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War & peace
6 min read

How Ukraine reckons with its reality

From Kyiv's coffee shops to the front line.
A woman squats and touches a war memorial
War memorial in Bucha.

How on earth it came up I have no idea, but I vividly remember chatting with my grandmother about the ‘Phoney War’ of 1939. I can’t have been much older than 10. It’s not that I was especially inquisitive about history, nor that I had the presence of mind to ask for stories from her extraordinary life. How I wish I’d done that with all four of my grandparents. But my hunch is that it was prompted by sitting in the garden on a glorious summer’s day. We were probably shelling peas or peeling potatoes or something—she always got people staying to do jobs. 

She was reminiscing about how weird those months in mid-1939 were, in particular remembering how lovely the summer had been, far brighter and drier than normal. Even after the Nazi invasion of Poland on 1st September (thus triggering Britain and France to declare war two days later), the weather remained good. A sense of war’s inevitability had hovered throughout 1939, so even after Chamberlain’s famous ‘final note’ was rejected, nothing much changed. At least, not for ordinary Britons. Life went on. It would take many months before the conflict came all too close to home. 

I couldn’t help but think about this during my visit to Kyiv and Lviv earlier this month. The difference, of course, is that there was nothing phoney about Russia’s 2022 invasion or the horrors inflicted on eastern Ukraine since the 2014 annexation of Crimea. But for the majority, routines continued uninterrupted. As they must.  

For example, assuming the worst, I had contacted several Ukrainian friends offering to bring any scarce or unavailable items from Britain. No one took me up on it; it was unnecessary, they all said. After wandering through both cities, it was obvious why. Although trade will undoubtedly have been slower than before the war, shops seemed well stocked with all the necessities and not a few luxuries.  

Then on my final morning, I was quietly sipping a cappuccino in Lviv’s historic Rynok Square when the air-raid sirens suddenly cranked up into their now familiar whine. Being kept awake by Kyiv’s sirens had been a new experience for me (a mark of our Western privilege that we have avoided all-out war on our soil for decades). But this was my first daytime alert. It was even accompanied by booming Ukrainian announcements, although the advice was inevitably lost on me. As it was on all around me, who seemed assiduously to ignore it. The few mid-morning pedestrians—few tourists come here— maintained their ambling pace unchanged; the taciturn waiter patiently took orders at the next table; a middle-aged businessman on the square continued his negotiations on the phone while gesticulating with his briefcase. So naturally, I kept sipping. 

This was not because the sirens cried wolf. Just 10 days before my visit, Lviv had suffered one of the worst air attacks of the war, with 7 killed, over 60 injured, as well as the destruction of schools and historic buildings. Moreover, I met a friend for lunch an hour later who told me that some man-sized drones had attacked his side of Lviv and he saw one or two shot down. So it was all real enough. What was everyone thinking? 

Those who keep going amid a siren’s whine are not perhaps ignoring it but taking calculated risks in their perseverance.

Ignoring reality 

T. S. Eliot famously observed that "Humankind cannot bear very much reality." So perhaps that was what was going on here. After two and a half years of war, I can quite imagine exhaustion and resignation to what was going on. So it just gets ignored. Ordinary life must go on. After all, only a small proportion of the population is actively engaged in the war; the rest, if they haven’t already left, must try to keep calm and carry on. In fact, men aged between 18-60 are unable to leave at all without the necessary papers and these are hard to come by. Perhaps the only way, then, is to avoid thinking altogether. On a beautiful day, once autumn has begun to temper Ukraine’s oppressive summer heat, sustaining the illusion is simple. Life carries on. 

Of course, it can’t last. Every single person I spoke to had family or friends at the front; some had already been killed. The destruction caused by air raids brought a distant conflict onto people’s doorsteps. However, it was driving through the pleasant Kyiv suburbs of Bucha and Irpin, both of which I had previously visited several times, that reinforced the impossibility of ignoring reality. Bucha is now emblematic of the invasions very worst atrocities, from when Russian forces had Kyiv almost entirely surrounded before being pushed east. Locals were rounded up and slaughtered, with the bodies of several hundred civilians later found to have died from bullet wounds rather than shrapnel. But as we drove through, it was impossible to conceive of those horrors. Apart from anything, the weather was so lovely. Atrocities don’t occur on beautiful days… or in lovely places… surely? 

