Article
Economics
Politics
1 min read

How can taxes build a better society?

As we await Rachel Reeve's budget announcement, Laurence Fletcher wonders what positive tweaks can be made to our economic system.
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Few doubt that Chancellor, Rachel Reeves, will be putting up taxes when she presents her first Budget on October 30. The political narrative of recent months has very much been of an alleged fiscal “black hole” of £22bn - or is it £40bn? - that somehow needs to be filled.

While the size of the shortfall and the identity of those responsible are both hotly disputed, and despite a lack of detail from the Treasury about what it actually consists of, the questions now being asked are not whether taxes will rise but which ones and by how much. 

Months of speculation have focused on employer National Insurance, capital gains tax and freezing income tax thresholds as areas that Reeves could look to for the additional revenue. But beyond the immediate issue of raising enough revenue to make good any shortfall, lies a deeper, trickier question about the way in which taxes should be levied for the good of society. If a government is to force people and companies to hand over their money, then what is the most ethical way to do this? Who should pay and who shouldn’t? How can tax be used to reduce inequality and build a better society?

Answering such questions is, of course, far from straightforward, because there are plenty of other factors in play.

For instance, some taxes are surely levied because they are simpler to collect. Take income tax - an unpopular measure introduced in 1799, then abolished before being reintroduced as a supposed temporary measure. It could certainly be argued that taxing people’s income - their attempt to get on in life and improve their lot in life - is less “fair” than taxing wealth that has been accumulated by someone’s ancestors years ago. Working hard and earning income is often surely a way of breaking down class divisions. But income tax - contributing 28 per cent of UK government tax take in 2023-24, according to The Institute for Fiscal Studies - has the advantage that it is relatively difficult for the average worker at a UK company to avoid it. Ease of levying it is surely a driver. 

Equally, some taxes that might seem “fairer” have deliberately not been levied because of the difficulty in collecting them, and/or because to try to do so could be counterproductive. A wealth tax, for instance, would be “economically damaging”, according to one of the UK’s highest profile tax experts, Dan Neidle. Or take the politically contentious issue of non-doms, a colonial era tax break allowing rich foreigners to avoid UK tax on overseas income. It would be fairer, the argument goes, to tax them on the whole of their income. If they are going to be resident in the UK, then surely they should be taxed like a UK resident whose home is here?

Former Chancellor Jeremy Hunt abolished this regime earlier this year but left a number of concessions that the incoming Labour government pledged to abolish. But non-doms are tax-sensitive and highly mobile, and a number of jurisdictions compete to attract them. Many are entrepreneurs and wealth creators that many countries need. Reports have suggested a clampdown could raise no money or even cost money and could drive people away.

So what can be done to use tax in an ethical way? Paul Williams, research professor of marketplace theology and leadership at Regent College, Vancouver and chief executive of the Bible Society, takes a perspective that he believes offers some solutions.

He takes as his starting point a story in the gospels, where Jesus is asked whether people should pay taxes to Caesar. The question is a trap - either Jesus gives his backing to taxation that is highly unpopular with the Jewish people, or he rejects the tax in an act of rebellion against the Romans.

Jesus replies that they should “pay to the Emperor what belongs to the Emperor, and pay to God what belongs to God.” We are to pay our taxes to those in authority, but we are also to honour God.

While Williams believes that too much emphasis is placed on the Budget and political parties’ promises to be able to fix everything, and that a more radical rethink of our economy is required, he also sees room for positive tweaks to the current system.

One key area is the property market, the manifestation of so much inequality in society, with some people owning multiple houses while others cannot afford to buy one. Williams argues that the ready availability of debt finance has allowed those who already hold assets to easily acquire properties, turning real estate into an investable asset class to the detriment of many of the poorer in society.

“The reason there’s so many homeless people and empty houses is due to debt finance. It makes it easy for a relatively small proportion of the population to acquire a large percentage of the assets.

“The system has allowed a structure in which a small advantage in the beginning can lead to big, big differences over time.”

Williams highlights parts of Devon and Cornwall that have been “completely ruined” by wealthy people from elsewhere buying second homes that used to belong to locals, leaving property out of reach of anyone who lives and works there.

Nevertheless, he believes taxation can be used in this area to help level the playing field.

He proposes a “pretty punitive” marginal rate of tax on ownership of more than one home. (Stamp duty only partly does the job and is a blunt instrument also affecting people moving homes, thereby makes mobility expensive).

