A temporary National Renewal Tax on the extreme wealth of super-rich individuals could generate a minimum of £130bn in revenue for the government over the next five years, a new report commissioned by Greenpeace UK has found.
This revenue could fairly fund measures that would drastically improve the lives of tens of millions of people in the UK, the report finds, insulating every poorly insulated home in the UK – lowering energy bills, making public transport cheaper and food and farming healthier, as well as enabling over 3 million workers in high carbon jobs to retrain in the green industries of the future.
The report – written by King’s College London economist Ben Tippet for Greenpeace – proposes a temporary annual 2.5% tax on all individual wealth above £10 million for the next five years of the Parliamentary term. The methodology, design and implementation of the National Renewal Tax is drawn from recommendations set out by the Wealth Tax Commission in their landmark 2020 report.
This tax would affect fewer than 75,000 people in the UK, or just 0.1% of the population, but could raise between £130bn and £183bn for the Treasury, depending on levels of avoidance and evasion.
The minimum revenue estimate of £130bn allows for a highly conservative 42.5% avoidance or evasion rate, and is equivalent to 1% of GDP and 3.1% of total tax revenues taken in by the UK government each year.
Globally, the richest 1% emit as much carbon as two-thirds of all humanity. In the UK, the richest 0.1% emit 22 times more from transport than low earners – and 12 times more than the average person. The richest 250 families in the UK also sit on a combined wealth of £748bn and the richest 1% of Britons hold more wealth than 70% of us.
Greenpeace highlights that this disproportionately large carbon footprint of the super-rich means that it is only fair that the very wealthiest individuals should shoulder a greater share of the cost of the necessary transition to a low-carbon economy.
Greenpeace UK’s climate campaigner, Georgia Whitaker, said:
“There is a £130bn elephant in the room when it comes to how we raise the necessary finances to tackle growing inequalities and the climate crisis. The oversized carbon footprint of the super-rich is a clear rationale for ensuring that they play an oversized role in fixing the crisis that they have an oversized role in creating. It’s time the UK government taxed their vast wealth.
“A new National Renewal Tax on the super-rich could raise eye-watering sums of money ensuring that every single home in the UK is warm and cheaper to heat, that bus and train travel is cheaper for all, and that millions of workers are supported into new secure green jobs in the industries of the future, right across the country. By tapping into a fraction of the wealth of a few thousand people we can pay for climate solutions benefitting millions.
“The government must use the upcoming Budget to announce a National Renewal Tax on the super-rich to help transform Britain into the green and prosperous country we all want to see in the fairest way possible.”
The report sets out a list of indicative measures that the National Renewal Tax could easily fund, which would still leave tens of billions of pounds to fund other policies and public services. These measures would simultaneously boost the economy and reduce inequalities, while cutting greenhouse gas emissions, helping to tackle the climate crisis as the UK transitions to a green future.
They include measures for warmer homes, such as a nationwide insulation programme to upgrade all 19 million homes rated EPC D or lower, and energy bill support over the winter months for the most vulnerable households to prevent hundreds of avoidable deaths.
To make public transport cheaper, single bus fares outside of London could be capped at £1.65, with bus travel for people aged 25 and under made free; while also funding a ‘climate ticket’ for trains, providing users with unlimited access to rail travel across Britain for just £49.
Training schemes could be set up to enable the 3.2 million workers in high-carbon industries to retrain and switch to well-paid and secure new green jobs in all four corners of the country.
The National Renewal Tax could also help support farmers with the delivery of agro-ecological farming, which is essential for enhancing the UK’s food security, cleaning up our rivers and nature restoration.
The report is supported by millionaire impact investor and Patriotic Millionaires member, Julia Davies, who also wrote the report’s foreword.
Commenting on the report, Davies, said:
“Don’t believe the government when they say the money isn’t there. Because it is. As someone who would be covered by this tax, I can tell you that if you are fortunate enough to have wealth over £10 million, you can afford to make this contribution to a better future for Britain and still enjoy a very good lifestyle indeed.
“This report highlights that a small, temporary tax on our wealth could transform the lives of millions, while tackling the greatest threat humanity has ever faced – the climate crisis – all while investing in a strong forward-facing economy with quality stable jobs for the British people.”
Report author and economist at King’s College London, Ben Tippet, said:
“The case for a new wealth tax has never been stronger. Wealth inequality has been rising for decades. People are struggling to get by. And much more needs to be done to tackle climate change.
“This report sets out a fair, balanced and feasible proposal for a new wealth tax on the super-rich to tackle these issues, backed up by sound economic theory and empirical evidence. The expected revenues generated are substantial, even with high levels of potential tax avoidance and evasion.
“Learning from the successes and failures of previous wealth taxes, one lesson is clear: a new wealth tax will only work if lobbying to create loopholes is stopped. This is a question of political will, not economics. While taking the leap to introduce a new wealth tax may seem hard, it will build a fairer, greener and more pleasant society for all.”
