The 1% should recognise a big fortune is usually built on good fortune

Stop weeping about the £600,000 you take home every year shrinking by a few thousand. It is offensive to the people who survive on a hundredth of that, says Alex Andreou.

“The rich already pay their fair share,” said millionaire David Cameron in response to millionaire Andrew Marr.

This is a sentiment echoed by a number of Conservatives in the last few days. In support, they present figures which show that the top 1 per cent contributes a higher percentage to the total tax take than others. But what struck me was how all commentators persisted in only using percentages.

What about actual figures? Let’s talk numbers.

I will be extremely generous. I will make the assumption that we live in a world where a talented, expensive accountant cannot create a dozen shell companies in exotic places to hide income. I will make the assumption that this top 1 per cent declares every penny it makes and pays full tax on it.

I will accept every assumption made by John Redwood MP – the self-appointed chartered accountant of this Borg collective. I will use 2009-2010 confirmed HMRC figures to avoid charges of manipulation or error.

The total number of taxpayers in the UK is just shy of 30 million. The top 1 per cent is, therefore, 300,000 people. Total income declared across the UK was £870bn. Of that, £121bn was made by the top 1 per cent. The total income tax received was £145bn, of which £40.5bn was contributed by this top-earning 300,000 people. This yields an effective average personal tax rate of 33.5 per cent.

This leaves the top 1 per cent with an average annual personal income, after tax, of £268,000. Over a quarter of a million, on average, each year. It might be “chicken feed” to Boris Johnson, but it is a lot of money to most of us.

Let’s look at a smaller slice, still – the six thousand people in the UK who have a personal income of a million or more. After all personal tax deductions, they are left with over £600,000 a year. It would take a UK person on the median income over 30 years to make what the lowliest of these six thousand people make in a year. A whole working life. 

The additional insidious suggestion by David Cameron, the cause of much mirth at Tory Conference, was that by choosing to tax this top slice less he was not gifting them a tax-break, because “when people earn money, it’s their money”.

The implication being that this money was not made using the work of low-paid people forced to claim benefits to supplement their income; not made using the roads, airports and ports we all pay for; not made by all of us buying their goods and service; not made under the protection of the same police, fire and health services we all paid for.

No. This money magically came into existence out of the very same anatomical orifice of these “doers” and “risk-takers” out of which the sun, evidently, shines. A result of their entrepreneurship and get-up-and-go; nothing else.

Theo Paphitis is an interesting case study – held up perpetually as an example of that archetype. A few months ago, he was asked on Question Time what motivates him. He said it was the will to create things, to grow his companies, to employ people, to make his mark. Ten minutes later the panel was discussing the top rate of tax. He said that if personal tax was increased on those making more than a million, he would up and leave the UK.

So, which is it? Pick one, Theo. You cannot claim the mantle of wealth-trickling sainthood, while clinging on to every obscene penny with bony, Scrooge-like fingers, under threat of imminent departure for Barbados. You cannot claim that your wealth is the result of your hard work alone, while consistently calling it “my kids’ inheritance” on Dragon’s Den. What will they have done to deserve their share of your £170m estimated worth, when you’re no longer around?

None of us, including Cameron or Paphitis, would look at a couple in which one partner said “you’re at home raising the kids – no more hand-outs, you leech” with anything other than disgust. None of us would look at a wealthy family which refused to pay for its kids’ education or kicked out granddad when he became ill and think “bravo – tough love”. All of us admired how a community came together, took time off work, with no thought for their own self-interest, to look for a missing six-year-old.

At what point, precisely, do these qualities of selflessness, compassion and solidarity cease to be attractive? At what point do the rules change and we go from individual, couple, family or community to UK plc? Tax is simply the state’s expression of these qualities. A recognition that a big fortune is built, at least in part on good fortune, be it of birth, education, health or position.

The idea that everyone’s tax pays for a tiny percentage of benefit scroungers, is not only manifestly absurd, but damaging to the nation and destructive to one’s own morale. Isn’t it better to assume that your tax bought a wheelchair, educated a talented but disadvantaged kid, saved a diabetic, paid for a great teacher – which it does the vast majority of the time?

So, stop moaning about percentages. Stop weeping about the £600,000 you take home every year shrinking by a few thousand. It is offensive to the people who survive on a hundredth of that. Count your blessings and help those who have not had such good fortune; not to the tune of whatever percentage you consider fair, but as much as you can. Do the right thing. It is the only meaningful way to “make your mark”.

