The richest 1,000 in UK double their wealth since crash while average incomes drop 6%

In the last year, according to the Sunday Times Rich List tracking of Britain’s ultra-rich, the richest 1,000 persons in Britain increased their personal wealth last year by no less than £70bn. That means each has gained on average £70 millions in this last year. Over the 5 years now since the crash, it is almost unbelievable that these 1,000 people have increased their personal wealth by a staggering £260bn. Their total wealth doubled from £258bn in 2009 to £519bn now.

That means that this tiny number of persons, just 0.003% of the population, now command assets equal to one-third of Britain’s entire GDP.   This is in the same country where  a million people are now dependent on food banks, real wages on average have suffered their biggest fall since the nineteenth century, the disabled are being persecuted into jobs that aren’t there (2.35m unemployed chasing 0.58m vacancies), and over a million individuals have been sanctioned (deprived of all their benefit , i.e. made destitute, for either 4 weeks, 3 months, or 3 years) for the most trivial offences, e.g. being 5 minutes late for an interview.

So does this matter? Blair always maintained that it didn’t because it did no harm to the rest of the population. But that is nonsense for several reasons. The Spirit Level showed that the greater the inequality, the more intense the social pathology suffered by the population at large. The injustice in terms of unfair rewards is now so glaring as to be politically explosive.   Wealth on this scale conveys political power in lobbying governments to bend the law to their advantage (e.g. currently allowing shale drilling on private land without the consent of the owner) which makes a mockery of democracy. Many in the top 20 wealthiest individuals have inherited wealth, not made it in their lifetimes, contrary to any concept of meritocratic capitalism. By draining resources upwards to a tiny elite, there is far less money available to the nation at large for essential public services and job creation. And by engaging in tax avoidance on an industrial scale they are making hardly any due contribution to the national wellbeing, severely curtailing the quality of life for everyone else.

So what should be done? Piketty’s answer to this astronomical ballooning of wealth at the very top is a global wealth tax plus an 80% tax on incomes over half a million a year.   Both these ideas would be difficult to implement. A better approach would be a graduated tax on the recipients of a donor’s wealth rather than on the donor’s wealth as such, in order to encourage the widest possible dissemination of personal wealth-holdings. And rather than punitive taxes on excessive gross but also in particular on appropriate pay levels from the boardroom to the shop-floor.incomes, it would be far better to introduce a universal metric for awarding incomes rather than the present inherent generator of inequality via collective bargaining for wage-earners, individual private contracts for white-collar workers, and self-appointed remuneration committees for the boardroom. If all large companies were required to have Enterprise Councils composed of representatives of all the main occupations within the company meeting at least once a year, discussion would focus (as a shareholder meetings) on all aspects of the company’s performance, but also in particular on appropriate pay levels from the boardroom to the shop-floor.