Gary Stevenson is right the rich people want to help Britain – here’s how to let them do it
Gary Stevenson and the ‘Patriotic Millionaires’ plan for a wealth tax is the wrong way to get wealth working for Britain. Here’s three much better ideas, says Nick Finegold
A fortnight ago, 120 millionaires, including Gary Stevenson and Gary Lineker, wrote to Andy Burnham asking to be taxed more. I do not doubt their sincerity. But as someone who has spent a career deploying capital rather than signing letters about it, I think they have reached for the wrong tool.
If wealthy people genuinely want to help Britain – and most of us do – the answer is not a wealth tax that speeds their exit. It is to keep them living, spending and investing here. That is a duller proposition than a grand moral gesture, but it is the one that actually pays for schools and hospitals.
Start with the Prime Minister’s instinct to reject trickle-down economics. I understand the appeal of the phrase, but the numbers are inconvenient. The top 10 per cent of earners already contribute 58.4 per cent of all income tax. That money permeates the economy every day. Is it always enough, or always well spent? No. But to call it a myth is to argue with your own receipts.
Then there is the question of how much is too much. Most people in the productive economy can just about stomach working until May each year for the state. Move that date to July or August and something breaks. The connection between effort, risk and reward dissolves — and when it does, you do not simply lose a slice of revenue. You lose the entrepreneur deciding whether to build here or in Lisbon, and the graduate deciding whether to stay. That is why the effective burden can never drift far above 40 per cent. It is not greed; it is arithmetic and psychology.
Here is where I part company with the usual complaints, because objecting is easy and Britain needs ideas.
Ushering wealth out of the door
First, flip the non-dom logic on its head. Instead of a regime that effectively ushers wealth out of the door, offer real incentives to anyone who spends at least 180 days a year in the UK and invests meaningfully here. You want the rich in the country, spending in the country, backing British companies — not running their affairs from Monaco and visiting for the tennis.
Second, an idea from the Prime Minister’s own back yard. Manchester City is estimated to contribute around £1bn a year to its local economy, and has helped turn a deprived corner of East Manchester into a genuine centre of sport, business and investment. Wrexham tells a smaller version of the same story. So why not a national football regeneration task force — government, investors, clubs and councils working together to unlock long-term funding for the communities these clubs anchor? There are roughly 170 professional clubs and some 35,000 semi-professional and amateur ones, many sitting on underused land. We have the proof of concept. Use it, then extend it to other sports.
Third, unfreeze housing. Asset values have fallen, transactions have stalled, and a country where nobody can move is a country where nobody spends. A temporary Stamp Duty holiday – and perhaps a mortgage scheme that locks in a rate for the life of the loan – would do more to restart the economy than any speech about it.
None of this is an argument against fairness. It is an argument about how fairness is funded. The Prime Minister has made a decent start on rough sleeping, pubs and apprenticeships. But sooner than he thinks, he will confront the harder truth: growth comes from capital, and capital only comes when the reward is worth the risk.
So by all means ask the wealthy to do more. Just make sure “more” means investing in Britain – not booking a one-way flight out of it.
And if there is a spare corner in Number 10 North, I can do you a good price on table mats.
Nick Finegold is founder and executive chairman of Curation Corp