A comprehensive study conducted by Ben Tippet and Rafael Wildauer from the University of Greenwich has utilised data from The ‘Sunday Times Rich List’ (STRL) – a yearly publication(1989-2023) to uncover six critical findings that demonstrate an unsettling growth in wealth inequality.
The latest 2023 STRL paints a clear picture of the growing economic divide. The wealthiest 50 families hold more wealth than the bottom half of the population, totalling 33.5 million people. The collective wealth of the top 350 individuals comes up to a staggering £709.96bn – an amount equivalent to gifting every UK family £36,595.
Comparatively, when the STRL was first released in 1989, a wealthy individual was 6,000 times richer than the average person.
In the current scenario, the wealthiest person’s fortune is approximately 18,000 times that of the average individual – a threefold increase in the past three decades. The report suggests that wealth concentration is not just extreme, but it continues to rise year after year.
Despite the pandemic’s economic strain and the escalating cost of living crisis, the richest 200 families in the UK have witnessed a real wealth increase of 22% since the onset of Covid-19.
This increase alone, if redistributed, could afford every UK family over £9,000 – a jarring contrast to the average real wages that have seen a decline in the same period.
Simultaneously, the public sector’s wealth has dramatically dwindled over the past three decades. In 1989, the public sector’s wealth was far superior to that of the wealthiest families.
However, today, it stands at a negative position of minus £1,300.2bn (2023), while the richest 200 families have seen their wealth soar from £42.4bn in 1989 to £622.7bn in 2021.
This inverse relationship indicates an expanding private wealth concentrated amongst a few families, juxtaposed against an increasingly impoverished public sector.
The study warns that if the current trend continues, the wealthiest 200 people’s wealth would surpass the UK’s entire GDP by 2035.
The wealth at the top is growing exponentially faster than the country’s overall economy.
From 1989 to 2023, the richest 200 families’ wealth has grown annually by 11.6%, whereas the nominal and real GDP have only grown by 4.8% and 2.0%, respectively.
Worryingly, this wealth accumulation has not translated into a prosperous economy.
Since 1989, the increasing returns for the richest families have not resulted in higher GDP growth for the UK. In contrast, while the top 200 families’ wealth has grown from 7.6% before 2006 to 9.6% after 2007, real GDP growth has more than halved from 3% to 1.2%.
In an attempt to arrest this growing wealth inequality, the study presents a potential solution – a tax on the wealthy. Assuming a wealth tax set at 4%, the study argues, £18.66bn could be raised this year alone.
Meanwhile, as the UK grapples with an intensifying cost of living crisis, households across the nation are feeling the pinch in unprecedented ways, with vulnerable groups such as disabled children, students, and low income homeowners facing severe impacts.
This crisis is making itself known through various facets of life – from mortgage payments to cleaning supplies, broadband access, and even the ability to care for children with special needs.
Low income homeowners, already a vanishing species, are already grappling with potential increases to mortgage costs, as experts predict the Bank of England may hike interest rates by 0.25 percentage points.
This seemingly small increment could add up to a hefty £732 more per annum. Regions across England will experience the blow differently, with Londoners possibly shelling out an extra £61 a month, a burden that could further strain already overstretched budgets.
Adding insult to injury, the cost of everyday essentials is skyrocketing. Cleaning products like bleach have seen a staggering price increase of up to 90% in some supermarkets, straining the budgets of households trying to maintain a clean and healthy living environment.
Higher education isn’t immune from the crisis either, with nearly half of undergraduate students reporting that they have had to forego their studies to find paid work to cover the soaring costs.
This added financial stress threatens to compromise the quality of education and students’ wellbeing.
Broadband, once considered a luxury, is now a crucial part of modern life, essential for everything, from job applications to utility bills, online learning, and staying connected with loved ones.
However, the cost of broadband is becoming a luxury for many. A shocking survey by Citizens Advice found that as many as one million people in the UK may have disconnected their internet due to financial constraints.
This digital divide is particularly alarming for those on Universal Credit, who were six times more likely to cut off their broadband in the past year.
However, perhaps the most harrowing effects are felt by families of children with special educational needs and disabilities (SEND).
The Childhood Trust warns that these families are experiencing disproportionate financial hardship due to rising energy bills and inflation.
Even before the pandemic, these families required an extra £581 a month on average to maintain a similar standard of living as those without special needs.
With inflation, this figure is anticipated to be significantly higher now, placing immense stress on families trying to provide the necessary care and resources for their children.
As part of the solution to the crisis, charities such as the Childhood Trust are rallying support for grassroots initiatives such as the TAG Youth Club, which offers affordable activities for SEND children. They are offering respite and a lifeline in these tough times, showing how community effort can provide some relief in the face of this sweeping crisis.
Taken together, these findings indicate that the ongoing cost of living crisis and the crisis of wealth inequality should not be viewed as isolated struggles, but rather as intertwined manifestations of a much larger capitalist crisis.
It is becoming increasingly clear that there are no easy, distinct remedies for these issues.
Each of these crises has grown and continues to grow in the soil of a system where wealth and power are disproportionately concentrated in the hands of a few at the expense of the many.
The fact that the richest 200 families in the UK have seen their wealth increase by 22% since the onset of the Covid-19 pandemic, while the average real wages have declined in the same period, is indicative of a system that is failing a vast majority of its people.
The disparity between the few, who continue to amass wealth at an exponential rate, and the many, who are grappling with rising costs, falling wages, and dwindling public services, serves to highlight the depth and breadth of the problem.
The crisis of inequality and the cost of living crisis are both symptoms of a broader socioeconomic disease, stemming from decades of policies that have favoured privatisation over public welfare, accumulation of wealth over distribution, and corporatism over cooperation.
The solutions presented thus far, such as a tax on the wealthy, can provide temporary relief, but they do not address the underlying structural issues perpetuating these crises.
Instead, what is needed is a comprehensive societal overhaul – one that places the needs of the many above the wealth of the few.
The establishment of a workers’ government, where those who produce the wealth have control over how it is distributed and used, could provide a radical and sustainable solution to these crises.
It would involve a shift from a system that prioritises profit and accumulation, to one that prioritises people and their wellbeing.
The concentration of wealth at the top is not just an economic problem – it’s a social, political, and moral problem.
Only by dismantling this concentration and instituting systems that favour equitable distribution and justice, can we hope to address the dual crises of cost of living and wealth inequality.
Until then, these issues will continue to be recurring symptoms of a much deeper, systemic malady.