“You want to disincentivise the way the housing market is used for speculation,” he says.

“Housing is being treated as a commodity. The problem is, it’s not; it’s not just an asset. It has utility value and a communal and quasi-spiritual value, enabling people to feel rooted.”

Buy-to-lets, meanwhile, are better than having empty second or third homes, but “wouldn’t it be better if occupiers could buy that house?” he adds.

Meanwhile, research by the Financial Times recently found a huge wealth gap between the average millennial and the top 10 per cent of millennials, who are benefiting from family wealth to accumulate substantial housing assets. 

So would increasing the rate of inheritance tax - one of the most hated of taxes - and/or lowering the threshold also help reduce some of this inequality? After all, how is it fair that one child in the UK is born to inherit large property wealth while another is born to inherit little or nothing? Or, even worse, that second child will only ever be able to afford to be the tenant of the first, paying them rent for the rest of their lives? Williams is not a fan of inheritance tax per se, arguing that it is “not part of the package” in a Biblical image of a flourishing economy. But he adds an important caveat: “the playing field is not level".

“There might be circumstances to impose a one-off tax on the very wealthy… if you want a transition to a more equitable society.”

Such steps are not easy to take. It is, he admits, probably “career suicide” for a politician to adopt such views. But if we are to take steps towards a fairer way of life, and avoid a two-tier society in decades to come, then maybe the conversation needs to shift this way. Perhaps the Budget could be the time to start.

 

Explainer
Belief
Community
Creed
Politics
7 min read

The peripheries of belief: how faith shaped the north’s identity

Northern spirituality’s rebellious capacity to adapt is still in play today

Tom Rippon is Assistant Editor at Roots for Churches, an ecumenical charity.

Dark clouds over Durham Cathedral
Durham Cathedral and town.
David Connor on Unsplash.

2025 has so far been the year of the north. At its start, we were treated to the plasticine escapades of Wallace and Gromit, whose unabashed northern-ness was enough to faze American TV executives. Then in April, the story turned to northern industrial decline when Scunthorpe steelworks hit the headlines, prompting last-minute state intervention. In May, the local elections saw the astonishing rise of Reform across areas previously dominated by Labour. Taken together, these three moments encapsulate the range of associations often evoked by life on the periphery of England: regional pride, good-natured humour, close communities, economic precarity and hard graft. 

The north is a landscape of contraries and co-existence, where sweeping fells and dark skies meet red-brick chimneys and rolling waves of terraced houses.   As David Barnett puts it, it is “a place made up of individuals, bound by an ethereal quality that is at once a myth and, conversely, as real as grit and graft.’  

Hard to pin down, yet real once seen, the same could also be said for the faith that has filled the region with a multitude of expressions to this day. 

Of course, when we talk about ‘the north’, we mean everything and everyone from the conurbations of Merseyside and Greater Manchester to the Lake District and Northumberland, where centuries of border warfare have left a plethora of castles and fortified houses (‘pele towers’). Two landscapes dominated by buildings which have long lost their original purposes. Perhaps the principal shared characteristic of these communities is a sense of distance from mainstream political and cultural life (just try catching a train that isn’t heading to London). But with distance comes an independence of identity and a proud sense of cultural distinctiveness.  If anything, the only thing that can be definitively said about northern identity is that it is the quality of being ‘not southern’.   

Northern Christianity has not escaped this wavering relationship with the south.  In 664 AD, the Northumbrian Church gathered at Whitby for a meeting presided over by King Oswy of Northumbria and the Abbess Hilda of Whitby.  It was quite literally a pivotal moment for the early Church and the north more widely.  The matter at hand was whether Northumbrian Christianity, then centred on the Holy Island of Lindisfarne, should remain orientated towards Celtic Christianity, which had as its principal focal point the abbey of Iona, or whether to turn towards Rome and its growing mission in the south, headquartered in Canterbury.  North or south?  Canterbury or Iona?   

In the end, the group opted for closer links with the Roman Church.  Yet the Christian faith in the north remained distinctive, blending the older influences of St Columba and St Aidan with the new ones coming up from the south.  Lindisfarne Priory remained a centre for Christian life in the north and its prestige led it to accumulate the wealth that eventually precipitated its own destruction by Viking raids in 793 AD. In spite of this, the northern saints drew reverent pilgrims for centuries to come, as the grandeur and scale of Durham Cathedral, the burial place of St Cuthbert, testifies to this day. 

