Murdoch’s Sunday Times has just published its Rich List for 2015 which shows that the richest 1,000 persons based in Britain now have wealth valued at £547.1bn. That works out at an average level of wealth of nearly £550 millions per person, though there are wide variations between the threshold level of £100 millions at the base to £13.2 billions at the top (someone called Len Blavatnik).
These are not only staggering figures, but perhaps even more staggeringly, they have more than doubled since the financial crash in 2009. In that year the richest thousand had £258 millions, but they now have 112% more. They include 117 billionaires with a total wealth of £325 billions, nearly £3 billions each on average. Indeed Britain apparently now has more billionaires per 100,000 of the population than any other country in the G20 group of the world’s biggest economies, more even than the US. The number of billionaires in Britain has almost trebled in the past decade: there were only 40 in 2005.
This is the richest 0.003% of the population. At the other end of the spectrum there are now over 13 million persons in poverty households as officially defined, i.e. the household’s total income is less than 60% of the national median income. That works out, though varying according to family size, to about £240 a week. What however is most disturbing, though little recognised, is that in more than half these households at least one person is in work. This arises because the national minimum wage is very low (£6.50 per hour), and even that is rarely enforced against unscrupulous employers, but also because of the alarming zero hours contracts system. That accounts for some 20% of the population at the bottom; in contrast the top 1% take home in excess of £3,000 a week, including thousands who are millionaires getting over £20,000 a week.
Inequality in Britain is now grotesque. What should be done? Labour is proposing a Living Wage of at least £8 per hour at the base and at the top a mansion tax on properties worth over £2m, an increase in the top rate of income tax from 45% to 50%, and a bankers’ bonus tax to raise £2.5bn. But that is nowhere near enough to bring inequality within acceptable limits. What is really needed is a wealth tax. A wealth tax pitched at 1% should raise £5.5bn from the richest 1,000 persons so long as it was made clear that any failure to report the true and accurate level of wealth would be penalised by doubling the rate of tax. A wealth tax aimed at the richest 1% (some 310,000 persons) would of course raise several more billions. To assist in the rigorous collection of these taxes the number of tax inspectors, which the Tories (and Blair-Brown before them) hugely reduced, should be built up to whatever level necessary since ARC, their professional body, calculates that they raise between 30-180 times their salary each year