An Occupy protester in an Anonymous mask. Photograph: Getty Images

Greek-born, Alex Andreou has a background in law and economics. He runs the Sturdy Beggars Theatre Company and blogs here You can find him on twitter @sturdyalex

Photo: Getty
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Who'll win the Richmond Park by-election?

There are three known unknowns that will decide the contest. 

It’s official: Zac Goldsmith has resigned as the Conservative MP for his Richmond Park seat, and has triggered a by-election there, where he will stand as an independent candidate.

Will it be a two-way or a three-way race?

The big question is whether the contest will be a three way fight between him, the Liberal Democrat candidate Sarah Olney, and an official Conservative candidate, or if CCHQ will decide to write the thing off and not field a candidate, making it a two-horse race between Goldsmith and Olney.

There are several Tory MPs who are of the opinion that, given that latitude to disagree on Heathrow has been granted to two Cabinet ministers, Boris Johnson and Justine Greening, similar leeway should be extended to Goldsmith. It’s win-win for Downing Street not to contest it, partly because doing so would put anti-Heathrow MPs, including Johnson and Greening, in an impossible position. Theresa May isn’t averse to putting Johnson in a tricky spot, but Greening was an early supporter of her leadership bid, so her interests come fairly high up the prime ministerial radar.

But the second reason not to contest it is that Goldsmith’s chances of re-election will be put in a serious jeopardy if there is a Tory candidate in the race. Everything from the local elections in May or the Liberal mini-revival since Brexit indicates that in a three-way race, they will start as heavy favourites, and if a three-way race results in a Liberal Democrat win there will be bloodletting.

Although people are talking up Goldsmith’s personal vote, I can find little hard evidence that he has one worth writing home about. His performance in the wards of Richmond Park in the mayoral election was actually a bit worse than the overall Tory performance in London.  (Boris Johnson didn’t have a London seat so we cannot compare like-for-like, but Sadiq Khan did four points better in Tooting than he did across London and significantly outperformed his general election performance there.) He did get a big swing from Liberal to Conservative at the general election, but big swings from the Liberal candidate to the Tory were a general feature of the night, and I’m not wholly convinced, given his performance in Richmond Park in 2016, that it can be laid at Goldsmith’s door.

If he wins, it’ll be because he was the Conservative candidate, rather than through any particular affection for him personally.

But will being the Conservative candidate be enough?

Although on paper, he inherits a healthy majority. So did Robert Courts, the new MP for Witney, and he saw it fall by 19 points, with the Liberal Democrats storming from fourth to second place. Although Goldsmith could, just about, survive a fall of that magnitude, there are reasons to believe it may be worse in Richmond Park than Witney.

The first is that we already know, not just from Witney but from local council by-elections, that the Liberal Democrats can hurt the Conservatives in affluent areas that backed a Remain vote. But in Witney, they barely squeezed the Labour vote, which went down by just over two points, or the Green vote, which went down by just under two points. If in Richmond Park, they can both damage the Tory vote thanks to Brexit and squeeze Labour and the Greens, they will win.

Goldsmith's dog-whistle campaign for the London mayoralty will particularly help squeeze the Labour vote, and thanks to Witney, the Liberal Democrats have a ready-made squeeze message. (In Witney, Green and Labour votes would have been more than enough to elect Liz Leffman, the Liberal candidate.)

But their good performance in Witney and Goldsmith's mayoral result may not be enough on their own.  Ultimately, the contest will come down to the big question that will decide not just the outcome in Richmond Park but the future of the Liberal Democrats.

Have the voters forgiven the Liberal Democrats for going into coalition?

We know that Brexit can help the Liberal Democrats at the direct expense of the Conservatives. What we don’t know is if Brexit is enough to convince 6,000 Labour voters in Bath to vote tactically to get Ben Howlett out in exchange for a Lib Dem, or for 7,500 Labour voters to back a Liberal candidate in Hazel Grove to defeat William Wragg.

One of the reasons why the Liberal Democrats lost votes directly to the Tories in 2015 was fear: of uncertainty and chaos under an Ed Miliband government propped up by the SNP. That factor is less live in a by-election but has been further weakened due to the fact that Brexit – at least as far as Remain-backing Conservatives are concerned – has brought just as much uncertainty and chaos as Miliband and the SNP ever would have.

But the other reason was disgust at the Liberal Democrats for going into coalition with the Conservatives. If they can’t win over enough votes from the parties of the left, we’ll know that the party still has a way to come before we can truly speak of a Liberal revival. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.