The scale of Britain's growing inequality is revealed today by a report from a leading charity showing that the country's five richest families now own more wealth than the poorest 20% of the population.

 

Oxfam urged the chancellor George Osborne to use Wednesday's budget to make a fresh assault on tax avoidance and introduce a living wage in a report highlighting how a handful of the super-rich, headed by the Duke of Westminster, have more money and financial assets than 12.6 million Britons put together.

 

The development charity, which has opened UK programmes to tackle poverty, said the government should explore the possibility of a wealth tax after revealing how income gains and the benefits of rising asset prices had disproportionately helped those at the top.

 

Although Labour is seeking to make living standards central to the political debate in the run-up to next year's general election, Osborne is determined not to abandon the deficit-reduction strategy that has been in place since 2010. But he is likely to announce a fresh crackdown on tax avoidance and measures aimed at overseas owners of high-value London property in order to pay for modest tax cuts for working families.

 

The early stages of the UK's most severe post-war recession saw a fall in inequality as the least well-off were shielded by tax credits and benefits. But the trend has been reversed in recent years as a result of falling real wages, the rising cost of food and fuel, and by the exclusion of most poor families from home and share ownership.

 

In a report, a Tale of Two Britains, Oxfam said the poorest 20% in the UK had wealth totalling £28.1bn – an average of £2,230 each. The latest rich list from Forbes magazine showed that the five top UK entries – the family of the Duke of Westminster, David and Simon Reuben, the Hinduja brothers, the Cadogan family, and Sports Direct retail boss Mike Ashley – between them had property, savings and other assets worth £28.2bn.

 

The most affluent family in Britain, headed by Major General Gerald Grosvenor, owns 77 hectares (190 acres) of prime real estate in Belgravia, London, and has been a beneficiary of the foreign money flooding in to the capital's soaring property market in recent years. Oxfam said Grosvenor and his family had more wealth (£7.9bn) than the poorest 10% of the UK population (£7.8bn).

 

Oxfam's director of campaigns and policy, Ben Phillips, said: "Britain is becoming a deeply divided nation, with a wealthy elite who are seeing their incomes spiral up, while 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."

 

The UK study follows an Oxfam report earlier this year which found that the wealth of 85 global billionaires is equivalent to that of half the world's population – or 3.5 billion people. The pope and Barack Obama have made tackling inequality a top priority for 2014, while the International Monetary Fund has warned that the growing divide between the haves and have-nots is leading to slower global growth.

 

Oxfam said the wealth gap in the UK was becoming more entrenched as a result of the ability of the better off to capture the lion's share of the proceeds of growth. Since the mid-1990s, the incomes of the top 0.1% have grown by £461 a week or £24,000 a year. By contrast, the bottom 90% have seen a real terms increase of only £2.82 a week or £147 a year.

 

The charity said the trends in income had been made even more adverse by increases in the cost of living over the past decade. "Since 2003 the majority of the British public (95%) have seen a 12% real terms drop in their disposable income after housing costs, while the richest 5% of the population have seen their disposable income increase."

 

Osborne will this week announce details of the government's new cap on the welfare budget and has indicated that he wants up to £12bn a year cut from the benefits bill in order to limit the impact of future rounds of austerity on Whitehall departments.

 

Oxfam said that for the first time more working households were in poverty than non-working ones, and predicted that the number of children living below the poverty line could increase by 800,000 by 2020. It said cuts to social security and public services were meshing with falling real incomes and a rising cost of living to create a "deeply damaging situation" in which millions were struggling to get by.

 

The charity said that starting with this week's budget, the government should balance its books by raising revenues from those that could afford it – "by clamping down on companies and individuals who avoid paying their fair share of tax and starting to explore greater taxation of extreme wealth".

 

The IMF recently released research showing that the ever-greater concentration of wealth and income hindered growth and said redistribution would not just reduce inequality but would be economically beneficial.

 

"On average, across countries and over time, the things that governments have typically done to redistribute do not seem to have led to bad growth outcomes, unless they were extreme", the IMF said in a research paper. "And the resulting narrowing of inequality helped support faster and more durable growth, apart from ethical, political or broader social considerations."

 

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."

 

http://www.theguardian.com/business/2014/m...cial-inequality

Edited March 17, 201411 yr by Danny

LAND VALUE TAX NOW

LAND VALUE TAX NOW

Ah yes, that policy that has been a Liberal dream for decades. The Mansion Tax would at least be a start.

It was attempted three (I think?) times by Labour governments but never survived the next Tory government.

And sadly, today's Labour party would never even dream of such a thing because in their deluded bubble they seem to think just asking greedy rich people to give up 10% more in tax is some radical left-wing action which is the complete limit of what they can do (while clobbering poor people and destroying public services with further cuts is "centre-ground" and "credible").

Edited March 18, 201411 yr by Danny

And sadly, today's Labour party would never even dream of such a thing because in their deluded bubble they think daring to take something away from people with huge estates would be "anti-aspirational" or some nonsense.

That's funny, I had no idea you felt like that.

