If Starmer were to decide to tax the “super-rich” rather than cut benefits, the question of whether he could raise enough money to cover expenditure and his ambitions is complex. Here’s an analysis formatted for Lemmy, with sources at the bottom:

Can Taxing the Super-Rich Fund Starmer’s Ambitions and Cover UK Expenditure?

The debate around funding the UK’s public services and Keir Starmer’s Labour Party ambitions often pits benefit cuts against increased taxation on the wealthy. While a significant revenue stream could be generated from the “super-rich,” whether it’s enough to cover the UK’s vast expenditure and all of Labour’s proposed spending is a nuanced question.

The Scale of Expenditure and Labour’s Ambitions First, let’s consider the financial targets:

  • Current Government Expenditure: For 2025/26, the UK’s government expenditure remains substantial. Day-to-day departmental spending is projected to be around £543.8 billion, with an additional £129.5 billion for capital spending. Key areas include health, social care, local government, and defence.
  • Starmer’s Ambitions (Labour’s Manifesto): Labour’s 2024 manifesto outlined several key spending commitments aimed at economic growth, green initiatives, and public service investment:
    • A £7.3 billion National Wealth Fund for clean energy.
    • Increasing public R&D spending to £22 billion annually.
    • Building 1.5 million homes over the next parliament (300,000 annually).
    • Ending hotel use for asylum seekers and clearing the backlog.
    • A “New Deal for Working People” with a genuine living wage.
    • A “proper windfall tax on oil and gas companies.”
    • Investments in green energy infrastructure (onshore wind, solar, offshore wind, nuclear).
    • A “Young Futures programme” focusing on mental health and youth workers.
  • Welfare Policy Shift: Starmer initially considered £5 billion in benefit cuts but has recently made concessions, particularly on disability benefits, due to internal party rebellion. This shift implies a greater need for alternative funding sources.

Potential Revenue from Taxing the Super-Rich Various proposals exist for increasing revenue from the wealthiest:

  • Wealth Tax: Organisations like Oxfam and Tax Justice UK have advocated for a 2% wealth tax on individuals with assets of £10 million or more.
    • Estimated Revenue: Research from King’s College London and Tax Justice UK suggests such a tax could generate £24 billion annually from the wealthiest 20,000 individuals, even accounting for behavioral changes like emigration. Another study indicated a 2% wealth tax over the past three decades could have raised £160 billion.
  • Other “Super-Rich” Taxes:
    • Abolishing Non-Dom Status: Labour’s manifesto pledged to scrap non-dom tax status, though recent hints suggest a potential reconsideration due to millionaire outflows.
    • Increased Stamp Duty Surcharge for Non-UK Residents: A proposed 1% increase.
    • Ending VAT Exemption and Business Rates Relief for Private Schools: Estimated to raise over £1.5 billion.
    • Windfall Tax on Oil and Gas Companies: A consistent Labour commitment.

The “Enough Money” Question

  • Closing the Gap: An annual £24 billion from a wealth tax is a substantial sum. This amount could easily reverse all planned disability benefit cuts and reinstate the winter fuel allowance, with a significant surplus potentially directed towards the NHS or other public services. The initially proposed £5 billion benefit cut is considerably less than this potential revenue.
  • Full Coverage: While £24 billion is significant, it pales in comparison to the UK’s hundreds of billions in total government expenditure. It’s highly unlikely that taxing the “super-rich” alone could cover the entirety of the UK’s annual spending and all of Labour’s ambitious manifesto promises without additional revenue streams or careful spending prioritisation.
  • Behavioural Responses and Implementation: The actual revenue generated by new taxes on the wealthy can be influenced by behavioral changes (e.g., tax avoidance, emigration), although some research indicates this impact might be less severe than commonly feared. Effective and fair implementation of such taxes would also be a challenge.
  • Economic Context: The UK economy faces slower growth for the remainder of 2025, and a weakening labor market. While some confidence indicators are improving, these economic realities add to the fiscal pressures.

Conclusion

If Keir Starmer were to implement robust measures to tax the “super-rich,” such as a significant wealth tax, it could undoubtedly generate tens of billions of pounds annually. This revenue would very likely be more than sufficient to offset planned benefit cuts and provide substantial funding for some of Labour’s key spending ambitions, particularly in public services and targeted support. However, to cover the entirety of the UK’s vast government expenditure and all of Labour’s ambitious manifesto promises, it is improbable that taxing the “super-rich” alone would be enough. Such measures would likely need to be part of a broader fiscal strategy involving other revenue-raising initiatives, potential spending reprioritisation, and prudent economic management. The political will to enact such significant tax reforms and manage any potential economic repercussions (like capital flight) would also be crucial.

Sources:

  • UK Government Expenditure:
  • Labour Party Manifesto and Policy:
    • “Labour Party Manifesto 2024.” (Refer to the official Labour Party website for the most up-to-date manifesto details.)
    • News reports on Starmer’s position on benefit cuts and concessions (e.g., BBC News, The Guardian, Financial Times for recent policy developments).
  • Wealth Tax Research and Proposals:
  • Economic Context:

Disclaimer: I very much asked AI for help on this one.