Persevering amid reality 

What impressed me most in those areas was the speed of the rebuilding work. Entire shopping malls and neighbourhoods had been razed. But after only twelve months or so, a memorial to Bucha’s 500 dead had already been erected. As we drove through, major construction projects were underway, with multiple cranes towering over rapidly rising apartment blocks and retail parks. 

These are not signs of reality ignored but faced. These are signs of gritted hope. So it struck me that those who keep going amid a siren’s whine are not perhaps ignoring it but taking calculated risks in their perseverance. Just as it is unwise, if not impossible, to live on a permanent adrenaline rush, so one cannot always exist in flight or fight mode indefinitely. It is simply that in wartime, risk thresholds change. Human beings are resilient and adaptable. They endure the most extraordinary setbacks and conditions. 

So, to be with Ukrainian friends in my limited, deficient expression of solidarity, has been inspiring. No one I met had any illusions about the realities of Ukraine’s current plight (especially with a harsh winter looming as Russia systematically destroys power stations). But still they persevere. 

Seeking deeper perspectives of reality 

However, Eliot did not primarily refer to bearing the reality of the mundane. As the novelist Jeanette Winterson explained, Eliot was identifying how little twentieth century society (that of his Waste Land in particular) could bear of spiritual reality. He meant the phenomenon of resistance to a journey towards God or of facing themselves as they stand before God. 

However, the horrors of invasion and the nightly anxieties of air raids have put paid to all that. One friend I was glad to see again is Andriy, previously a fairly well-known Ukrainian journalist and now a church pastor. He regularly goes to the frontline as an unofficial chaplain, visiting troops in their camps and the injured in hospital. He was unequivocal. Before the war they would undoubtedly have been shrugged off. But now, he has not met a single soldier who is uninterested in the things of God and eternity. War has forced them to face their mortality and Andriy has found that most are desperate to talk about little else. These things matter. Even on a beautiful, bright, early autumnal day.

Explainer
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Economics
6 min read

How to tax ethically to avoid a two-tier society

From income tax to property and inheritance taxes, which is fairer?
a pile of coins.
Sarah Agnew on Unsplash.

Few doubt that Chancellor Rachel Reeves will be putting up taxes when she presents her first Budget on October 30th.  

The political narrative of recent months has very much been of an alleged fiscal “black hole” of £22bn - or is it £40bn? - that somehow needs to be filled. 

While the size of the shortfall and the identity of those responsible are both hotly disputed, and despite a lack of detail from the Treasury about what it actually consists of, the questions now being asked are not whether taxes will rise but which ones and by how much.  

Months of speculation have focused on employer National Insurance, capital gains tax and freezing income tax thresholds as areas that Reeves could look to for the additional revenue. 

But beyond the immediate issue of raising enough revenue to make good any shortfall, lies a deeper, trickier question about the way in which taxes should be levied for the good of society. If a government is to force people and companies to hand over their money, then what is the most ethical way to do this? Who should pay and who shouldn’t? How can tax be used to reduce inequality and build a better society? 

Answering such questions is, of course, far from straightforward, because there are plenty of other factors in play. 

For instance, some taxes are surely levied because they are simpler to collect. Take income tax - an unpopular measure introduced in 1799, then abolished before being reintroduced as a supposed temporary measure. It could certainly be argued that taxing people’s income - their attempt to get on in life and improve their lot in life - is less “fair” than taxing wealth that has been accumulated by someone’s ancestors years ago. Working hard and earning income is often surely a way of breaking down class divisions. But income tax - contributing 28 per cent of UK government tax take in 2023-24, according to The Institute for Fiscal Studies - has the advantage that it is relatively difficult for the average worker at a UK company to avoid it. Ease of levying it is surely a driver.  

Equally, some taxes that might seem “fairer” have deliberately not been levied because of the difficulty in collecting them, and/or because to try to do so could be counterproductive.  

A wealth tax, for instance, would be “economically damaging”, according to one of the UK’s highest profile tax experts Dan Neidle. 

