Revealed: Tory tax cuts for the rich have cost the UK £8.6bn in lost revenue

It’s not been austerity for everyone in Britain for the last five years — millionaires have prospered under tax cuts from the government and it’s been at our expense.

Tax cuts for millionaires introduced by George Osborne have cost the Treasury more than £8.6billion over the past five years, new figures show.

Around 17,000 people on salaries over a £1m a year have enjoyed a tax cut worth nearly £10bn over the past half decade, after the chancellor cut the top rate of income tax from 50p to 45p in 2012.

Individuals on salaries over a million a year have paid on average £554,000 less tax over the five-year period, new analysis of government figures by UNISON shows.

In 2012, George Osborne justified cutting the 50p rate of income tax saying it raised “next to nothing”. Today, we see the true extent of what it did raise and can see the lie for what it was: a helping hand for his mates and Tory backers and austerity for everyone else.

There are currently 17,000 people in the UK earning more than a million pounds a year registered to pay tax, and the figure’s increased by 2,000 since 2013.

In the context of the Paradise Papers, it’s worth questioning how many more millionaires reside in the UK but pay no tax at all — in terms of lost tax revenue, UNISON’s findings are probably just the tip of the iceberg.

The tax cut for the superrich few comes whilst public sector workers haven’t seen a pay rise in five years, wages across the board stagnate and the UK population suffers the effects of cuts and austerity.

UNISON gave some examples of where the missing £8.6bn could have been spent, including:

• An extra 20,000 nurses, 10,000 extra police community support officers, 10,000 extra police officers, and 20,000 newly qualified teachers each year.
• 60,000 bursaries for nurses, midwives and other health professionals, for 10,000 extra nurses every year for five years.
• Or 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”, adding:

“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.”

The revelation of this £8.6bn lost by the exchequer and pocketed by millionaires is an especially clear example of the hypocrisy of Tory austerity: tax cuts for the rich directly at the expense of public services. At the beginning of Budget week, it’s another blow for Tory fiscal legitimacy.