Tax cuts for the rich have deprived the UK public of almost £14 billion – an amount that would fund plans to address the social care crisis for two full years, according to new analysis published by UNISON today (Sunday).
While millions of people have struggled financially in recent years, the highest earners have enjoyed hundreds of thousands of pounds in savings as a result of a reduced top rate of income tax, says UNISON.
The government’s decision to cut the top rate from 50p to 45p introduced in April 2013 has benefited the rich, while local authorities have been starved of funds and services cut, contributing to social care problems faced across the UK.
UNISON has calculated that the savings for super-earners with incomes of more than £1 million a year have reduced payments to the Treasury by £13.98 billion, between 2013 and the current financial year 2019/2020. As a result the UK’s millionaires have paid £782,000 less tax on average over seven years.
A new report by the House of Lords Economic Affairs Committee on the adult social care sector published on Thursday estimated that a new NHS-style social care system would cost £7 billion annually and could be funded from taxes.
Both Conservative party leadership candidates have outlined their own plans to cut taxes, despite the ongoing crisis in social care – money which should be used to tackle the growing social care problems, says UNISON.
Boris Johnson has pledged to raise the threshold for the 40p tax rate, which the Institute for Fiscal Studies (IFS) estimates will cost £9 billion in lost revenue every year. Jeremy Hunt has proposed cutting corporation tax, which would cost the Exchequer £13 billion per year in the short term, according to the IFS.
A UNISON analysis of HM Revenue & Customs (HMRC) statistics published last week shows the number of taxpayers earning more than £1m each year has risen from 15,000 to 21,000 since the then Chancellor George Osborne introduced the tax cut in 2013.
Commenting on the analysis, UNISON general secretary Dave Prentis said: “The Conservative leadership candidates have got their priorities all wrong. The whole country knows social care is in urgent need of major reform, but sees politicians continually kicking the can down the street while offering tax sweeteners to people who are already more than well off.
“The elderly and other vulnerable people need the care sector to be funded properly. It also needs an injection of cash to better value the work of those in the care sector. They are the lifeline that helps people with complex needs stay in their own homes yet are being paid less than workers stacking supermarket shelves.
“Instead of helping the rich line their pockets, the government should be ploughing money into services which make a real difference to society and our ageing population across the whole of the UK. This lost £14 billion would not have been a permanent fix but could have been a step in the right direction.”
Notes to editors:
– The top rate of income tax refers to the additional rate (currently 45p in the pound) that applies to earnings over £150,000 per year.
– UNISON is the UK’s largest union, with more than 1.3 million members providing public services – in education, local government, the NHS, police service and energy. They are employed in both the public and private sectors.