Wealth, welfare, and wages

By Bernadette Meaden
April 12, 2015

The reason many people give for not voting is "they’re all the same" and "it won’t make any difference". Fortunately for our democracy, as the election campaign progresses this seems increasingly untrue, particularly, this weekend, in the area of taxation.

The Conservatives are pushing the idea of a cut to Inheritance Tax and a ‘property owning democracy’, whilst Labour is promising to clamp down on tax avoiders and ‘non-doms’. The Green Party has said it would put up the top rate of income tax to sixty per cent and introduce a wealth tax.

Against this background, Citizens UK today (12 April) revealed the level of subsidy taxpayers pay to big business, in the form of in-work benefits to their low-paid staff. The figures were startling, with Citizens UK saying "in the case of some of the UK’s largest retailers, businesses are benefiting more from the Treasury in wage top-ups than they are paying in tax." They calculated, for instance, that each low paid worker at Next costs the taxpayer approximately £2,087 in benefits.

Only last month, the Chairman of Next, Conservative peer Lord Wolfson, criticised his staff who were calling for a Living Wage, saying that the £6.70 an hour he pays them was "enough to live on" failing to acknowledge the contribution taxpayers make to their basic living costs. Lord Wolfson, who succeeded his father as Chairman of Next, has a personal fortune of £112 million and is paid over £4 million per year.

The Conservatives will make family homes worth up to £1 million exempt from Inheritance Tax. This, said George Osborne, "supports the basic human instinct to provide for your children". David Cameron said it would give families across Britain more security, although it does in fact only benefit the wealthiest ten per cent.

The £1 billion cost of this Inheritance Tax cut, combined with the £11 billion paid to top up low wages, comes to £12 billion. Coincidentally, this is exactly the amount the Conservatives plan to cut from the social security budget if they are elected. Whilst they have not said exactly where the cuts will be made, it is thought that disabled people, carers and those living in poverty will be hit again.

Any party which wants to reduce the social security budget in a fair way can do so by addressing the problems which drive the need for benefits. It could, for instance, make a manifesto commitment to the Living Wage. If a future government said it would award contracts to Living Wage employers only, that would help drive wages up, instead of the current system of subsidising low paid workers which drives wages down.

Just as the way we choose to spend our money says a lot about our priorities, so a party’s tax and spending policies perhaps tell us more about their values than anything else. As policy pledges emerge in these areas it is becoming clearer just whose interests the parties seek to represent, and which people they value most highly. It is perhaps becoming easier to #votebelief.

* More on the issues in the 2015 General Election from Ekklesia: http://www.ekklesia.co.uk/generalelection2015


© Bernadette Meaden has written about political, religious and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is an Ekklesia associate and regular contributor. You can follow her on Twitter: @BernaMeaden

Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.