Or take the politically contentious issue of non-doms, a colonial era tax break allowing rich foreigners to avoid UK tax on overseas income. It would be fairer, the argument goes, to tax them on the whole of their income. If they are going to be resident in the UK, then surely they should be taxed like a UK resident whose home is here? 

Former Chancellor Jeremy Hunt abolished this regime earlier this year but left a number of concessions that the incoming Labour government pledged to abolish. But non-doms are tax-sensitive and highly mobile, and a number of jurisdictions compete to attract them. Many are entrepreneurs and wealth creators that many countries need. Reports have suggested a clampdown could raise no money or even cost money and could drive people away. 

“Housing is being treated as a commodity. The problem is, it’s not; it’s not just an asset. It has utility value and a communal and quasi-spiritual value, enabling people to feel rooted.” 

Paul Williams

So, what can be done to use tax in an ethical way? Paul Williams, research professor of marketplace theology and leadership at Regent College, Vancouver and chief executive of the Bible Society, takes a Biblical perspective that he believes offers some solutions. 

He takes as his starting point a story from the gospel of Matthew, where Jesus is asked whether people should pay taxes to Caesar. The question is a trap - either Jesus gives his backing to taxation that is highly unpopular with the Jewish people, or he rejects the tax in an act of rebellion against the Romans. 

Jesus replies that they should “pay to the Emperor what belongs to the Emperor, and pay to God what belongs to God.” We are to pay our taxes to those in authority, but we are also to honour God. 

While Williams believes that too much emphasis is placed on the Budget and political parties’ promises to be able to fix everything, and that a more radical rethink of our economy is required, he also sees room for positive tweaks to the current system. 

One key area is the property market, the manifestation of so much inequality in society, with some people owning multiple houses while others cannot afford to buy one. 

Williams argues that the ready availability of debt finance has allowed those who already hold assets to easily acquire properties, turning real estate into an investable asset class to the detriment of many of the poorer in society. 

“The reason there’s so many homeless people and empty houses is due to debt finance. It makes it easy for a relatively small proportion of the population to acquire a large percentage of the assets. 

“The system has allowed a structure in which a small advantage in the beginning can lead to big, big differences over time.” 

Williams highlights parts of Devon and Cornwall that have been, he says, “completely ruined” by wealthy people from elsewhere buying second homes, leaving property “out of reach of anyone who lives and works there”. 

Nevertheless, he believes taxation can be used in this area to help level the playing field. 

He proposes a “pretty punitive” marginal rate of tax on ownership of more than one home. (Stamp duty only partly does the job and is a blunt instrument also affecting people moving homes, thereby makes mobility expensive). 

“You want to disincentivise the way the housing market is used for speculation,” he said. 

“Housing is being treated as a commodity. The problem is, it’s not; it’s not just an asset. It has utility value and a communal and quasi-spiritual value, enabling people to feel rooted.” 

Buy-to-lets, meanwhile, are better than having empty second or third homes, but “wouldn’t it be better if occupiers could buy that house?” he adds. 

Meanwhile, research by the Financial Times recently found a huge wealth gap between the average millennial and the top 10 per cent of millennials, who are benefiting from family wealth to accumulate substantial housing assets.  

So, would increasing the rate of inheritance tax - one of the most hated of taxes - and/or lowering the threshold also help reduce some of this inequality? After all, how is it fair that one child in the UK is born to inherit large property wealth while another is born to inherit little or nothing? Or, even worse, that second child will only ever be able to afford to be the tenant of the first, paying them rent for the rest of their lives? 

Williams is not a fan of inheritance tax per se, arguing that it is “not part of the package” in a Biblical image of a flourishing economy.  

But he adds an important caveat: “the playing field is not level. 

“There might be circumstances to impose a one-off tax on the very wealthy… if you want a transition to a more equitable society.” 

Such steps are not easy to take. It is, he admits, probably “career suicide” for a politician to adopt such views. But if we are to take steps towards a fairer way of life, and avoid a two-tier society in decades to come, then maybe the conversation needs to shift this way. Perhaps the Budget could be the time to start.