Should Andy Burnham Raise Taxes To Pay For His Promises? | Jeremy Vine

[00:00:00]Should Burnham raise taxes? Call us now 0207862.

[00:00:04]The new prime minister held his first cabinet meeting yesterday. He made it clear his focus is on the cost of living, but he admitted he'll have to repprioritize budgets.

[00:00:14]We need uh to every day think, well, what can we do just to take that little bit of pressure off people's shoulders just to give them that little extra sense that help is coming so they can have that bit of bit of hope uh that things are are getting better. And if we're to deliver on uh the cost of living and reducing uh the pressure, then we've got to be prepared to rep prioritize. Uh we've got to show fiscal uh discipline. We've got to show that our commitment to the fiscal rules is real.

[00:00:48]>> Okay. Well, economists at the Institute for Fiscal Studies say he'll soon have no choice but to raise taxes. And let me show you just how unfortunately how bad this is looking already. So 24.3 is the number of billions we borrowed in the month of April. 24.3 billion. Let's divide that by the number of days in April, which is 30 to see how much we borrowed every day in April. So it's81 billion. Multiply 081 by a billion just to see the number. Okay. So it's nearly a billion pounds. It's £810 million borrowed every day in April.

[00:01:25]That's money we're spending. We're not raising in tax. And Mr. Berner has said, "Oh, I look at him. He's turning his pockets out here. He's is like, I haven't got anything. Anyone anyone got any change?" So he's obviously got some things he wants to do and we'll come to how he raises money for them shortly, but let's just say his priorities are as follows on the TVs here. So firstly, we've already seen him take some VAT off electricity and it's he's trying to reduce the cost of living in terms of utilities. He wants to make bus travel cheaper. We've had that policy as well.

[00:01:59]He wants to change social care so everyone has care in old age without selling their house. The cost of that could be incredible. And then the other big one that really haunted Kama was defense and the military. And what do we do to give our military better funding in this more dangerous world? So the answer to all of that is either growth or more borrowing or taxes. The country is not growing. The borrowing can't happen because we're over borrowed. So you end up with this. This this is his thought now. Does he break the manifesto pledge and raise income tax? Does he bring back the 50% tax rate? Does he put a 2% wealth tax on households with 10 million, 100 million? Does he scrap town council tax do a land tax? Very complicated. Does he get rid of VAT exemptions on things like food and ebooks? Does he raise fuel duty? Imagine driver's response to that. Or alcohol duty. Or does he say, "I'm going to cut the tax relief on pension contributions." So that is the list of potential tax rises. The ones that are, you might argue, easiest, like the wealth taxes, they won't hurt many people are actually probably don't raise enough money. And he's in a corner here, isn't he, Carol?

[00:03:16]>> Um, yes, he is in a corner. You know, it was only last week the International Monetary Fund made it really clear to him that he couldn't go on a big spending spree because what they made clear was the people who are lending us money as that you just pointed out, you know, 1 billion a day are going to stop lending us money if he looks irresponsible. So, >> he can't borrow anymore.

[00:03:32]>> No, he can't borrow anymore. But yeah, a wealth tax is so predictable from Labor, but so stupid. It's self-defeating. You know, a wealth tax >> People would love it though, wouldn't they?

[00:03:40]>> Well, yeah, the people would love it.

[00:03:41]But, you know, you mentioned people with 100 million in assets. There's only 4,000 of those in this country.

[00:03:46]>> Well, People say over 10 million might be a way to start.

[00:03:49]>> 4,000 of There's only 4,000 with 100 million plus assets in this country. But you know, wealth tax, okay, one thing, it causes capital flight. Last year, we lost 7 17.5,000 millionaires left this country because of Reeves' tax because of Reeves' tax.

[00:04:05]>> Hang on a minute. 17 and a half thousand millionaire. But one in four pensioners is a millionaire. What does that even mean?

[00:04:11]>> No, that's about people who are worth more than a million. You're conflating what their house is worth to their wealth. It's an entirely different thing. I'm talking about material millionaires, people with millionaire money in this country. Yes. Have >> money in the bank, but the assets are still part of your wealth. But no. Well, exactly.

[00:04:28]>> Yeah. You then you got to choke people out of their home and then what do you do?

[00:04:30]>> No, no, but it's just where would you go with the tax rise?

[00:04:33]>> I think unfortunately when you think about what we need what we need to do in this country and we've got really real problems. You know, people are really struggling dayto-day to make things really and there's certain parties that want to blame, you know, the feckless or people who won't work or can't work.

[00:04:48]They want to blame immigrants and asylum seekers. But the real problem is the distribution of wealth in the country.

[00:04:54]And one of the ways to fix that is through taxation. One of the best ways to do that is through the taxation.

