Skip to content


Oho is shocked? “Outrage over huge pay rises by Manchester Airports Group bosses” was a Guardian story on Wednesday, just as the airport seized up. These eight-hour passenger queues were partly caused by the company’s mass layoffs; nearly 900 jobs were cut within the airport group during the pandemic. No wonder he is now struggling to recruit, after the remaining staff took a 10% pay cut to help the business through Covid. Yet, in that same moment of crisis, executives had grabbed huge pay raises of almost 25%. The chief executive received a £500,000 raise, taking his total salary to £2.5million.

It’s just one of many stories of boardroom lows that have filled the business pages in recent decades, as big cats plundered the companies they run while average salaries stood still. . Here is the question: is Britain so used to decades of kleptocracy that voters callously ignore it, as they do in Russia?

The lid blew in the 1980s, and since then many of these masters of the universe have been severely undertaxed, according to a report published Wednesday by IFS. A corrupt tax system allows those who record their income through their own business to pay only 27% tax, classifying their income as “capital gains”: as employees, these high earners should pay an average of 42%, according to the IFS. This deception looks much worse in a week when ordinary employees have been hit by the National Insurance tax. Other types of income – whether capital gains, stock dividends, professional law partnerships or rent from landlords – pay no NI dues and are taxed less than earned income. Taxes on unearned wealth can drop to 10% for the wheeze of “corporate asset disposal relief,” or even zero when capital gains owed to the Treasury are mysteriously wiped out on death.

The only sensible thing that Margaret Thatcher’s chancellor, Nigel Lawson, did was to tax all income at the same level, whatever its source, removing any incentive to distort income by channeling it through elaborate structures of freelance and corporate work. Shadow Chancellor Rachel Reeves has proposed a similar policy. The government’s own creation, the Office of Tax Simplification, has recommended aligning income and capital gains tax rates in 2020. So why has the Treasury put this measure on the back burner?

The only reason may be to please the very wealthy. It’s not just the party donors, but the social and political milieu of the conservatives. They make hyper-wealth a normal thing and any attack on it a danger to “the business”. The IFS strongly rejects this idea. Helen Miller, deputy director of the IFS and co-author of the report, writes that “preferential rates on business income” change the way people perceive their income, “but are not well targeted to promote entrepreneurship “.

Rishi Sunak is in trouble over the revelation that his wife – whose annual income is £11.5million – is a non-dom who legally pays no UK tax on the money she earns at home. ‘foreigner. It illuminates a stratosphere of wealth far beyond the imagination of most taxpayers. If Sunak never heard the horn honk on what that might be like, it reveals how little he understands about the lives of most people he is now subjecting to the harshest cost-of-living shock in memory. man, not to mention the poorest people who are far below his level. radar.

A massive £100,000 donation Sunak recently made to his former school, Winchester College, displays an equally alarming disregard for the state schools he starves, whose teachers earn 8% less than ‘ten years ago. Sure, a plutocrat could be Chancellor – all MPs are in the top 10% paid – but to be a credible politician you need 10 times the social sensitivity of this fiscally conservative belt-tighter. The Governor of the Bank of England displayed this same social idiocy when he called on workers, but not the boards, to show ‘restraint in wage negotiations or else it will spiral out of control’ even then that the real wage is falling even more rapidly after a decade of wage stagnation. .

The top 1% tend to defend themselves and their tax privileges by angrily retorting that they pay 28% of all income tax and national insurance collected nationally, from so everyone should be really grateful to them, and the Treasury too. What’s more, the share of total income tax and income tax that they contribute is increasing: they were only responsible for 20% collected in 2003-4. Well, of course it’s increasing, because their incomes have more and more exceeded everyone else’s since then, so they’re paying a bigger share. The gap between rich and poor has widened to the widest in more than a decade. The ONS said the income inequality gap, measured by the Gini coefficient, had “steadily increased to 36.3%”, which was “the highest level of income inequality since 2010 “.

Is Britain now shock-proof, too used to these familiar stories of greed at the top to react? Many, myself included, believed that the crash of 2008, when banker risk-taking was bailed out by taxpayers, would mark the time when the public would no longer tolerate unearned and undertaxed rewards. But no.

So far, wage stagnation has been a slow frog boiler. But this time, as food and energy bills arrive like Exocets landing on ordinary households, forcing immediate cuts in family spending, not only for those living in poverty but also for people who are more comfortable, the spectacle of corporate board greed and pandemic profiteering can ignite public outrage. If so, Sunak will become an increasingly uncomfortable figurehead for conservatives.

Polly Toynbee is a Guardian columnist

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.