When we set up Tax Justice UK back in 2017 we wanted to make progressive taxation an issue that politicians were confident to talk about.
For too long wealth taxation in particular had been a no-go area for MPs. They were often fearful of media and political backlash if they suggested taxing wealth in a smarter way.
The Labour Party conference shows how far we’ve come.
In advance of her speech, the shadow chancellor, Rachel Reeves said : “I do think that people who get their income through wealth should have to pay more”. This is something we’ve been calling for alongside our allies.
Reeves set out how unfair the tax system is and laid down principles for how a Labour government would deal with tax reform. She announced that Labour would scrap business rates and replace them with something “fairer”.
She also warned Amazon’s billionaire boss Jeff Bezos: “If you can afford to fly to the moon you can pay your taxes here on earth!” She committed to ensuring the digital giants pay a fair amount of tax in the UK.
It’s now clear what the shadow treasury electoral strategy is – they want to build a broad coalition with proposals that both keep the Labour membership happy, but also capture business support.
But for them to succeed there is more work to be done. The shadow chancellor did not commit to taxing income from wealth the same as income from work. And while the opposition’s course on tax issues appears to be heading in the right direction, we still haven’t heard enough detail on their plans.
Finally, I am concerned that Labour is still talking about the need to “balance the books” as a household would have to. Government finances are not the same as a household, as our colleagues at NEF have pointed out. Borrowing is still very cheap. The consensus amongst economists is that the government should be spending now to support the recovery, rather than worrying too much about the deficit.
We’ll keep pushing politicians of all stripes to commit to taxing big companies and the wealthiest. This will help support the public services we all rely on as we recover from the pandemic, and meet the challenges of climate crisis, rampant inequality and demographic change.