A levy on Premier League player transfers could save cash-strapped councils – here’s how

It is a strange country where, in the same week, we hear of councils going bankrupt while arms companies make billions. We are told that the government cannot afford to lift the two-child benefit cap, leaving families in poverty – and yet hundreds of millions are spent on a few Premier League footballers.

Fifteen years after Liam Byrne’s infamous note, it is clear that – far from there being “no money left” – no money is being made available. There is still plenty in the system, it is just not being shared fairly.

Britain has always been economically divided, but since Labour left power in 2010 the gap between rich and poor has exploded. Under 14 years of Conservative rule, everyday life got harder for most people: prices went up, living standards fell. Meanwhile the richest 10% kept getting richer.

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• Brits overwhelmingly back a wealth tax on the ultra-rich. Would it work in the UK?

More and more people now agree: we need a wealth tax. Former city trader Gary Stevenson is one of the loudest voices. He has built a big following by calling for a 2% tax on anyone who owns more than £10 million in assets. In July, Socialist Campaign Group MP Richard Burgon delivered an 80,000-signature petition to Downing Street backing the same idea.

Support stretches across the progressive spectrum. Far from his Treasury note, Liam Byrne now knows where the money lies. The former Progress co-founder now calls for wealth taxes, identifying ‘10 different permutations of’ a wealth tax, from ‘taxes on net household wealth, to capital gains tax equalisation, through to National Insurance contributions on investment income’.

Let’s be clear: wealth taxes are not just about fairness – they are a necessity. The economy is struggling, and thanks to self-imposed fiscal rules, the government cannot fulfil its promise to improve working people’s lives without calling on the ultra-rich to play their part. Taxing extreme wealth is the only way for the chancellor to have any chance of rebuilding the country while her fiscal headroom continues to shrink.

Taking Byrne’s lead to let a thousand wealth taxes bloom, one idea Rachel Reeves could deploy is a levy on Premier League transfers.

This summer’s transfer window has already seen clubs spend a collective billions. Liverpool FC spent £269m to land just four players. At the same time, Liverpool City Council is facing a £32m budget gap due to rising homelessness and care costs.

Using Gary Stevenson’s formula – a 2% levy on any transfer over £10m could raise millions to relieve struggling local authorities.

Take Arsenal: so far they have spent £186.5m on six players – five of them costing more than £10m. A 2% tax on those five transfers would raise £3.73m to help Islington Council, which faces a £31m shortfall this year.

Or Sunderland. They have signed five players over £10m, spending a total £103.3m on them. A 2% levy here would raise £2.07m for their council, which is facing a £22m budget gap this municipal year.

For clubs spending hundreds of millions, an extra £2-5m is small change. But for local people whose care packages might be reduced, or whose councils can no longer contribute to their school transport – it could mean everything.

Of course, this will not fix local government. We still need big reforms, like the Fair Funding review, and a National Care Service. But this kind of tax would make a powerful point: that industries making huge profits should give something back – especially when they regularly, heavily increase costs with no material benefit to the ordinary supporters that sustain the game.

If it curbs inflated transfer fees (remember, 20 years ago the most expensive player cost a mere £21m), that’s a win. And with an exemption for fan-owned clubs, we could also be setting the stage for a much fairer game.

Minesh Parekh is a Labour and Co-operative councillor for Crookes and Crosspool on Sheffield City Council.

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