Attacks on the wealthy authors of Austerity 2.0 could backfire

The author is Professor of Politics at Queen Mary University of London

If Jeremy Hunt’s first Autumn Statement doesn’t run into trouble – not least with his Conservative peers – over the next few days, he’ll be very lucky. Every Tory Chancellor who has tabled a budget since 2010 has had to go back to the House of Commons to reverse a proposal or proposals – albeit none as spectacularly as his predecessor Kwasi Kwarteng.

George Osborne, whom Hunt appears to have approached for advice on this week’s package, knows this all too well. In 2012, following his Omnishambles budget, he had to strategically withdraw on several measures. Nadine Dorries said Osborne and Prime Minister David Cameron were “two posh guys who don’t know the price of milk”.

Dorries voiced a broader concern among Conservatives that the wealth and privileges of his top team make it difficult to sell spending cuts and tax increases to hard-pressed voters – even if some of them, including this week’s cut in the capital gains deduction on dividends and second homes, are at least symbolically aimed at the wealthy.

This concern is even greater now that the two Tories trying to rein in public spending are far wealthier than Cameron and Osborne.

Hunt is reportedly worth at least £14m and Prime Minister Rishi Sunak (thanks to his wife Akshata Murty) £730m. But does the fact that half the country seems to think Sunak is too rich to become prime minister really pose a political problem? Britain’s attitude towards the rich is a bit more nuanced – and less hostile – than first thought. Courtesy of detailed research Conducted in the US, Germany, France and the UK by Rainer Zitelmann, a sociologist, we can see how much.

Brits seem far less jealous than their continental cousins. Zitelmann ranks 34 percent of French and 33 percent of Germans as envious of the rich, but only 18 percent of British respondents (and 20 percent of Americans) fall into this category.

However, the study also found that the nation viewed some wealthy people as more deserving than others – entrepreneurs, the self-employed and top musicians and actors, with athletes not too far behind. At the bottom of the list (perhaps no surprise) are bankers. Helpful for proud entrepreneur Hunt, perhaps, but less so for Goldman Sachs alumnus Sunak.

Fortunately for both of them, although a range of fairly predictable negative traits are associated with the wealthy, only about a quarter of Britons have been recklessly or greedily selected. They were also significantly less likely than the Germans and French to blame the rich for “many of the world’s biggest problems” – Labor voters (33%) were much more likely to hold this than their Conservative peers (13%). wealthy responsible.

This divide resurfaces in attitudes toward taxation. Just 20 per cent of Labor supporters (compared to 46 per cent of Tory supporters) opposed “excessive” taxes on the rich because they had worked hard. When asked whether the rich should pay very high taxes to ensure the gap between rich and poor does not widen, 53% agreed, compared to just 21% of Tories. More Britons – ranging from 38% to 29% – supported very high taxes on the wealthy, rather than worrying they might be excessive.

What we consider “excessive” is debatable. Conservatives like to remind people of the tax rates imposed on the wealthy in the 1970s – so “punitive”, they argue, that they stifled entrepreneurship and incited voters against high taxes, leading them to vote for Margaret Thatcher in 1979 .

Recent historical research public attitude to taxation from the mid-1940s to the early 1990s, however, shows that this narrative only caught on in the late 1980s and is largely a myth. In reality, any “tax resistance” has been outweighed by concerns about public services and general fairness. Hunt’s modest decision to lower the 45p income tax threshold from £150,000 to £125,140 is unlikely to meet with much opposition.

A majority in Britain supports it these days a range of potential wealth taxesan example is an annual tax of 1 per cent or more for those whose total wealth (excluding home and pension) exceeds £500,000.

All of this suggests that Labor (in 2008 the party dressed activists in top hats in a failed campaign to prevent a wealthy Tory candidate from winning a by-election) would squander its firepower in launching an all-too-crude attack on British multimillionaire Downing to host street neighbors. But a more subtle attack on the authors of Austerity 2.0 could prove useful for the party in the face of this week’s tax decisions – particularly to mobilize its own supporters.

The politics of envy? Maybe. But, as the essayist William Hazlitt put it nearly 200 years ago: “Envy has, among other ingredients, a mixture of love of justice.”

https://www.ft.com/content/a7bd1a68-998c-4d26-8a32-c3847b34bc88 Attacks on the wealthy authors of Austerity 2.0 could backfire

Adam Bradshaw

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