Taxing wealth of UK’s richest ‘could cover rising health and social care costs twice over’

A wealth tax on billionaires and multi-millionaires in the UK would make a hike in National Insurance contributions needless, a new report has suggested.

The revenue could pay the salaries of 50,000 new nurses, permanently increase Universal Credit by £20 a week, and build 35,000 new affordable houses, the report said.

According to calculations from Oxfam and the organisations Fight Inequality Alliance, the Institute for Policy Studies, and Patriotic Millionaires, an annual tax applied to the wealth of billionaires and multi-millionaires in the UK would raise £43.71 billion a year.

The report sets out a graduated structure, with a 2 per cent tax on wealth over $5 million; 3 per cent on wealth over $50 million; 5 per cent on wealth over $1 billion.

It says the revenue could cover the cost of the government’s new Health and Social Care Levy twice over every year - eliminating the need to raise National Insurance, which is set to be increased in April.

Billionaires have seen their wealth soar during the pandemic, according to Oxfam.

The world’s 10 richest men – including Elon Musk, Jeff Bezos and Bill Gates – more than doubled their wealth during the crisis, while 99% of the population are worse off and more than 160 million more people have been driven below the poverty line, the charity said.

In the UK, people are facing a “a winter of discontent” with rising living costs, stagnant wages, skyrocketing energy bills, and an under-resourced NHS, according to Jenny Ricks of the Fight Inequality Alliance.

She asked: “Why pour on the pain with a hike in National Insurance when there is a much fairer alternative that would also fund vital public services?”

“The situation is critical for so many in both rich and poor countries - the inequality virus has laid bare a broken system that forces us to choose between healthcare and the environment, between heating and eating, between affordable housing and a living wage.

“We have a rare opportunity to rewrite the future rather than stick to the status quo,” she said.

Revenue could also be used to invest in a programme to retrofit UK homes to reduce energy prices and tackle climate change, the report suggested.

It found $2.52 trillion could be raised if the tax were applied globally – enough to lift 2.3 billion people out of poverty, make enough vaccines for the whole world, and deliver universal health care and social protection for everyone in low and lower middle-income countries.

The report’s release has been timed to coincide with the World Economic Forum meeting in Davos, Switzerland. The future of the pandemic, vaccine equity, and energy are all set to be discussed this week.