It's that time of the year again, when we are invited to gaze in awe at the wondrous, dazzling wealth of the Sunday Times Rich List, like dribbling paupers pressing their faces against the plush shop windows of Knightsbridge.
The richest 1,000 people in Britain now own an incredible £658 billion. That's more than the combined wealth of the poorest 40% of the population, roughly 10.3 million families. However, this year, far from balking at the absurdity of such inequality, we're told that it is merely reflective of a dynamic, modern economy. Wealth is no long simply handed down from one gilded generation to the next. In fact, new fortunes are being won, and lost, by an ever changing cast of super-rich.
In other words, the Rich List doesn't reveal entrenched privilege but a meritocratic society, where the hard-working and intelligent can thrive regardless of background, and where rich duffers are consigned to the scrapheap. As Professor Douglas McWilliams puts it "The reality is that there is a lot of truth in the old Lancashire term 'from clogs to clogs in three generations'."
Is there a constant stream of people dropping off the Rich List and finding themselves in poverty? It seems unlikely. The truth is that while wealth does ebb and flow, the super-rich rarely fall into rack and ruin. Gordon Crawford, the IT tycoon was joint 12th in the 2000 Rich List, with wealth of £1.3bn. Crawford's fortune is put at "just" £122m today. That's hardly on the breadline. In fact, given falling out of the Rich List can still leave you a multi-millionaire, all this shows is how far the very richest have stretched ahead of ordinary people.
The real question we should be asking is not whether vast new wealth is being created, it's whether this is a system that benefits the many, and what, on reaching such dizzying heights, we should ask of those at the top.
The first question is simple enough to answer. According to the latest data from the Office for National Statistics, while the wealthiest 10% have seen a large increase in their average wealth, from £752,900 to £895,400, the poorest 10% have actually seen their average level of wealth fall. In addition, real wages are also predicted to take a hit as inflation creeps up. The wealthiest are streaking away on private jets, the poorest are falling further behind, into the gaping abyss of poverty and debt.
It is clear to see the impact. The Trussell Trust recently announced another year of increased food bank usage, with a reported 1,182,954 user visits in 2016, a 9% increase on the previous year. At the same time, millions of people are struggling to afford a decent roof over their heads and two thirds of children in poverty are in working households. All this in the fifth largest economy in the world.
The increase in wealth of the richest 1,000 people last year alone could pay the grocery bills of every food bank user for over 56 years. It could provide over 5,143,819 jobs for a year paid at the Living Wage. It could even pay two and a half year's rent for 4.5 million households. The endless arguments over whether the super-rich are wealthy by dint of their talents and industry alone, or as a result of rent-seeking and exploitation, misses this important point.
Everyone on the Rich List has benefitted from the hard work and investment of others. The infrastructure that allows them to transport their goods, an educated and healthy workforce, and most of all, the protection of their vast personal wealth. These are benefits they've enjoyed that we've all paid into. For most of us, we want to see such investments used to lift us all up, not a select few. It's even more galling to see the staggering wealth this has produced sit dormant. We all know that trickle-down may make it to the sons and daughters of millionaires, but the rest of us aren't seeing it. Redistribution it isn't.
Despite protestations to the contrary, many of the Rich List are now semi-permanent fixtures, those who heroically pulled themselves up by their Louboutins from moderate wealth to extreme wealth. Worse still, a significant number of those on the Rich List have built their wealth through our sclerotic housing market, directly profiting from a broken system that causes misery for millions. Their wealth is not a victimless crime when it locks future generations out of the opportunities enjoyed by their parents and grandparents.
This extraordinary level of inequality damages us all, but it should also shame us. It is emblematic of the failures of our political and economic institutions to grasp the importance of shared prosperity. This isn't just a moral case, it's also an economic and social imperative, because as an extensive body of research continues to show, more unequal societies such as the UK suffer from poorer physical and mental health, lower life expectancy, higher rates of violent crime, poorer educational outcomes, and lower levels of trust. And there is evidence from the International Monetary Fund, World Bank and OECD that our extreme inequality could also damage our economy.
With a general election approaching, it is clear there are deep divisions within our society. The social bonds that connect us have been severely weakened, but this should not surprise us, as this is a symptom of our extreme inequality. Vast material differences create huge social distances.
However, inequality is not inevitable. Over 80% of people believe the gap between rich and poor is too great, and everyone from the Pope to US Presidents, to billionaires like Bill Gates have warned on inequality's effects. If our political parties are serious about building an economy for all, it will heed these warnings, listen to voters, and summon the political courage to tackle the defining issue of our times.Suggest a correction