The FT ran a long interview with Gus O’Donnell last week, saying that ‘a UK wealth tax is more likely than ever because of the reordering of politics caused by the coronavirus pandemic.’ Several other public figures have also discussed the impact on inequality from COVID-19, accelerating an existing problem.

O’Donnell, the former cabinet secretary under David Cameron, Gordon Brown, and Tony Blair, is quoted in the FT as saying:

You’ve got a Conservative party and prime minister talking about the red/blue wall. How to get to the forgotten man. We’re talking about FDR [Franklin D Roosevelt]. One nation conservatism. Lots of different things suggest to me that there might be more of an appetite for [a wealth tax] than you might have thought.’

Labour would follow, of course, freed of the label of being socialist, O’Donnell opined.

Calculating the impact on business value caused by a recurrent net wealth tax raises some interesting theoretical challenges, and the decrease would be less than upward adjustments in taxes from private investment. Suffice to say, during these current debates, a wealth tax would influence returns expectations.

Private UK wealth, in absolute money terms and relative to income, has risen sharply, and the current ‘levelling up’ spending program demands new ways to raise revenue. Time will tell.