Ten years ago, in the epilogue of my book Bread: The Story of Greggs, I stressed the need for the astonishing increase in top earnings in Britain to be curbed. At that time this was considered a serious problem. Yet despite the best efforts of many influential public voices, this position never translated into policy.
Sadly, since then, the growing divide has become even more extreme.. The richest 10% of households now hold 43% of all the country’s wealth, according to the Office for National Statistics. The bottom 50% hold only 9%. We now have 177 billionaires in this country, up from just 29 in 2010, with a combined wealth of £653bn. The difference between very wealthy and less well-off people has become obscene.
Since the 2019 general election we have been told that a central pillar of the UK government’s political ambition has been to “level up” our country. However, the recent venture from our former prime minister, Liz Truss, into radical “trickle-down” economics further exacerbated what was an already unsustainable economic problem – and increased even further the difference between the haves and have-nots. The almost universal backlash against the approach of cutting taxes for the very richest was not surprising, and left us all wondering how the government of the hour miscalculated its policies so badly. At a time of soaring inflation, a cost of living crisis and widespread hardship, how did it not foresee the widespread opposition, including from within its own party, to increasing the already unacceptable differentials?
While the new chancellor, Jeremy Hunt, has reversed most of the mini-budget, we are now being presented with a false choice about the kind of decisions he has to make ahead of the autumn statement: either everyone must feel further economic pain through tax rises, or we must all shoulder unmanageable cuts to our shared, and much needed, public services. This is not a choice that needs to be made. Before considering tax rises for all, or any cuts to public services, Hunt should look to those who can well afford it to make a greater contribution. Some of us in the UK can afford tax rises – but none of us can afford spending cuts, which result in further hardship and more unrest in society.
It is time for wealthy people to make a greater contribution via the tax system, though not at the extreme levels of the Callaghan government in the late 1970s, which led to an exodus of talent from the UK and was a disincentive to ambition. A combination of modest reforms – such as an increase in the very top rates of income tax, equalising capital gains with income tax, revising estate duty, national insurance reform to include investment income, and a 1-2% wealth tax on those with more than £10m – could raise tens of billions of pounds. That may not solve everything, but it would make a significant contribution and introduce a much needed and long overdue element of fairness to the system. It would start to heal the fractures in our society, allowing all of us to work together. That is the only way we can get through this crisis.
Increasing numbers of wealthy people feel they should be making more of a contribution and would be happy to pay more tax. This should not be punitive: it should still allow them to enjoy the fruits of their hard work or good fortune and live in a society with decent values, which is not in danger of breaking down. Many of these people, including me, are now supporting Patriotic Millionaires UK, an organisation working with others such as Tax Justice UK to make our country fairer, stronger and more resilient through our tax system.
I retired from Greggs more than 20 years ago, having spent a large part of my life working with others to build a successful business. I am proud of the progress Greggs has made since then and of the increasing activities of the Greggs Foundation, particularly its breakfast clubs, in the communities where Greggs employees and customers live. But I have been saddened by the increase in food banks and soup kitchens; I have been saddened by growing social deprivation, while the very wealthiest have become even more wealthy. We should all be supporting reforms to our tax system that achieve a real and sustainable redistribution of wealth. For me, this is the key policy for levelling up and essential for any political party hoping to lead the country after the next election.
Ian Gregg was actively involved in Greggs until 2002, when he retired as chairman. He writes in a personal capacity