[00:05:01]Explain what you mean.

[00:05:02]>> Well, we know what he means. He means there too some people are too rich. Um, >> so there's this thing called the the genie co well there's this thing called the gen G genie coefficient. It just measures how distributed wealth is. In the 40s it was terrible. In the 70s it was the best. Actually it was the most equitable across this country.

[00:05:18]>> You talk about when we had 90% tax rate >> 98%.

[00:05:21]>> Yeah. Right. But you think that's a good thing.

[00:05:24]>> No, no, no, no. What I'm just listen what I'm saying is so there were lots of reasons why that that changed. One was taxation. Others were involved in national health service, social housing, um better employment practices and all those things. We are progressively since the 70s been going becoming a more but does it matter? I remember Mandlesson obviously scandal now but Mandlesson back in the day said Blair is extremely comfortable with people being filthy rich. That's what he said. Yeah.

[00:05:56]And that was based on the idea that there isn't a fixed amount of money. And if some people over there make squillions, it doesn't make us poor.

[00:06:03]>> And also wealth creators create wealth.

[00:06:05]They trickle >> down. The trickle the trickle down.

[00:06:08]>> Trickle down doesn't work. It I don't think it works. And the key is in the title trickle. So you're not a torrent down. So should everyone be a multi-millionaire?

[00:06:17]>> No. What I'm saying is this is that the problem at the moment is it is not equitable. We need to re If someone's got a better training pair of training shoes than you, >> it doesn't matter. What what matters, we used to be a meritocracy, right? So you could you could go and earn money and then you use that money to go and buy things and it's fine. You don't all have to buy, you know, expensive things, but you should have a dignity of life to be able to do that. Slowly, very slowly, very slowly over the last few decades, we have decoupled, our living standards have decoupled from our wages and attached themselves to asset and capital. So what it means million people who don't work what it means no I'll tell you what it means the top 10% of earners in this country pay 60% of all the income tax that's the reality and when I say the top earners I'm not talking about people on 250 grand a year I'm talking of people 75 grand a year plus which in London is not a great amount of money so those are the people that he wants to tax and take money on people with families trying to pay mortgages and all the rest and and it's it's it's silly to say let's keep on rinsing the rich. All it is is the politics of envy. That doesn't work much transparent moan. Rinse the people worth 50 million.

[00:07:32]>> Well, yes. Yes. But there's not many of them. That's the problem. That's the problem. That's the problem. And the no and Yeah. And absolutely. That's And that's why you need a a kind of overall tax strategy which which fixes that. The top rate to 50%.

[00:07:46]>> But 50% on someone who owns 75 grand is outrageously.

[00:07:50]>> Let's go to a call. Let's go to a call.

[00:07:51]Sam is in Manchester. What do you think?

[00:07:52]Has he got to raise taxes here, Sam?

[00:07:56]>> Raise raise taxes on the rich, mate.

[00:07:59]>> Well, yeah, but we're discussing what rich is because there aren't that many people worth more than 20 million, let's say.

[00:08:08]>> Well, we've got to raise we've got to raise we've got to raise the tax threshold on people who are earning over £100,000, mate.

[00:08:18]>> 100,000. So, so you would tax them at 50%.

[00:08:23]>> Well, I was thinking more than that, mate, because if you're on £100,000?

[00:08:27]Yeah.

[00:08:29]>> You're not struggling, are you?

[00:08:30]>> You're not struggling to pay the rent.

[00:08:32]Depends where you live.

[00:08:34]>> Carol, >> it depends where you live, how many kids YOU'VE GOT. CAN I ask you, do you work, Sam?

[00:08:40]>> I have worked. Yeah, I'm retired now.

[00:08:42]>> You're retired. Okay. So, so it's all very well for you to sit there and say people who are earning and they're working hard and earning keeping their families and and and this just tax them because they're earning more than you think is right. It's not fair. People who earn 100 grand a year are working damn hard, >> but they're richer than other people.

[00:08:59]>> Maybe they are, but we don't live in an equal.

[00:09:01]>> But if we But if we Okay, let's let's let's go to the break and we'll take more calls. Should Andy Bernham raise taxes 0207862.

[00:09:09]See you shortly.

[00:09:11]Before the break, we asked where was the Rubik's cube invented? Hungary, Poland, or Russia? And it's Hungary.

[00:09:29]One of those things where my iPad won't charge. You ever had that?

[00:09:32]>> That's been That's been trying to charge all morning. What's wrong? It's been a problem all is that it's that port >> or that is that hole there where the plug What's going on?

[00:09:42]>> Oh, it's got stuff in it. Has it >> fluff? Need to defluff it.

[00:09:46]>> You think that's going to sort it?

