Cutting the income tax for people earning more than £1m per year has deprived the Exchequer of more than £8.6bn over the past five years, according to new analysis by UNISON published today (Sunday).
The April 2013 decision to cut the top rate of income tax from 50p to 45p has also saved the richest people in the country hundreds of thousands of pounds in that time, while public sector workers haven’t had a decent pay rise in years, says the union.
An examination of HM Revenue & Customs (HMRC) statistics by UNISON shows that in the five years since the then Chancellor, George Osborne, introduced the tax cut, there have been between 15,000 and 17,000 taxpayers with annual incomes in excess of £1m.
UNISON’s analysis finds that the government’s tax cut has meant £8.6bn less in the Treasury coffers since 2013, allowing the UK’s super earners to pay on average more than £554,000 less in tax over the five-year period.
UNISON has identified a number of examples of how this ‘lost’ £8.6bn could instead have been spent on public services:
- The £8.6bn could have funded every year for five years an extra 20,000 nurses, 10,000 extra police community support officers (PCSOs), 10,000 extra police officers, and 20,000 newly qualified teachers.
- It could have paid for 60,000 bursaries for nurses, midwives and other health professionals, for 10,000 extra nurses, 10,000 extra PCSOs, and 10,000 newly qualified teachers – every year for five years.
- An extra £8.6bn in Treasury coffers could have meant an additional £1.7bn to put into social care every year since 2013.
UNISON general secretary Dave Prentis said: “It’s downright disgusting that public services have lost out on billions of pounds, while the richest in this country have benefitted handsomely from the government’s tax policies.
“The old refrain that there is no money for public services has a hollow ring given the revenue the government could have raised, had it not been more interested in giving the country’s millionaires a huge tax cut.
“This £8.6bn could have paid for thousands more nurses, teachers and police community support officers at a time when the increasing pressure on public services is repeatedly being blamed on staff shortages.”