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Last Updated: Sunday, 7 November, 2004, 04:14 GMT
Call for tax on the super rich

Geoff Mulgan
Geoff Mulgan is worried about the rise of the super rich

The government should consider raising the top rate of income tax to 50 per cent, the former head of policy at the Prime Minister's Office has said.

Geoff Mulgan, who was in charge of the policy directorate at Number 10 until earlier this year, told the BBC's Panorama programme that the top earners in the country seem to be getting more influential.

He said the government should be worried about this rise of a super-rich, elite class in Britain - and suggested that a 50 per cent top income tax rate might help combat the problem.

Mr Mulgan's comments came in a Panorama documentary - "Winner Take All Britain" - which will explore the rise of a high earning elite in Britain. The programme is due to be broadcast this Sunday at 10:15pm.

The top one per cent of earners in the UK currently account for 13 per cent of earnings, more than double the figure when Mrs Thatcher came to power.

There are now more than 475,000 people in Britain who earn more than 200,000 a year.

Backlash

It's a very short-sighted approach to tax people with money
DeAnne Julius, economist

It is figures like these, and the influence that the high earners may have on both politics and the spending habits of the public, that worries Mr Mulgan,

He said: "The top one per cent of the population seem to be getting richer and richer."

"They also seem to be becoming more and more powerful in politics and probably also more influential in our culture."

"We're also seeing people lower down the scale trying to keep up with the spending and lifestyle patterns of the very rich and finding they can't do that and therefore getting deeper and deeper into debt."

Mr Mulgan, now Director of the Institute of Community Studies, believes that the rise of the cult of celebrity has protected the super rich from a backlash over their wealth.

He said: "In the past where there's been a big surge in the power and wealth of the very rich, people have become envious, they've turned to politics or often sometimes it's turned to rioting."

"What's surprising about the last 10 or 20 years is that hasn't really happened and I think part of the reason maybe the rise of a celebrity culture."

Short sighted

Mr Mulgan said that action may have to be taken to curb the growing gap between the super rich and everybody else.

He said: "It's actually proved easier to improve the lot of the relatively poor groups in societies than it has been to reign in the runaway super elites.

"There are things which can be done, whether a 50 per cent rate or a 60 per cent is the key I think is a matter for debate."

But DeAnne Julius, who used to sit on the Bank of England's interest rate setting Monetary Policy Committee, told the Panorama team that raising taxes would be a bad idea.

She said: "The particular success of the high-earning one per cent is something that in many cases we should be pleased about."

"It's a very short-sighted approach to tax people with money, to tax them heavily because these are also usually the most mobile people.

"The question really then is does the winner take too much, and I think that's really a question of envy. Envy is a very destructive emotion. Individually, personally, but also for a society."

Panorama: Winner takes all Britain will be broadcast on Sunday, November 7, on BBC One at 22:15 GMT.



SEE ALSO:
Winner takes all Britain
02 Nov 04 |  Panorama
High earners at a high price?
07 Nov 04 |  Panorama
10 facts: The super rich
07 Nov 04 |  Panorama
Britain's elite earners
07 Nov 04 |  Panorama
The one per cent shopping list
07 Nov 04 |  Panorama
The 'superstar' effect
07 Nov 04 |  Panorama
Your comments
07 Nov 04 |  Panorama


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