tax to reflect the value we place as a society on work and productive wealth creation as opposed to wealth extraction.”
The think tank warned that regional wealth gaps are growing.
It recommended that ministers rebalance the country by taxing income from wealth at the same rate as income tax, including equalising capital gains tax with income tax as a first step.
IPPR associate director for economic policy Dr George Dibb added: “At the moment our tax system is driving regional inequalities.”
Unite union leader Sharon Graham has ramped up pressure on Labour to introduce a wealth tax this week, pointing out that a 1 per cent tax on the top 1 per cent’s wealth would immediately fill the “black hole” in finances the government cites as a reason to cut spending.
Positive Money campaign group’s co-executive director Fran Boait said Labour must not repeat the Tories’ failures to offer sufficient targeted support for those struggling with the cost of living.
“Taxing income from wealth at the same rate as income from tax would have the dual benefits of reducing regional inequalities — because those in the south hold much more wealth — and of meeting the Prime Minister’s promise this week that those with the ‘broadest shoulders’ would bear a heavier burden,” she said.
