James York: Stop fighting the wealth tax, disarm it with better competition policy | Conservative Home

James York is a member of the Beaconsfield Conservative Association and a policymaker in the insurance industry. 

Few who believe in the values of choice, competition and democracy could be upbeat. We have to admit that since 9/11, and supplemented by Covid, the powers of state to interfere in our lives have crept to border a place distinctly overbearing. Our reward? Growth has lagged and inequality is an undeniably hot topic.

The fightback has to start with the way we communicate our values. Nothing is more prescient right now than the Gary Stevenson-led relentless drive for a wealth tax. We can push back against this disaster – we just need better policies.

It seems prescient to focus new policy brains on competition, because right now the far left are hammering on the door for a wealth tax. When they find a political nag, they never stop nagging, do they? But they are just canaries in the coal mine – if you don’t mind the mixed metaphors – they aren’t the fire suppression system they think they are. They certainly aren’t the lift out, the escape. Their ideas collapse the entire mine.

That’s because the modern globalist economy has conjured inequality to levels not seen since Victorian times. We’ve stood and marvelled at it, rather than protected our economic systems. Whilst the United States’ average wealth per state is holding up, the gap between its wealthiest and poorest is eye-watering.

Jeff Bezos and Elon Musk alone could likely outspend most governments, should they wish. It’s easy to see how the far left can leverage their wealth and lifestyle to insist on Mugabeist asset grabs – themselves as ill-considered as the VAT raid and Non-Dom raids before them.

The response of those who believe in the triangle of values we do has been to argue the merits of the specific tax. To battle the proposed solutions, we’re constantly playing political games reactively. It’s the equivalent of letting Napoleon choose the time, place and weapon of choice for the battle. Your odds of victory reduce the longer he has that control – you’ll be pounded by his deft use of artillery.

The left’s artillery is social justice, unfairness. And we underestimate their skill at leveraging it at our peril. You have to think laterally and to your own advantage.

At the root of their gripe isn’t wealth – it’s competition. Many reading this will be successful (well done, it’s hard!), and invest in opportunities. Would you seriously back a British founder looking to take on Tesla? Or seeking to build a new Google or Facebook?

These companies we call GAFA (and I’ll include Netflix as it dominates content, now, too) have formed a technology driven, globally straddling oligopoly. Such is the nature of the digital economic realm, the laws of monopoly are baffled by their eminence. Oligopolies are bad. And each in their own realm is arguably a monopoly. Although we’re seeing Google being attacked by a new monopoly (OpenAI).

Yet, DeepMind, modern AI’s godfather was British. Sold for $500m. That looks like the bargain of the century, even if Google are on defence against Sam Altman’s charity-not-a-charity-anymore. Equally, bar Jobsian Apple’s creativity, nothing these companies do technically is irreplicable. Amazon mostly sells other people’s stuff. OnBuy in the UK can do it, too. Let’s be honest – the GAFAN castle just looks impregnable. With its resources, it can withstand a siege from many armies now.

Tech investors aren’t secretive about this; the great irony is that MAGA-backers like Peter Thiel rely on these “zero-to-one” monopolies to make their returns. Do they understand that to be a free marketer, competition is your best friend? Yet, because of the success, power and, frankly, access to data, consecutive US and Western governments have failed to break these monopolies. They’re enthralled.

To defeat this new far left “wealth tax” Klaxon, we need to mandate competition again. Instead of redistributing the gains from this oligopoly, we need to redistribute the resources of the oligopoly to create competition. It’s a strategic, compelling and simpler equation. After all, whilst Gary’s YouTubes offer a compelling dystopian vision of all the things that are going wrong, he’s lighter than helium on how precisely the money his idea snatches is going to change anything.

Gary isn’t selling antibiotics, he isn’t even selling aspirin. He’s one of those lifestyle ads on Instagram. It sounds right, but no one has any data on how the outcomes change. Don’t even get started on the irony of his using X, YouTube and Facebook to talk about inequality and peddle his wealth tax snakeoil. I think I’ve suitably eviscerated Gary enough, though, now.

Back to solutions? Tech and AI is a great place to start. We need to pick the biggest kids on the playground, and circle them with gangs of new upstarts. Ones protected by the soft power of the British state; we need to lead so that other Western societies can follow. We are the oligopoly’s cash cows.

Whilst the UK state is loath to hypothecate tax – the entire fintech boom that has given the UK its best chances of global unicorns was triggered and helped by the Capability and Innovation Fund (CIF), which was established as part of the Alternative Remedies Package after the 2008 bailout of RBS. There’s a precedent that this kind of competition policy really, really works in igniting competition. Monzo, Revolut and Starling (still both scrambling to grow in retail) may be at a huge disadvantage to global financial powerhouses like Goldman Sachs, but they’re secure and sustainable competition for their incumbent peers.

We need to compete. We need to make them help us compete when their power gets too great. We need a reboot of how vehemently we defend the principle of competition. For example, it would be far harder for Trump to poo-poo a digital tax on his US monopolies if the capital was put into a blindly allocated Venture Capital Trust for high risk, monopoly-hunting swarms of new ventures. He could copy that – his regulators have long procrastinated over breaking up some of their big tech monopolies.

As for the fabled startup ‘exit’? A giant gaslighting campaign has successfully wired every British entrepreneur’s mind to subconsciously look to GAFAN (and its offshoots) for their exit. Perhaps a similar vehicle to the Competition VCT [with British Business Bank match-funding] could underwrite investment banks bringing the UK startups to market. Perhaps it could offer a great source of debt for these UK upstarts to hoover up US and European competitors – to even the odds and teams. The net winner? Wealth equality.

But no, instead we are mired in the sludgy, stubbly debate conjured by the ego of Gary Stevenson. A man that can hold a pen over a cuppa in his kitchen; clearly articulate the need to snatch the chips of the big, mean, super rich – but upon whom the entire irony of his success is lost.

It’s time those who believe in competition, choice and freedom began choosing the battlefields, and fiercely defending this triangle of prosperity with creative, bold and resonating policies. Otherwise, the seemingly reformed People’s Economist, who openly admits he “made millions of pounds by betting that inequality would destroy the economy”, will continue to use the problems as his tools to peddle a placebo. It isn’t even worthy of being called snake oil.

We cannot let it happen.