I thought it worth sharing Oxfam's press release on its new report on wealth inequality in the UK in full. The report itself is available here:
The five richest families in the UK are wealthier than the bottom 20 per cent of the entire population and the gap between the rich and the rest has grown significantly over the last two decades, according to new figures published today by Oxfam.
The agency warned that just five UK households have more money than the poorest 12.6 million Britons — almost the same number of people as those living in households below the UK poverty line.
Oxfam's figures also show that over the past two decades the wealthiest 0.1 percent have seen their income grow nearly four times faster than the least well off 90 percent of the population. In real terms, that means a wealthy elite have seen their income grow by £24,000 a year, enough to buy a small yacht or a sports car, whilst the bottom 90 percent of Britons' incomes have gone up by only a few pounds a week. The average UK salary is £26,500-a-year.
Ben Phillips, Oxfam's Director of Campaigns and Policy, said: “Britain is becoming a deeply divided nation, with a wealthy elite who are seeing their incomes spiral up, whilst millions of families are struggling to make ends meet.
“It's deeply worrying that these extreme levels of wealth inequality exist in Britain today, where just a handful of people have more money than millions struggling to survive on the breadline.”
Growing numbers of Britons are turning to charity-run foodbanks, yet at the same time the highest earners in the UK have had the biggest tax cuts of any country in the world. Ahead of this week's Budget, Oxfam is calling on the Government to re-balance the books by raising revenues from those who can most afford it, starting with the redoubling of efforts to clamp down on companies and individuals who avoid paying their fair share of tax and setting out a long-term strategy to raise the minimum wage to a living wage. With 12 billion in welfare cuts still to come and pressure mounting to offer more tax cuts for the better off at the next election, the agency is also asking all parties to audit how their emerging manifesto policies would affect economic inequality in the UK.
Ben Phillips said: “Increasing inequality is a sign of economic failure rather than success. It's far from inevitable — a result of political choices that can be reversed. It's time for our leaders to stand up and be counted on this issue.”
Economic inequality is far from being a UK only problem - a similar picture of a rapidly increasing gap between rich and poor can be seen in most countries across the globe. An Oxfam report published ahead of this year's World Economic Forum in Davos, Working For the Few, revealed that the richest 85 people on the planet own the same amount between them as half the world's population — 3.5 billion people. The report warned that extreme inequality is creating a vicious circle where wealth concentrated in the hands of a few is used to buy political influence which is used to rig the rules in favour of a small elite and perpetuate inequality.
Such extreme inequality is to the detriment of social mobility and is also increasingly understood to undermine both the pace and sustainability of economic growth.
Ben Phillips said: “While many rich people use a portion of their wealth to support individual good causes, this should not be used as an excuse for governments failing to tackle the problem of growing inequality.”
I applaud Oxfam's involvement on this issue.
As mentioned earlier today, I do advise Oxfam, but not on this report.
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Yes, this is obvious:
“The five richest families in the UK are wealthier than the bottom 20 per cent of the entire population ”
Of course this is true. For it is possible to have negative wealth. As do more than 20% of the society.
And no, it’s not necessarily anything to do with inequality. There’s a lifecycle to wealth. The newly minted graduate with his student loans is in negative wealth most likely, just as one example.
Even Jonathan Portes pointed out how silly this statistics is.
I hear this said time and time again by people who hold the majority of the population in contempt
This is household data and the data comes from right across age spectrums
This claim is firstly just wrong – as Jonathan Portes can be and is on occasion, in my opinion
Secondly, it ignores that fact that there is massive wealth disparity at all points in the age profile and so, candidly, I think this claim is knowingly false
“For it is possible to have negative wealth. As do more than 20% of the society.”
Not according to the ONS Wealth and Assets Survey (most recent data for 2008/10):
http://www.ons.gov.uk/ons/dcp171776_271539.pdf – see Excel chart for Figure 3.
The decile results are as follows:
Total wealth in decile 1 – £5.25 bn
Total wealth in decile 2 – £60.73 bn
This includes net property wealth, net financial wealth, physical wealth and pension wealth. However, even restricting to net property and net financial wealth only, it is certainly not the case that “more than 20% of the entire society” have negative wealth.
By the way the figure for total wealth in decile 10 is £4,490.58 bn – 855 times total wealth in decile 1 and 74 times total wealth in decile 10.
Furthermore Based on the more detailed analysis of WAS data which I did for a project a couple of years ago with IPPR for the Nuffield Foundation I can confirm that Tim’s suggestion that this is simply a lifecycle effect is, frankly, total nonsense. Most of the wealth inequality persists when measured within age groups.
