Should we follow France’s example and tax the rich? HAMISH MCRAE

The ‘broadest shoulders’ in France will also have to bear the heavier burden.

Sir Keir Starmer warned Britons just over a month ago that richer people would have to pay more taxes, although on that occasion he did not explain why pensioners would also be beaten up.

Now the new French Prime Minister Michel Barnier, best known to the British as chief negotiator for Europe on the Brexit deal, has confirmed the rumors about higher taxes in France.

For wealthy French families – those with an annual income of more than €500,000 (£420,000) – there will be a temporary increase in income tax.

Temporary would last one or two years. The estimated additional income is estimated at € 2 billion, so not that much extra money.

There will also be an increase in corporate tax for companies with a turnover of more than 1 billion euros, which will apparently affect around 300 companies, as well as other smaller additional changes.

Interestingly, French retirees are also affected. They will start receiving the agreed annual interest rate increase in July, instead of on January 1 as usual, saving the state six months of the higher payment.

Run for the hills; Sir Keir Starmer warned Britons just over a month ago that richer people would have to pay more taxes

Details will be announced this week, but from what we know so far, it seems more likely that Barnier is failing to observe the famous rule of taxation attributed to Jean-Baptiste Colbert, Comptroller General of Finance of Louis

But there will be a lot of hissing for few feathers. So why would you do it?

The answer is that France’s budget situation is much more messed up than ours.

Their budget deficit for the current year could be as high as 6 percent of GDP, while ours is just above 4 percent. Total public debt is 111 percent of GDP, compared to 100 percent for Britain.

Taxes are already the highest in the developed world, but that hasn’t stopped wealthy French people from becoming extremely wealthy.

Bernard Arnault, head of luxury conglomerate LVMH, is number four on the Bloomberg Billionaires’ Index, with a net worth of $193 billion.

Indeed, there are six French people in the top 100, while there are no British people at all. (The richest Briton, Sir James Dyson, comes in at 105 with $20.5 billion).

The markets are of course well aware of the precarious position of French national finances and have started to make the country pay more for its debts.

The likely reason for Barnier’s action was that the yield on ten-year French government bonds rose above that of Spain and at one point became almost as high as that of Greece.

On Friday, France’s figure was fractionally below 3 percent, which, at 4 percent, was much lower than Britain’s, but was still slightly higher than Spain’s and much higher than Italy’s. What does this mean for us here?

I see three messages. One is that the idea of ​​a temporary tax is tempting. You get some income and if people really believe it will be a one-off, they won’t take radical measures – like moving abroad – to prevent it.

It wouldn’t solve any longer-term problems, but I see some clever hurdlers in the Treasury have presented it to Chancellor Rachel Reeves as an idea we can emulate.

A second is that the cost of servicing the national debt will become a real constraint, not only for her, but also for future chancellors in the near future.

It will be more like the 1950s, when the enormous debt burden of World War II hung over every budget decision.

The government had to reduce the debt, keep the costs of servicing it low and try to get the large amount down.

And third, Western democracies are on the borderline of taxation. That border differs from country to country. It is perfectly reasonable that if citizens want to pay more taxes for what they think are better public services, they should do so.

But France has hit its buffers – saying the increase will be temporary acknowledges that. I suspect we are also close to the buffers.

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