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Royalty

24 April 2023

5 min read

What a monarch’s meeting teaches about politics and permanence

A monarch meeting a prime minister is a symbol of a deeper truth in a fleeting world.

Graham Tomlin

Graham is the Director of the Centre for Cultural Witness and a former Bishop of Kensington.

A frail old lady, the late Queen, rises from a sofa to shake hands with an approaching woman.

The longest serving monarch meets the shortest serving prime minister.

The Royal Family.

Just about the last constitutional act of our late Queen was to give an audience to Liz Truss, the (temporary as it turned out) Prime Minister and to ask her to form a government. The pictures of a frail but smiling monarch, weakened, but still doing her job, couldn’t help but evoke a mix of admiration and affection, especially when we look back and consider that this was just two days before she died.

But those pictures raised some questions. A Prime Minister, and a political party that forms a government, is normally chosen by the people. Queen Elizabeth was not. Neither is King Charles. She was, and he now is, our monarch by virtue of birth, something that can seem scandalous to republicans, and even to many who liked the Queen, or admire the King as decent people, but have their doubts about the monarchy. To our democratic instincts, it feels, at least to some, distinctly odd, a relic of a hierarchical past, a hangover from a less enlightened age.

But perhaps something more significant was hidden in that act. The idea of a constitutional monarch – a figure whose position is out of our hands, as it were – formally asking a politician to form a government - acts as a reminder to us that the will of the people is not the last word, or even the first word. It tells us that, important as democracy is (‘the worst form of government except for all those other forms that have been tried from time to time’, as Winston Churchill famously put it), there is an order, an authority that stands above and beyond the will of the people. When it has worked well, the monarchy, a source of rule above that of people and parliament, has always been a symbol and pointer to a divine authority that can work through, but essentially stands above all human government.

Because, of course, ’the will of the people’, and governments that claim to enact the will of the people, sometimes get things badly wrong. History, even that of democracies, is littered with tales of nations that have elected bad governments, or regimes that went on to enact a rule of terror in the name of ‘the people’, or where a majority has oppressed minorities. Republics of various kinds have ended up as oppressive and authoritarian. Even Hitler was elected in the first place.

That a Prime Minister only governs at the pleasure of the Monarch is a reminder of a deeper truth - that all governments are subject to a higher accountability.

Of course, there are good monarchs and bad ones. For most of our lives, those of us who live in the UK are fortunate to have had a very good monarch in Queen Elizabeth, and we hope and pray Charles will prove to be one too. Bad monarchs, whose personal failings and moral selfishness betray the office they hold, blur the picture. They tell a different story, that authority is in itself abusive, oppressive and not to be trusted. But at its best, the continuous institution of the monarchy has served as an anchor for us, pointing away from itself to an unchanging divine presence in the course of history. The fact that a Prime Minister only governs at the pleasure of the Monarch is a reminder of a deeper truth - that all governments are subject to a higher accountability, to a moral law they did not invent, a law that tempers justice with mercy, that our lives are subject to a deeper and more lasting reality than the shifting sands of politics or times and that there is an even higher loyalty than that which we may have felt to our late Queen, or to our democratic political system.

At the coronation, King Charles will be presented with an orb – a symbol of the world with a cross perched on top of it. It is a sign that ultimate power in this world belongs not to the King, or even the people, but to God. It is a reminder to the King, and to us, that he (and we) are accountable to an authority that stands beyond our own desires, or even the general will of the people. It is an authority represented by a cross – the symbol of love and self-sacrifice for the good of our neighbour, or even our enemy. It is one of those valuable reminders that stops any ruler from starting to think he can become a despot.

As our constitutional system has evolved, it is the custom that Monarchs don’t get involved in the nitty-gritty of politics and it’s vital that they don’t. That is left, quite properly, to the crucial hard work of democratically elected government and politicians, who have to get on with the important but messy business of governing, working out what to do about the cost of living crisis, how to respond to conflict in Ukraine, or how to respond to those fleeing to our shores from war-torn or poverty-stricken parts of the world.

The monarchy is a symbol of ultimate permanence, not the source of that permanence

Over past decades, Queen Elizabeth kept to this custom. She avoided expressing opinions on particular political issues and disputes because that wasn’t her role. Her role was to be a reminder that there is an order of things beyond the temporal, a moral structure to the world that is just given, not created by us, a structure that tells us that compassion, truthfulness, integrity, justice and honesty matter in all the calculations and compromises of political decision making.

The Queen’s death removed something steady and sure from our lives, as most of us have never known another monarch. Her death shook our sense of permanence, as the Archbishop of Canterbury put it at her funeral. Many of the vox pops we heard during the period of mourning pointed to that longing for permanence, the sense she gave of something enduring and reliable. Yet she was a symbol of ultimate permanence, not the source of that permanence.

As King Charles is crowned, he becomes a pointer to the unshakeable and steady presence that surrounds us, upholds us and all things - the God that Christians see revealed in Jesus Christ. Queen Elizabeth understood that and showed it in her own faith – the one aspect of her personal life that she was quite open about. And there are signs that King Charles understands that too. Faith in that God is meant to be the foundation of a monarch’s rule. It can also provide a sure foundation for our individual and less public lives too, a sense of permanence in the changes and chances of this fleeting and unstable world.

Explainer

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Economics

29 October 2024

6 min read

How to tax ethically to avoid a two-tier society

From income tax to property and inheritance taxes, which is fairer?

Laurence Fletcher

Laurence is a journalist at the Financial Times.

Sarah Agnew on Unsplash.

Few doubt that Chancellor Rachel Reeves will be putting up taxes when she presents her first Budget on October 30th.

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.

“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.”

Paul Williams

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 Biblical perspective that he believes offers some solutions.

He takes as his starting point a story from the gospel of Matthew, 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, he says, “completely ruined” by wealthy people from elsewhere buying second homes, 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 said.

“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.