The wealth of billionaires in Britain has increased by 1100% in the 32 years between 1990 and 2022.
- In 1990 there were 15 billionaires who controlled £53.9 billion in wealth.
- By 2022 there were 177 billionaires who controlled £653.1 in wealth.
These increases reflect a wider increase in inequality in the UK more generally. However the increase in wealth at the very top, such as billionaires, has been the most extreme.
Most of the increase has been driven by an increase in the number of billionaires, but there has also been a concentration at the very top. The top two billionaire households in 2022 controlled as much wealth as the bottom half of billionaire households in 1990.
Billionaire wealth has increased due to the structure of the UK economy. It has continued to increase post-Covid despite the wider population facing economic crises.
Billionaires are not uniquely hard working, or intelligent, or creative. Instead, billionaires are better seen as the primary beneficiaries of an economic system which produces huge levels of poverty and inequality, and has left the UK particularly vulnerable to the multiple, overlapping crises we have faced over the past few years.
This blog post is a summary of ‘Billionaire Britain’, a report from the Equality Trust.
Measuring Billionaire Wealth
There is no quality data source on wealth in the UK at the national level. This is because there is no systematic recording of wealth when it is taxed. The Wealth and Assets survey suffers under-reporting from the very wealthiest households.
The Times Richlist is the most comprehensive source, but this could miss out on various assets and under-report wealth.
Billionaire Britain uses data from the Times Rich List.
From a research methods perspective this is an interesting example of how power shapes data collection. The very richest are the most powerful and the UK government doesn’t systematically track data on their wealth. In fact, tracking is poor that Billionaire Britain estimates at least £4.4 billion of property investment in the UK has been bought by corrupt individuals.
Why are there more billionaires in Britain?
Two underlying structural changes have enabled massive accumulation by those at the top:
- Firstly, the financialisation of the UK means that those with wealth now have greater returns on their investments. This is due to corporations focusing on profits over wages and the inflation of asset prices.
- Secondly, deregulation has resulted in less restrictions and fewer taxes on wealth. This has attracted more wealth to the UK.
Of the 177 on the 2022 billionaire rich list 42 gained their wealth through investing and 39 through real estate.
Financialisation is where the financial industry becomes more important to the economy as a whole.
The finance sector consists of a range of different industries from investment companies (including real estate investments), stocks and shares funds, hedge funds, and insurance and pensions.
In a primarily finance based economy, the production of tangible products is less important, and many of the financial services seek to make returns trading financial instruments without creating anything of any value.
One consequence of a financialized economy is asset price inflation. Financial companies invest in assets such as houses and land for a return (rather than seeking to develop land or improve houses themselves) which pushes the prices up.
A second and related consequence is more households taking on debt. This is increasingly required to buy more expensive assets, such as housing.
A third consequence is more companies seeking profit over wages and quality services. They become more concerned with providing dividends to shareholders over paying decent wages.
In terms of service provision, energy and water companies have extracted billions in profits over the last years. Shareholders have got richer as a result. However the infrastructure is now crumbling in many cases, as evidenced with things such as leaky water pipes.
All of the above has resulted in a more unequal society as a few benefit from financialisation. Meanwhile at the bottom end people have relatively less money AND worse services.
What are the solutions to increased wealth and the inequality this causes?
The Equality Trust suggests five courses of action…
- Introduce a progressive wealth tax. That means the wealthier you are the more tax you pay!
- Make corporate ownership more democratic, so more people have a say in what happens to profits.
- Regulate the financial sector more.
- Return essential services to public ownership.
- Improve tax transparency and end tax havens.
- Create more community wealth funds to invest in areas that need it most.
Relevance to A-level sociology
This material is an important update for anyone interested in wealth and income inequalities in the UK.
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