Magazine article New Statesman (1996)

'Britain Is Now Back to Levels of Gross Income Inequality': The Rich Are Getting Richer, Faster. Yet Those Who Call into Question Their Rights to Such Great Wealth Are Accused, Even by Those on the Moderate Left, of the "Politics of Envy"

Magazine article New Statesman (1996)

'Britain Is Now Back to Levels of Gross Income Inequality': The Rich Are Getting Richer, Faster. Yet Those Who Call into Question Their Rights to Such Great Wealth Are Accused, Even by Those on the Moderate Left, of the "Politics of Envy"

Article excerpt

In the past decade and a half, a remarkable revolution has been taking place in Britain--a great surge in both the numbers of the mega-rich and the level of their wealth. Since 1997, the number who own more than [pounds sterling]5m has nearly doubled. According to the Sunday Times, which has been chronicling the country's rich since 1989, the number of people worth [pounds sterling]100m or more has increased from 90 in 1990 to 411 today. The combined worth of the top 200 richest people in Britain--a mixture of entrepreneurs, businessmen, City deal-makers and landowning aristocrats--has more than trebled over the same period.

The past two decades have not just coincided with a swelling of the ranks of the mega-rich and their personal wealth holdings. Fortunes that it would once have taken a lifetime to accumulate can today be built in a few years. For example, Philip Green, the clothing entrepreneur who owns Bhs and Topshop, has gone from having very little to [pounds sterling]3.6bn in just over a decade. That is electric speed by historical standards.

The forward march of the super-rich has profound implications for Britain. It is changing the structure of the class system with the addition of a layer of the new mega-rich, parallel to but different from the old upper class, which is largely in decline. It is also the central driving force of the sharp rise in inequality over the past two decades. Twenty years ago, Britain was one of the most equal societies in the developed world. Recent international estimates suggest that although the United States tops the rich-nation inequality league, Britain is the second most polarised.

Britain is now back to levels of gross income inequality that are higher than those last experienced at the end of the 1940s (see table on page 28). Official figures for the share of wealth enjoyed by the top 1 per cent show inequality hovering at the levels they were more than 25 years ago. According to Tulip Financial Research, specialist wealth consultants, the top 45,000 people (0.1 per cent of the adult population) enjoy one-third of all liquid assets (marketable wealth that includes cash, savings and shares) averaging more than [pounds sterling]8m each.

Britain may not be back to the extreme levels of inequality that prevailed up until the 1920s, when a tiny proportion of the population--a mix of the landed aristocracy and the new industrial and commercial barons--held an even greater share of the nation's wealth and income. In those times, however, the constraints on wealth-making were much weaker, monopolies could operate largely unchecked, the Inland Revenue was in its infancy, and trade unions were few and regulations minimal. It was a society in transition, and that degree of inequality was eventually to prove unsustainable.

What is surprising is how, in today's much more mature democracy and with its complex regulated economy, the top few thousand individuals are able to win such large shares of Britain's economic wealth.

The question of inequality used to divide the political parties and the public. In recent times, however, a consensus has emerged, straddling the bulk of political and much popular opinion. Tony Blair has applauded the rise of a new wealthy superclass, and has invited a good number of its members to tea at No 10. As he put it, "I don't care what David Beckham earns. I want a society that encourages levelling up, not levelling down."

In today's conventional wisdom, it is seen as churlish and certainly old-fashioned to question the increase in wealth owned by those at the top. To do so invites the risk of being accused of the "politics of envy" not just from the right, as would be expected, but from much of the moderate left as well. This acceptance of growing levels of personal wealth is perhaps one of the defining characteristics of the shift away from the social-democratic values that used to dominate postwar politics and opinion. …

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