- Report
National Renewal Tax: how a tax on the super-rich will create a fairer, greener UK
Overview
This report proposes a 2.5% National Renewal Tax on wealth above £10m each year for the rest of Labour’s parliamentary term. This could raise significant revenue to help tackle the climate crisis, allow our wildlife to recover and improve people’s lives.
Key facts
- A one-off “National Renewal Tax” of 2.5% on individual wealth above £10m, to be paid annually over the five years of this parliamentary term, could raise between £130bn and £183bn. This tax would be paid by 0.1% of the UK population.
- The National Renewal Tax on the super rich could raise between £26bn and £36.6bn on average each year.
- The £130bn figure above takes into account substantial potential tax avoidance and evasion of up to 42.5% and the costs of administering the tax, based on the Wealth Tax Commission’s estimations. This revenue is equivalent to 1% of GDP and 3.1% of total tax revenues taken in by the UK government each year.
- The £183bn figure assumes a lower degree of 17.5% tax avoidance and evasion based on the Wealth Tax Commission’s estimations. This revenue is equivalent to 1.4% of GDP and 4.4% of total tax revenues taken in by the UK government each year.
- The money raised by the National Renewal Tax would be more than enough to pay for:
- Insulating 19 million poorly insulated homes.
- Supporting the most vulnerable households with energy bills over the winter months, preventing hundreds of avoidable deaths.
- Capping bus fares outside of London at £1.65 and providing free bus travel to everyone under the age of 25.
- Implementing a scrappage scheme for the most polluting vehicles.
- Retraining 3.2 million workers in high carbon sectors for green energy jobs.
- Upgrading Britain’s ports to support supply chain job creation.
- Supporting farmers to clean up our waters and return 30% of land to nature by 2030.
Foreword by Julia Davies, Patriotic Millionaires UK
As a member of Patriotic Millionaires UK, I am proud to invest in Britain and its communities and want to see taxes raised on wealth. I would personally see paying the National Renewal Tax on the super rich proposed in this report as doing my bit in a time of great need for our nation. I want to be proud of the care our elderly people receive, not ashamed. I want our children and young people to have the best chance in life and the best opportunities – not to face greater struggles than my generation faced. I want to see no communities left behind, as so many were when coal mines were shut down suddenly with no transition plan in place.
We know the challenges we face and we know that we need to invest rapidly and at a national scale to help our country take a leap forward into a cleaner, more sustainable, healthier, higher welfare and kinder future. There is no time to keep dragging our feet. A stitch in time saves nine, and unmaintained schools and hospitals crumble and cost more to repair in the long run.
We would all benefit from living in a country with good public services, a future-facing sustainable economy, a well-trained and healthy workforce, and a cared-for natural world.
The fact that pensioners and families are living in damp and draughty homes isn’t just a matter of national shame. It represents bad financial management of our public funds – costing more in the long run by causing ill health and straining precious NHS capacity as our elderly people are unable to return to homes that made them sick in the first place.
We are suffering the consequences of underinvestment in every part of British life. The costs of this rack up by the day, causing us to fall further and further behind countries like China and the US that recognise the need for a rapid, government-led transition both to tackle the climate crisis and be competitive in a fast-changing world.
We need government-led investment now in affordable, accessible public transport for all, in retraining workers for the clean energy jobs of the future, in nature-friendly agriculture that delivers better food security and thriving wildlife, and in making British homes better insulated and less costly to heat.
It simply isn’t true that we can’t afford to make this investment urgently. The truth is that we can’t afford not to.
And it certainly is not true that the money isn’t there. It absolutely is there, and it’s time for this government and the British people to demand that this investment is made by those of us who can afford to make it.
For too long, our country has undertaxed wealth and overstretched those who are working hard and still struggling to feed their families and pay the bills.
For too long, our government has dished out sticking plasters instead of tackling the root causes of fuel poverty, inadequate public transport, disappearing wildlife and an ever-widening gap between the ‘have absolutely shedloads’ and the have nots.
I am fortunate enough to be in a position where I would have to pay this tax if it were introduced. I can tell you that paying it would not impact my lifestyle or how I am able to provide for my family one bit.
We teach our children the importance of fairness and sharing, so it’s about time that we applied these principles to the super-rich.
The super-rich have the money needed to tackle the climate crisis, allow our wildlife to recover and improve people’s lives. But right now, most of them are not only failing to use their wealth to do so – they are actively choosing to put their own amusement and lavish lifestyles above the survival of entire communities and species, with private jet usage and extreme overconsumption on the increase.
With research showing that the super-rich and their lifestyles are fuelling the climate crisis at a much higher rate than ordinary people, it’s only fair that a smidgen of their wealth be contributed in tax to tackle the problems they have made worse.
There is a growing movement of people, including those who would have to pay it, backing this tax.
The very wealthiest in the UK can afford to invest in a country embracing a decade of national renewal and a brighter future for the British people. It’s time to ensure that they do so.