Behind the independent northern spirit lies a long history of political, economic and spiritual divergence from the south. Northern spirituality is characterised by a sustained distinctive flowering of the Christian faith that intertwines itself with the social identity of the peoples and places of the north.  The region’s response to the religious reforms of Henry VIII was the Pilgrimage of Grace, which protested both his break from the Roman Catholic Church and socio-economic policies implemented by the king and his chief minister, Thomas Cromwell.   

By the seventeenth century, faith in the north had taken on a distinctly reformist hue as non-conformism – that is, churches and sects not aligned with the Church of England, the Church of the state and the establishment – flourished in the region. The beginnings of the Quaker movement can be traced to an open-air sermon given by the reformer George Fox in 1652 on Firbank Fell, near Sedburgh in modern Cumbria - the crag he spoke from is still known as Fox’s pulpit - while other reformist movements, including Methodism, Congregationalism and Presbyterians, also drew increasing crowds with their passionate preaching in fields, moors and disparate farming communities. 

The very landscape of northern England, often challenging and remote, drew its inhabitants away from both socio-political centres and the established Church, nurturing forms of belief in the seventeenth and eighteenth centuries which were as independent as those of seventh- and eighth-century Northumbria. Much of religious life in the region was organised around a large parish church that served numerous small communities spread across a large area.  Living at such distances, no wonder people felt a disconnect from the parish church and the national Church it represented. Non-conformist chapels and meeting houses quickly spread across the landscape, particularly in remote villages outside of the control of major landowners and Church authorities. As David Petts argues, the building of chapels expressed the collective economic and organisational independence of rural labourers and miners, and united dispersed communities through collective endeavour. 

The region has proved itself capable of delivering considerable shocks to the London political establishment. 

Once the chapel was built, they would prove valuable training grounds for rethinking the political organisation of the poor; the significance of non-conformism thus lay not only in its spiritual divergence from the establishment, but also in its fostering of alternative political systems. Methodism in particular was to provide an ideological and practical template for mass movements such as Chartism, which campaigned for social reform and an expansion of democratic suffrage in the mid-nineteenth century. Chartist campaigners called themselves ‘missionaries’ and crisscrossed the country preaching ‘the gospel of Chartism’ and forming Chartist congregations. Their political vision found a receptive audience in the working population of the industrialised north, who were raised on the non-conformist emphasis on Christ as the carpenter’s son and a poor man, one who worked for his living as they did. Towards the end of the nineteenth century, the non-conformist social Gospel produced notable reformers such as the journalist W. T. Stead, born  in rural Northumberland as the son of a Congregationalist minister, and the Quaker confectioner Joseph Rowntree of York. 

Amidst the darkness, grime and crushing conditions of nineteenth-century mills and mines, the Christian message of mutual aid and fellowship, first articulated by the early Church, again found expression. In Manchester, the Methodist Central Hall served a dual purpose, providing a space for worship on Sundays and a community space during the week, when it offered libraries, food, clothing, shelter, childcare and even entertainment to the people of the city. 

Social reform and the Christian faith buttressed one another across the region and together resisted the fractures, pressures and degradations that industrialisation exerted on the communities they served. The social values of these interdependent movements left a lasting impact on the modern political landscape of the region, until recently known as Labour’s ‘Red Wall’. As any political correspondent will tell you, northern politics can no longer be taken for granted and the region has proved itself capable of delivering considerable shocks to the London political establishment.  Walking through these communities, left behind by deindustrialisation, globalisation and our periodic post-crisis recoveries, the air seems pervaded by a sense of unravelling as the old bonds and certainties slowly slip-away. The Church is not immune to these processes and the north follows the overall national trend of declining church attendance. The empty chapels testify as much to the seismic shifts taking place in the region as the empty warehouses and factories. 

But if the history of Christianity in the north tells us anything, then it is that northern spirituality has never stood still. It has an ingenious capacity to adapt, to regenerate itself to meet the challenges faced by each generation. The challenges are varied and specific to each community, but the Church is there. In Burnley, the fight of the early disciples against urban poverty is echoed in the work of the Church on the Street, whilst on Holy Island itself, the Parish Church of St Mary the Virgin is a driving force behind the Holy Island 2050 project, which aims to assure the sustainability of the Island community in the face of depopulation and rural precarity. 

If the dominant atmosphere in the north is one of feeling left behind, then the Christian call to reach out to those around us is needed more than ever. More than one thousand years separate St Aidan from us, but the Christian faith can still help the us to navigate the challenges and precarities of a changing world.

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