How this wealth tax can fund levelling up – Jon Trickett

LAST week Rishi Sunak delivered his third Budget in 18 months. Once again he talked about ‘levelling up’ and, once again, the proposals fail to match the rhetoric.

Should Rishi Sunak introduce a wealth tax to fund levelling up?

The Conservative government promised the North additional funding; more skills training; and increased spending on infrastructure.

Their claims have rightly been met with scepticism. The money is not enough; the skills training won’t work if the jobs don’t exist; and the infrastructure is too little too late.

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Jon Trickett is Labour MP for Hemsworth.

Unfortunately, there is much that is not right. This month the Lancet reported on the changes in life expectancy here. In poorer communities – of which there are too many in our region – the average length of life is falling for the first time in a century.

On the average, the life expectancy of boys born in Leeds is seven years less than those who are born in Westminster.

And – what is perhaps worse – during their shorter lives men in the most deprived areas will on the average spend almost 22 years of poor health compared to 12 years for those who live in the least deprived areas.

Yet the roots of the problems facing the North are not difficult to find. It lies in decades of economic neglect. Let’s recall that the North of England was the centre of the greatest transformation of economic activity world wide: the Industrial Revolution. We have proved that we know how to work hard, our engineers are among the best in the world, and our universities are centres of excellence.

Should Rishi Sunak introduce a wealth tax to fund levelling up?

But when the country’s leaders decided to focus our economy on financial services in the City of London, they equally signalled the end of much of the industry which had been nurtured in our region. It’s not just during the agonising months of Covid when investment was cut back in our area. This has been happening for decades.

Under-investment leads to low productivity and that in turn leads to low wages. This is the reason why average household incomes are so low here. The average wage in London is £716 per week. In Yorkshire and the Humber, it is £568 per week. And in my area it is £70 per week less than that!

The situation across the country, but especially in our region, is a scandal. We have the worst regional inequality of any country in the EU.

The truth is that wealth is being sucked out of the North and going into the pockets of a few thousand extremely wealthy individuals and big corporations. The Conservatives’ plans completely fail to address the scale of the problem. Much bolder action is needed.

This is why I have proposed a national debate about a wealth tax. In our country we tax the income which you earn at work, but we don’t tax the annual increases in wealth of the 
richest. This is a mistake. It is wrong that the richest 
250 people added £106bn 
largely untaxed to their wealth during the pandemic when millions were suffering on furlough.

My proposal is simple. First the North and other areas that have been ‘held back’ would be the subject of immediate and major investment of the 
scale that happened after the Second World War with the Marshall plan. And the funding should come from relatively modest tax increases on the scandalous levels of wealth at the top.

To those who say that this is too radical, my response is that such action is both morally right and economically the correct thing to do. Because if we were 
to end the gross regional inequality which exists in Britain today, the whole country would benefit.

The ONS have indicated that if we invest in all the regions of the UK so that output per hour worked was equalised then the economy as a whole would benefit by £220bn per year. Yorkshire, for example, would produce an additional £33bn per year.

Our country is one of the most centralised in Europe. Whilst so much power lies in London, I am not convinced we will ever remove the unacceptable inequalities which we can see in the North. This is why I have long argued for One Yorkshire.

Nothing less is required than a major transformative drive to correct the way our region has been neglected in the decades since we de-industrialised. The goal is a noble one: a dynamic economy capable of helping to save the planet, which delivers reasonable prosperity for all working people.

This is the path to a less 
angry country knowing that it would be founded on the 
natural British instinct for social justice.

Jon Trickett is Labour MP for Hemsworth.

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