WELBY WEALTH TAX STORM

Archbishop calls for £9bn inheritance ‘super-tax’ to fund £10k handouts to the young He wants to hammer Amazon and Starbucks And demands watchdog to curb online bullies

WEALTHY families should pay more tax to help the poor, the Archbishop of Canterbury declares today.

In a major intervention sure to spark controversy, Justin Welby says he wants to rake in an extra £9billion a year with a shake-up of inheritance tax.

Multinationals who dodge their dues would also be hit. Proceeds would fund a higher minimum wage and pay for £10,000 handouts to help the young buy homes.

The recommendations come in a report – co-written by the Archbishop – that says Britain’s economy is broken. Demanding radical action to reduce ‘damaging wealth inequality’, its key proposals include:

Higher capital gains tax and taxes on dividends – netting up to £27billion a year; A £13billion-a-year corporation tax hike; The creation of a £186billion ‘Citizens Wealth Fund’ by 2030.

The report, drawn up by the Left-leaning Institute for Public Policy Research, calls for inheritance tax to be scrapped and replaced by a gifts tax.

An individual would be able to receive £125,000 over their lifetime – with any further gifts subject to income tax. The taxfree threshold for an entire estate is currently £325,000, or £650,000 for a couple.

The report points out that many families avoid death duties by exploiting a rule that allows gifts to become tax-free after seven

years. The Archbishop is also demanding a ‘backstop tax’ to make multinationals such as Starbucks and Amazon pay more tax on their profits.

In his article for the Mail, the Most Rev Welby writes: ‘We cannot continue with an economy that works so badly for so many. Chronically low pay means a hard day’s work no longer keeps people out of poverty: today, a majority of the poor are working families.’

It is, he says, ‘particularly hard for young people, many of whom are set to be poorer than their parents, unable to find secure work and with little prospect of getting on the housing ladder’.

The Archbishop adds: ‘The wealthiest 10 per cent of households own more than 900 times the wealth of the poorest 10 per cent, and five times more than the bottom half of all households combined.’

He says it is ‘an obvious injustice that income from work is taxed at a higher rate than income from capital gains or share dividends’.

All income should be taxed on the same basis just as it was under Margaret Thatcher, he says.

Using his faith to justify his proposals, the Archbishop writes: ‘As a Christian I start with learning from Jesus Christ that people matter equally, are equally loved by God, and that justice in society matters deeply – a theme that runs throughout the Bible.’

The Citizens Wealth Fund would be financed with £90billion income from the new ‘lifetime gifts tax’ over ten years, £57billion in proceeds of planned state asset sales such as RBS, income from the £11billion Crown Estate and other sources.

It would give 25-year-olds a £10,000 ‘universal minimum inheritance’ to get on the housing ladder or start a business. It could also provide all citizens with a small annual dividend. The report suggests giving English regions – as well as Scotland, Wales and Northern Ireland – the power to set their own immigration levels.

It calls for a ‘global talent visa’ to give the brightest immigrants a fast track to a British passport, for German-style worker directors on boards and for more bargaining power for unions.

Former Tory Cabinet minister Nicky Morgan said last night that the report’s calls for higher taxation would concern some Conservatives, but deserved to be taken seriously. ‘I agree that greater fairness is required in the way the economy is run and there is a big appetite for finding ways to achieve that,’ she said. ‘But we need to think hard before approving big tax rises.’

Miss Morgan, who chairs the Commons Treasury select committee, added: ‘Our aim should be to make the whole nation wealthier.’

The IPPR insists the proposals would not reduce Britain’s competitiveness.

‘All the evidence is that a fairer economy is a more productive and happier one,’ it says. ‘Countries like Denmark, Sweden and Norway have high tax rates and yet come top in surveys of wellbeing and life satisfaction.

‘Britain feels split along old dividing lines – gender, class, income, geography or ethnicity – and new ones: the generational divide, attitudes to immigration and whether we voted to leave or remain in the EU.

‘The UK economy needs fundamental reform. We cannot muddle through.’

The think-tank called for a ‘more active and powerful state to produce prosperity and justice’ without resorting to central planning or state control.

‘We cannot muddle through’