MP for Hornsey and Wood Green
Firstly, obviously, Happy New Year to everyone.
I went to my hairdresser to have a hair cut (too short – hate it) and we were having a conversation about the new tax rate. Or rather, he was telling me of a client who is moving to Switzerland because of the 50% tax rate and the change to bankers’ bonuses etc. He said other clients were thinking of leaving the country (this is a little hairdressers in Finchley Central by the way – not a swish West End jobby) because of this stuff.
I said (and please remember this is a hairdresser/client conversation and not a political debate) that going to live in Switzerland was a high price to pay to save a bit of tax (sorry Switzerland) as it was boring, made clocks and had nice mountains – but living in London - the most exciting, brilliant city in the world – had to be worth a slightly higher rate of tax particularly as it the new rate doesn’t kick in until you are already earning £150,000.
I then put the case that there comes a point in terms of earnings where the amount earned is enough for a really decent and even luxurious life – and that thereafter it is not such a terrible thing to pay 50% tax. (It was, after all, LibDem policy until we moved to a more progressive form of a tax switch – from income to pollution and taking low and middle income earners out of paying any tax up to the first £10,000 of earnings). Of course, business and profit are to be lauded and encouraged – that is how business works – and I come from a family who all had small businesses and know how tough it is to make a profit.
And we, my hairdresser and I, agree that it is great to want a decent life and be able to afford what you want – but that that there is a need for the common good and the narrowing of the ever-widening gap between rich and poor. We collectively shake our heads sagely in comfortable agreement about the greed that drives people to move their estates off-shore, to become non doms to avoid tax – and all such devious moves to deny the Treasury its tax take.
OK – so I read this morning in the Guardian that Angela Knight, Chief Executive of the British Bankers’ Association has issued a ‘stinging attack’ on the 50% supertax and bankers’ bonuses. Well – that’s her job – so no surprise there.
But the point is that, even if there had been no economic crisis and no credit crunch – it seems to me to earn £36.8 million before bonus as the top earning Director of a FTSE 100 company did either last year or the year before – is obscenely more than you need to lead a decent or even an uber-luxurious life-style and a bit of extra tax is not only fair but also will make that Director feel better about his humongous earnings – having paid his dues.
Or am I wrong?