[00:09:47]That's very technological.

[00:09:49]>> You're just blowing it all back in there.

[00:09:50]>> Is there not a thing you spray hairspray in it? No.

[00:09:53]>> Hairspray. So, >> I've got hairspray if you want. Hair. I can nip off >> hairspray. Hair hairspray. A little bit of cellar tape.

[00:09:59]>> Did you say you've had problems as well with your portal?

[00:10:01]>> No, I didn't say that.

[00:10:02]>> Why? Why would >> No, I thought you said I've had that. If I have a problem, I just hand it to my husband and say, "Can you fix that, please?"

[00:10:07]>> Can he Is he around?

[00:10:08]>> Uh, no.

[00:10:11]>> We'll work it. If anyone knows, let us know. We'll be asking if we should ban people from keeping wild animals as pets later. Better laughing. Now, we want your calls on whether Andy Burnham should raise taxes. 0207862.

[00:10:24]We went through it. April was the month.

[00:10:27]Nearly you could all that's 800 million almost a billion a day we're borrowing let alone have we got more to spend >> he wants to raise spending how does he do it you could let the economy grow it's not you can borrow more he can't therefore he must raise taxes there's no two ways about it Steven Abodine what taxes would you raise >> none by the way before I say anything more Jeremy condolences to the team on the sadness of >> Thank you. And we'll we'll mention what we learned yesterday in the courtroom because well, I don't want to say anymore because it's a court case.

[00:11:06]>> That's okay.

[00:11:07]>> But thank you so much for that.

[00:11:09]>> Uh no, I wouldn't. And I'm one of the unfortunate people that's on benefits through an injury, but we'll leave it there. I believe that what should happen is that the pot of money that's getting handed out to the non- taxpayers should be the areas that gets reduced.

[00:11:30]>> But you just said you're on benefits yourself. So you are you seeing people claiming benefits they're not entitled to?

[00:11:37]>> Uh I would just say they're questionable.

[00:11:39]>> Right. But well tell me about your injury then Steve because obviously that's not questionable.

[00:11:45]What happened was I was working with autistic adults.

[00:11:49]uh I was involved in an incident as a result of that uh left me where I need a re knee replacement and I'm scared etc etc etc that's escalated to mental health where quite happily uh take the suicide pill what I mean but it's not as bad as that Jeremy it's not but I don't have the worthiness and so forth and there's a lot behind it and I'm working on it cuz I do not want to be in this position I do not want to be on the benefit. It's life. It's life, Jeremy.

[00:12:22]But one thing I will say is when I first moved to Aberine, I was working three jobs 7 days a week and I was earning quite a lot of money, but I was paying my taxes. I'm proud of it.

[00:12:34]>> Very proud of it.

[00:12:34]>> Yeah, I think everybody does do that.

[00:12:38]And things like companies that do not pay their taxes that actually sell within the UK.

[00:12:45]>> Yeah. Well, that's a tricky one. That's a tricky one because um thank you Steve.

[00:12:49]>> I think Steve's story is is why you know our system works. We need taxes because as he said there you know he he's been you know down had a bad bad situation and he's getting help and he's working his way through he'll work again >> and he'll work. Yeah. And it's great and that's what we >> but it's a transitional thing. It's not a lifestyle.

[00:13:09]>> Yeah. But before you you you start any conversation you've got to sort of decide what do you stand for. Do you stand for a society that helps people when they need it? And >> but it's gone way beyond that. Now you say that we don't just it's become a lifestyle choice for a lot of people. We have 11 million people not working. 1 million of those people are young people who should be out there looking for jobs. And there was a big poll recently that said something like 35% of young people don't actually want to work.

[00:13:38]They'd quite like a lifestyle of I don't I I I'm sorry that you feel like that. I do not believe that. I do not believe I do not. People like to say that people out there, you know, people in benefits, they're lazy and they just don't want to work. It's a lifestyle choice. I do not believe that.

[00:13:53]>> Okay. That's that's a key difference between you. Lynn is in Tai and we Hello, Lynn.

[00:13:57]>> Hi.

[00:13:58]>> Well, so what is Bernham? I I haven't heard him talk about cuts, so we got to assume he's going to raise taxes, >> right? What I would do a proper people's tax. Start at the top. Crown MPs pay extra.

[00:14:14]Amazon um benefits and even right down to immigrants even if it's a few quid everybody coughs up so nobody can complain.

[00:14:27]>> Right. So wait so wait you you would tax everyone an extra 5 p in the pound let's say would you?

