Well, that’s the message tonight from Alistair Darling in his Mansion House speech – and to be fair there is a point in what he was saying about the dangers of getting into an inflationary wage-price spiral. We all need to tighten our belts.
But, and the but is all-important here, there are ways to do this that are fair and ways that are not. In particular, there is no better time than now to rejig the tax system to ensure the burden of taxation falls on those who most deserve to pay: the rich.
My modest proposal:
1. An increase in personal allowances to take everyone on £10,000 a year or less out of income tax altogether.
2. Introduction of new top-rate income tax of 60 per cent for everyone earning more than £60,000, 80 per cent on £80,000-plus and 100 per cent on £100,000 or more.
3. Standardisation of national insurance rates so everyone pays the same percentage on every penny of income above £5,000.
4. An end to all non-dom privileges.
5. A council tax revaluation with abolition of bands and a straightforward proportional relationship between value and payment, so households in £10m homes pay 100 times what a household in a £100,000 home pays.
6. Abolition of inheritance tax up to £500,000 and introduction of 100 per cent inheritance tax over £1m.
So footballers would whinge and plutocrats would quit London? Pah! If we’re talking austerity it’s got to be shared, as I'm sure Sir Stafford Cripps would have said.