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Exclusive: 'red wall' voters want fairer not more punitive taxes – study

<span>Photograph: Paul Ellis/AFP via Getty Images</span>
Photograph: Paul Ellis/AFP via Getty Images

Former Labour voters in “red wall” seats want to see Boris Johnson “level up” by closing tax loopholes, making pension relief rates fairer and increasing capital gains tax, according to research.

As the new chancellor, Rishi Sunak, thrashes out the final details of any potential budget, the survey by Tax Justice UK and Survation of former Labour voters in the seats of Blyth, Wrexham and Bury North found they support modest tax hikes to make the system fairer but outright reject attempts to take money from the modestly well off and even from billionaires.

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The new respondents also wanted immediate public investment in their areas, researchers found.

The report released on Monday suggested any action by the government to close loopholes at the budget would be positively received. That includes remedying the situation where someone who lives purely off dividends from shares pays a lower rate of income tax than someone who is working.

One of the dozens of new Tory voters surveyed said: “Why should someone who is working hard to stay on the breadline pay more tax than someone who makes all that money from shares.”

Robert Palmer, head of Tax Justice UK, said the overwhelming message the researchers got from the ex-red wall seats before the budget was that those who make money from assets and wealth should pay the same as working people.

He said: “Boris Johnson has made a whole lot of promises to these new voters in red wall seats in discussions around levelling up the country and they have expectations around public services. Spending expectations are quite high. In some places like Blyth they want to see change very quickly – some saying even within a matter of weeks.

“They also want to see the closure of tax loopholes and making things fairer. The reform that went down best was making sure different types of income is taxed at the same level. Taxing work at the same level of people earning from shares … people really wanted that.

“One of the other findings is that aggressive anti-wealth language went down seriously badly. Interestingly, no one was calling for tax cuts.”

Researchers also found that views on tax and wealth in ex-red wall seats and in the wealthier south-east England, which was also part of the survey, have effectively converged.

Manifesto promises of higher taxes for millionaires and billionaires that made up a bulk of Labour’s messaging during the 2019 general election went down particularly badly. Many of those surveyed said they thought they deserved their wealth.

One woman interviewed in Wrexham said: “If you have worked hard you are entitled to it.”

Another person in the same group said: “It is not down to millionaires to sort out issues with poverty. They might be able to explain to people how to do things.”

There was little appetite for reforming council tax. While respondents said the current system is outdated, they expressed concern that any new banding might shift their homes into a higher bracket.

The idea of changes to pension tax relief – which has already been floated by the government as an area of reform in the upcoming budget – were received positively in the research.

One plan that may be under consideration by the government is the introduction of a flat rate of pension tax relief set at 20% for all earners and ending the 40% tax relief on pension contributions for higher earners.

The most unpopular of all the taxes put to the former Labour voters was inheritance tax, with a perception that the wealthiest can get out of paying it and those on lower incomes face the biggest burden.