Our new analysis shows that if all household wealth had grown at the rate of the top 20 rich list entrants since 2012, every UK household would be £205,000 better off.
The Sunday Times annual ‘rich list’ of the 250 wealthiest households in Britain shows that the UK is now home to a record 177 billionaires.
The total wealth of the top 20 entrants on the rich list jumped by over £30 billion in the past 12 months. Going back further, the net worth of the twenty richest people in the country has more than doubled since 2012. If all household wealth had increased at the same rate, it would equate to an extra £205,000, on average, for every household in Britain.
It doesn’t seem sensible or necessary to run the economy in a way that enables people who are already really incredibly wealthy to accumulate even more while much of the population is crushed by a cost of living crisis. Imagine, for example, the difference that the £30 billion increase in the wealth of the top 20 people on the list could have made if invested in hospitals, schools, green energy, public transport or support for the world’s poorest countries, rather than accruing to people who were already billionaires anyway.
The sheer inefficiency of concentrating extreme amounts of income and wealth amongst a tiny number of people at the top is increasingly recognised at international level. Joe Biden has proposed a 20% tax on the income (including unrealised investment gains) of all Americans worth more than $100 million. Xi Jinping’s ‘common prosperity’ agenda in China has involved a commitment to ‘regulate excessively high incomes and encourage high-income groups and enterprises to return more to society.’ Emmanuel Macron called for European-wide efforts to limit executive pay during the French Presidential election campaign
In the UK, where the top 20 of the rich list is comprised of nine entrants who inherited vast business empires from their family and four oligarchs from the former Soviet Union with reputed links to Vladimir Putin (three of whom are subject to sanctions), it is very hard to argue that redistributive measures will disincentivise genuine entrepreneurs and innovators. Unfortunately, free market dogma has meant that feeble suggestions like extending the time limit for MOT renewals are the best the Government has come up with to support people through the cost of living crisis.
With stagnating wages and miserable economic growth, it’s clear that sharing existing wealth more evenly is the most important political challenge of our time. That means taxing the super-rich more effectively and getting the companies they own and invest in to pay their workers more. The potential benefits for society are enormous, and as the rich list demonstrates every year, those at the top can certainly afford it.