Thanks Howard
The second last sentence should of course read “74 times wealth in decile 2”. It’s been a long day!
I know that feeling….
I assume Tim is taking the uric acid here -I hope so for his own sake!
Tim Worstall – “There’s a lifecycle to wealth.”
That may well be true but does it not follow that, if inequality rises, fewer people must be experiencing that lifecycle to wealth than are having the wealth sucked out of them by your brand of smug neo-liberal crap.
That wealth of the top ten UK billionaires on the Forbes list is largely from ‘real estate’, banking and retail. The Hinduja brothers are in banking but also in production. Branson has sold Virgin media but his airline does provide a service.
Only a few generations ago the top people would have had their money from industry. The Grosvenors of that generation were probably the exception in their inherited wealth.
I wonder how far asset inflation such as land in the centre of London or elsewhere actually benefits the community.
What Mr Worstall doesn’t seem to understand, as a neoliberal, is that unless a person has net wealth, he or she cannot eat. This includes children, students, everyone. What has student debt got to do with net wealth? Net wealth is about how rich you are.
What a mean, black-hearted man! He probably wants the workhouse back.
Indeed -only a psychotic world that monetizes everything can refer to food/fuel poverty as ‘negative wealth’ -one from the neo-lib phrase book if ever there was one!
I think the point was that a new graduate will have no net wealth – they are encumbered with student debt – It was a simple example of how the statistics for the bottom 20% will undoubtedly include some people who are only temporarily ‘poor’ and will likely end up ‘wealthy’. It’s a point, but I would guess this is a minority within the bottom 20% so a bit of a red herring.
What has studnet debt got to do with wealth? – Well they are in net debt hence not ‘wealthy’ But again they are a special case I think becasue a graduate can clearly eat even though they have no net wealth because they have the ability to call on credit (*) and don’t have to pay off the student debt immediately so they have a positive cash flow.
But for a large number of people in the bottom 20% they have no credit and have to live on cash basis so are truly not wealthy and as you say risk not being able to eat.
(*) I note now that this assumes the student in question either has a job or has ‘wealthy’ parents/family who can provide a line of credit – If said graduate is not from a priveleged background and is out of work then they’re as scuppered as the rest.
Of course people can eat if they have negative net wealth. If I owe £10,000 but receive £1000 a month income and spend £100 servicing my debt and £900 on living expenses, I can have both negative net wealth and have money to buy things.
If there are a million people in such a situation, then even a single person with a £1 in net worth will have more net worth than those million people. Am I missing something?
‘Am I missing something?’ Two things:
– an answer to your points, and
– shouldn’t Oxfam do what their website says they are doing? Quote:
‘Clean water on tap, a cow or two, desks for a school… a little lift from Oxfam is often all people need to transform their communities forever’
What are they doing spending donated money on assessing UK equality levels?
Working for the alleviation of poverty in the Uk by questioning its causes and suggesting solutions needing to be addressed. Isn’t that glaringly obvious as well as being a wholly charitable purpose?
I think charities clearly have a moral duty to spend money as they advertise they will do. I associate Oxfam with relieving extreme poverty – literally saving lives, in the very poorest parts of the world. This sort of work is political and not why most people donate to them.
This work is very definitely not political but it is very definitely political to say it is
The classic quote explaining your view is that if you feed a person it’s charity but if you ask why they ate hungry it’s politics. Of course it is not: they’re both about relieving poverty and ultimately the second is much more effective than the first
Unfortunately, Mr Worstall’s view is not uncommon and unfortunately an increasing number of individuals share this outlook. I personally think it is immoral and wicked to load up young people with debt in respect of higher education given that there is such a shortage of well paid jobs. Higher education is not a luxury, wouldn’t society as whole benefit from having better educated individuals?
The answer is an emphatic yes, but then they are more likely to challenge the status quo, which is the last thing that the elites want. Instead a system of control and rationing has been introduced into education. The precedent has been set and a “bridgehead of suppression” has been established, which can be extended at a later date.
The same control and rationing system is being introduced into healthcare, which will lead to death panels. The barriers on euthansia are being eroded and I really do fear for the future.
I have backed “Sell-Off – The Abolition of Your NHS” on the crowdfunding website
Startjoin.
https://www.startjoin.com/backers/project/NHS_SellOff
For more information, I recommend watching the second half of the Keiser report episode number 573
http://rt.com/shows/keiser-report/episode-573-max-keiser-878/
” There’s a lifecycle to wealth.” Families encompass the whole lifecycle and families are what this is about.