[00:14:33]>> No not off earnings. Ah >> oh I see. everything >> pensions >> start at the top like I say the creme they could cough up some more MPs are quite well off >> well they're not quite Lyn they're not quite well off they they earn in total I think it's about 90 grand a year and they >> they've got a house they've got another house and then they've got extra work you're not going to win this one >> count no I'm not going to win it but the bottom line is they're they're in they're in London They're working all hours of the day night or they're supposed to be there. Don't get me wrong, there's not a lot of MPs that I think very much about at the moment. But but you know, if you've got to get people to come and work in London and work all hours and work till midnight in debates, well, you've got to pay them.

[00:15:21]>> Well, I think what I'm hearing, yeah, the problem is the idea that the 98,000 is is a low salary.

[00:15:26]>> You know, in London it's a low salary.

[00:15:28]It is a low salary in London.

[00:15:30]>> It depends what you mean by low salary.

[00:15:31]I mean, if is it a low salary?

[00:15:33]>> It's not a high salary. It's not low. Is that a low salary in terms of they're walking around the supermarket thinking I've only got 15 quid to, you know, feed myself or is it a low salary in terms of well I can't jet off to Barbados three times this year?

[00:15:44]>> All right, Lyn, thank you. Lean East Sussex. What do you think Burnham should do on taxes?

[00:15:49]>> Um, I think we are dealing around the edge. Although I sit slightly to the left, I think income tax busted flush. I work in finance. Most very wealthy people show very very little income. uh they take most of their money from dividends. I believe we should equalize capital gains tax. But the ones we really should look at is a land value tax. We are banking land in this country. There's 1 and a half million empty houses. If we taxed developers on that land, it would suit the right and the left. It would bring in revenue. It also generate growth.

[00:16:23]>> Would it just help me understand is this would this for your ordinary house owner? Would it replace council tax?

[00:16:30]Indeed. Yeah. I mean, you have to have exemptions to things like agriculture.

[00:16:33]Obviously, you have to have exemptions to things like that. Look at the Danish model. It works very, very well in Denmark. So, the minute you obtain land, you are taxed on that land. So, it stops land banking. I'm in finance.

[00:16:46]>> I understand you're in finance, but your average home owner isn't land banking.

[00:16:51]They're just living in a house, right?

[00:16:52]So, would their council tax bill go up?

[00:16:54]>> Yeah. In the at the moment, say you've got person A owns a house, person B owns a plot of land. The minute person A puts an extension on their house, they go into a higher counter tax ban. So they are penalized for growing the economy where someone can bank the land. It's it's a complex system. I do agree.

[00:17:13]>> Well, how long would it take? Well, one country that brought it in had to give a runin of 20 years to bring it.

[00:17:18]>> But it works very very well in Denmark and Yeah. But it works very well in Denmark. It works very well in Australia. It's not perfect.

[00:17:24]>> You like it?

[00:17:25]>> I like the idea. Absolutely.

[00:17:27]>> I I I don't. Some states in the US do that. So, some states don't have income tax and they instead they have uh a land tax, house tax, >> but it is basically a soup up council taxes. Looking at the count, you're looking at people's houses. You say, "How much are they worth?"

[00:17:41]>> It's going to mainly hit developers, not not >> he's talking about houses.

[00:17:47]touch everybody and it'll it'll be basically >> and the problem is that it's it's it's making an assessment on how much money you have based on the house you live in and I think Cal touched on that point earlier you know if you live in you could live in a relatively modest house in the UK in London for example that could be worth a fortune but you don't have loads of money and then you've got you might have to >> I got friends in that situation no earnings at all bought a house in 1960 now it's worth maybe £3 million >> so they would be hit incredibly difficultly It would be they I guess they'd have to sell it, but then there would be a suddenly the market would be full of people in that situation selling their homes.

[00:18:22]>> So you would be wiping out a bit of value on those houses. I don't know.

[00:18:26]>> It's also unhelpful to focus in on one group of people either by earnings or whether they're working or not.

[00:18:32]>> But that's what that's what you want to do with a wealth tax. You want to focus on one group of people. And the thing is if you actually do a wealth tax, you know, you most of wealthy people's money is tied up in investments. investments which produce jobs and which produce money and which which >> I thought you were in favor of wealth tax half an hour ago.

[00:18:49]>> I was not okay that I said the total opposite.

[00:18:52]>> I thought you were in favor of wealth tax.

[00:18:53]>> No, I did not. I said the >> I think the idea is Hang on. We've got to take our break.

[00:18:56]>> Okay.

[00:18:57]>> It's always good when the break comes in and we don't want it to come because that means we're having a good discussion.

[00:19:01]>> Yes.

[00:19:02]>> Thank you for your calls. We will move on. Later we'll ask if people should be banned from keeping wild animals as pets. Short answer, yes. After the break, should we scrap plans to release prisons early? 0207862.

[00:19:14]See you in a minute.