The gap between the poor and the super rich is growing. Kevin Gulliver writes about how the government could tackle this tragedy.
The publication of the Rich List by the Sunday Times yesterday ‘celebrated’ how ‘self-made’ individuals and entrepreneurs now out-number aristocrats and inherited wealth for the first time since the list was compiled.
This year’s Rich List sought to cast the control of £724bn – 6% of the UK’s national wealth – by just 1,000 people as deserved and the natural outcome of an economy based on merit and a tax system that rewards entrepreneurial endeavour and hard work.
But more to the point, as the Equality Trust points out, is the UK’s growing wealth divide: These 1,000 individuals have amassed total wealth which is significantly greater than that of the poorest 40% of households, or 24 million people, who have a combined wealth of £567bn.
What’s more, just 20 individuals control £192bn, or 1.5% of UK wealth. This sum is more than the gross domestic product of the majority of the world’s countries.
The Equality Trust calculates that the UK’s 1,000 richest people have also increased their wealth by £66bn in the past year alone, and by £274bn in the past five years. An increase of 61% over half a decade, and equivalent to more than two years’ spending on the NHS.
This excessive increase in wealth is part of a more general trend in the UK towards greater wealth inequality. The Wealth and Assets survey, carried out by the Office of National Statistics, reveals that top tenth households had a median wealth of just over £1m, representing a 17% rise over the last five years. Those in the bottom tenth, on the other hand, saw their meagre assets decline by 9% to stand at just £32,000.
These trends in wealth inequality make a mockery of the Government’s announcement last Friday of pumping £50m into grammar schools to boost social mobility. Never mind that the weight of evidence is that grammar schools do not improve social mobility, or that the alumni of elite public schools are 94 times more likely to occupy positions of power and influence than those who went to state school.
The concentration on social mobility by successive governments obscures the fact that, with a limited number of top positions in politics, the civil service, the judiciary, and the professions, upwards mobility can only be achieved by the privileged sliding down the social scale to make room.
A government serious about addressing injustice would seek to systematically and strategically reduce inequalities in income, wealth, education and life chances through redistribution of wealth, power and privilege.
Even imposing a 5% per year wealth tax on the wealthiest 1,000 individuals for the lifetime of a Parliament would raise £181bn. This sum could help to reduce poverty and enable significantly more investment in health and local council services, while leaving the fabulously wealthy no worse off than they were in 2013.
That such a wealth tax is not even discussed widely today in political or policy-making circles suggests that the grip of the wealthy on the levers of power is stronger than ever.
Kevin Gulliver is Director of Birmingham-based research charity the Human City Institute, is former Chair of the Centre for Community Research, and part of the SHOUT save social housing campaign, but writes in a personal capacity.
To reach hundreds of thousands of new readers and to make the biggest impact we can in the next general election, we need to grow our donor base substantially.
That's why in 2024, we are seeking to generate 150 additional regular donors to support Left Foot Forward's work.
We still need another 124 people to donate to hit the target. You can help. Donate today.