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date: 26 November 2008

embargo: For immediate release

Pre-budget report must be a first instalment in wider tax reform plan

TUC General Secretary Brendan Barber will call on the Government to build on the tax proposals in the pre-budget report to create a fairer tax system, in a speech at Salford Business School today (Wednesday).

Addressing the Salford Business School annual lecture, Brendan Barber will welcome the proposed changes to personal allowances and the introduction of a new 45 per cent tax rate for those earning over £150,000.

But he will urge the Government to be even bolder and bring in much needed revenue by clamping down on the various tax loopholes that are exploited by the super-rich, and introduce new minimum tax rates for those earning over £100,000.

Brendan Barber will say: 'The Chancellor's announcement signalled a fundamental shift in the political debate in the UK - breaking the taboo that the richest one per cent of the population should never pay more tax.

'But now that the Government has been made this breakthrough, it must be even bolder and further ease the tax burden on low to middle income earners by making the super-rich pay their fair share of tax.

'The recession has brought home the growing sense that the super-rich haven't been playing by the same rules as the rest of us.

'In 2006, the 54 billionaires in Britain paid just £14.7 million in tax on a combined £126 billion fortune. That's an effective tax rate of little more than 0.1 per cent.

'This is not just morally unacceptable, but economically untenable.

'Indeed TUC research suggests that tax avoidance by the super rich, the city and UK plc is costing the Exchequer around £25 billion a year.

'We want to see a more determined crackdown on the tax loopholes by those in the know.

'The Government must also ensure that the tax proposals in the pre-budget report generate significant revenue. Because there is a risk that once again the super-rich will find new ways to avoid paying their fair share. They can do this by introducing a minimum tax rate of 32 per cent for those earning over £100,000, rising to 40 per cent for those earning over £200,000.

'The Government must follow through on its own logic on tax and lay the foundations for a more stable, more sustainable economy. And make Britain a fairer, more equal, more just society in the process.'

NOTES TO EDITORS:

- Brendan Barber will be addressing the Salford Business School annual lecture ay 5.30pm today (Wednesday).

- The TUC believe that a minimum rate of tax - which should start at 32 per cent for those earning between £100,000 and £150,000 and rise to 40 per cent on salaries of more than £200,000 - would not increase any tax rates as higher rate tax is already 40 per cent. A minimum tax rate would merely limit the benefit that well-off people could claim from tax allowances.

- Further info on the minimum tax rate proposals is available from the TUC touchstone pamphlet Do the Super-Rich Matter? downloadable at www.tuc.org.uk/extras/touchstonesuperrich.pdf

- All TUC press releases can be found at www.tuc.org.uk

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Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (600 words) issued 26 Nov 2008