‘Cost-of-greed crisis’: Opposition councillors urge Town Hall to back ‘immediate’ wealth tax

Green co-leader Zoë Garbett argued that there is ‘plenty of money in our economy’. Photograph: Hackney Greens

Opposition groups have demanded that Hackney Council lobbies the government to “immediately” tax the wealthiest in society.

Ahead of last week’s full council meeting, the Green group submitted a motion asserting that the borough’s residents—and the rest of the country—are still reeling from years of austerity.

They called for the Town Hall to write to Prime Minister Keir Starmer and Chancellor Rachel Reeves to urge “an immediate introduction of a national wealth tax on the richest one per cent”.

If an annual one per cent tax was levied on assets above £10 million, and two per cent on assets above £1 billion, “only a tiny minority of people would pay”, the motion stated.

The demands came on the same day as Mayor of Hackney Caroline Woodley telling the public that the Town Hall needed to save £67 million over the next few years, due to significant pressure on the council’s coffers.

Hackney’s finance chief Cllr Robert Chapman revealed last Monday that the borough’s predicted overspend for the current financial year has ballooned to £38 million due to the spiralling costs of vital services like temporary accommodation.

In October, the council said it anticipates it will have spent £28 million on sheltering homeless residents by the end of 2024 — a tenfold increase in two years.

Although the Chancellor’s budget set aside “much-needed” additional funding for local government, the restraints on the Treasury were “severe” and a “serious problem” for Hackney’s accounts, Cllr Chapman said.

He also warned that if the pressures did not abate, the Town Hall may need to apply for a government bailout in the future, as 19 other councils did earlier this year.

In light of the borough’s worsening situation, the mayor warned that while frontline services such as social care would be fenced-off, “we will need to take some very tough decisions as we work to balance our budget”.

But sceptical opposition members argued that axing council services was not only harmful but unnecessary.

Cllr Penny Wrout, the Independent Socialist and former Labour member who crossed the chamber floor earlier this year, lambasted both her former colleagues’ “complacency” and the leadership’s framing of the borough’s financial woes.

“For heaven’s sake — can we stop talking about ‘savings’ and start talking about cuts?” she said.

“We know most of the people on the Labour benches don’t want to make these cuts. You’ve told us you don’t want to make cuts for years when the Tories were in power.

“So why are you so complacent when the Labour government forces you into this position?

“There is a clear alternative — and I’m sure the majority of you agree: a wealth tax on the richest.

“We need you, our local authority, to push your own government to stop robbing residents and vital services, and instead ask for the top one per cent to make a proper contribution.”

Cllr Alastair Binnie-Lubbock, the Greens’ co-leader, said his group “will not be silent” in the face of “the continuation of brutal austerity”.

He said the Greens had heard concerns from local charities Hackney Quest, The Crib, the borough’s Youth Parliament and others about cuts to youth services in particular.

The council had a “tendency to focus on punitive responses to social issues rather than provide preventative services”, he added.

Mayor Woodley said: “In my experience on this council, our relationship with central government has never been as good as it is now. They are listening.”

She assured that the Town Hall was lobbying the government for more freedom over policy areas such as education, but she did not directly address calls to back a wealth tax to stave off cuts to services.

The mayor also hit back at accusations that the council had failed to invest proactively.

“I find it extraordinary to hear [Cllr Binnie-Lubbock] talk about our lack of investment in preventative services when it’s absolutely our bread and butter.

“Hackney Youth Parliament wouldn’t exist if we didn’t have that commitment, and of course we are always in dialogue with them.”

She added that deputy mayor Cllr Anntoinette Bramble was “constantly hanging out with the young people”.

The Greens’ motion also petitioned the council to push the Prime Minister to tell HMRC and the Office for National Statistics (ONS) to “collect better data” on high-wealth individuals to help inform policy, including how taxing wealth could address poverty “fairly” across the UK.

The submission highlighted an ONS survey showing that the wealthiest 10 per cent of individuals in Britain were estimated to hold around half of all the nation’s wealth — mainly in the form of property and private pensions.

In 2019, the ONS ranked Hackney as the 19th most income-deprived local authority in England.

In a press statement, the Greens’ co-leader Cllr Zoë Garbett blamed years of “decimated” public services for leaving thousands of people in temporary housing, drawing out waiting times for social care and shredding funding for youth provision.

“The Labour government says there’s no money left and is set to continue with the austerity of the previous Conservative government,” she said.

“There’s plenty of money in our economy. Hoarding wealth in assets impinges on a fair economy. The cost-of-living crisis is a cost-of-greed crisis — we need to redistribute wealth.”

Cllr Liam Davis (Green) also demanded the council explains how much of its projected deficit is still “unaccounted for”.

Garbett rebuked the notion that the richest individuals would leave the UK if the government levied a tax on wealth.

She argued that a majority (68 per cent) of asset-rich millionaires in fact support the policy.

A survey from YouGov in January last year found that three quarters (73 per cent) of Britons would support a two per cent tax on wealth over £5 million, while an even greater number back a one per cent on wealth over £10 million (78 per cent).

In October, a dozen Labour MPs co-signed a cross-party call for a tax on “extreme wealth”.

Having run out of time to debate the Greens’ motion, the council resolved to discuss it as the next “ordinary” full meeting — currently scheduled for 29 January 2025.