Ugh, you got me before I edited it to something MARGINALLY less autopilot-esque!

Edited March 18, 201411 yr by Danny

Oh yawn. Land value tax isn't exactly anti-aspiration 'oh it'll send the rich people taking their business elsewhere!' fodder, given you can't exactly fly twenty acres of land to the Caymans. Even David Miliband was in favour of a mansion tax at the last leadership election - that's something with far more susceptibility to charges of being anti-aspiration, given it's far more likely someone would earn themselves a million pound house than half of Cheshire. Given he was in favour of the principle that underlined the mansion tax, it's fairly easy to see that most (if not all - short of someone like, oh, I don't know, Shaun Woodward) of the Labour Party would fall behind a land value tax if we managed to work out the logistics, which have historically been the biggest obstacle.

 

Plus, the land value tax is the obvious next step to actually bringing into action Ed Miliband's pledges of getting unused land owned by developers built on - he implied state seizures in his last speech, which probably wouldn't go down well (and which I'm not sure is even legal under EU law), but an LVT would actually give incentives to build on the land and make a profit out of it to cover the cost of the tax/sell it to someone else who'd do that.

 

Seriously Danny, you're starting to sound like those obnoxious TUSC/GRIMLY FIENDISH types who seem to base their entire rhetoric of what the Labour Party thinks on whatever Dan Hodges' last u-turn was. At least take a look at what most of the big beasts have said on this one!

Plus, there's a difference between taxing earned money and what is almost universally inherited wealth. A land value tax is probably one of the most perfect taxes in that regard anyway. I really wouldn't be shocked to see it as a potential ace in the hole in our next manifesto - lord knows it could potentially get us out of a lot of hot water on some of our uncosted/costed by 11 different bankers' bonus levy policies.

Oh yawn. Land value tax isn't exactly anti-aspiration 'oh it'll send the rich people taking their business elsewhere!' fodder, given you can't exactly fly twenty acres of land to the Caymans. Even David Miliband was in favour of a mansion tax at the last leadership election - that's something with far more susceptibility to charges of being anti-aspiration, given it's far more likely someone would earn themselves a million pound house than half of Cheshire.

 

I absolutely agree with you, but I really doubt the feeble Labour leadership share the same view, considering they start publicly trembling with fear anytime a pampered, self-delusional businessman criticises them when it's suggested they should be forced to pay up a bit more, and start parrotting to eachother that they need to be "pro-business" and "pro-aspiration". The very fact Ed Miliband or noone else from Labour has commented on this very story about 5 families speaks volumes, they should be condemning how a super-wealthy elite are ripping everyone else off and sucking up the wealth. Where was Labour's agreement with Vince Cable's very accurate statement that no-one needs a £1m salary per year, and that society should make it socially unacceptable to claim it?

 

Seriously Danny, you're starting to sound like those obnoxious TUSC/GRIMLY FIENDISH types who seem to base their entire rhetoric of what the Labour Party thinks on whatever Dan Hodges' last u-turn was. At least take a look at what most of the big beasts have said on this one!

 

Yeah, because only rabid Marxists think that it's grossly unfair to be planning more cuts for public services and the poorest in society, putting "the markets" ahead of said poor people and the fabric of society, and to be too cowardly to confront the super-rich. :lol: That explains why even some of the leading Labour moderates from the 1980s (David Owen, Roy Hattersley) are utterly appalled at what's happened to Labour in the past 15 years.

Edited March 18, 201411 yr by Danny

Yeah, because only rabid Marxists think that it's grossly unfair to be planning more cuts for public services and the poorest in society, putting "the markets" ahead of said poor people and the fabric of society, and to be too cowardly to confront the super-rich. :lol: That explains why even some of the leading Labour moderates from the 1980s (David Owen, Roy Hattersley) are utterly appalled at what's happened to Labour in the past 15 years.

The same David Owen that just rejoined the party?

 

In any case, my post wasn't stating that only rabid Marxists are unhappy with some of the decisions that are being taken. It's that the rhetoric of 'oh this might go against the interests of the rich, GUESS LABOUR MUST DEFINITELY BE AGAINST IT' is a meme all too inaccurate, all too blunt, and all too tiresome.

There's always going to be richer and poorer people, but these discrepancies are just far too great, and indefensible. More government intervention needed - here and elsewhere. Not only in Britain but outside it too. This is the case in all other Western Nations, there will always be rich and poor. Undeniably there's one law for the rich and another for the poor in turn making the rich only richer and so on.

 

The same David Owen that just rejoined the party?

 

The David Owen that refused to endorse Labour in the 2005 election because, in his words, they didn't care about equality enough.

 

On Roy Hattersley, do you really not find it unsettling that someone who not so long ago was considered one of the party's leading rightwingers, would today, based on this interview, be dismissed by you as putting forward ideas that were too extreme, unelectable, etc.? ("The Labour Party needs to demonstrate what it stands for. The most damning question asked of Tony Blair during his premiership was [David] Cameron saying to him, “Well, what is the Labour Party for?”"; "We’ve failed to demonstrate the need to actually spend… we may need to spend more money by borrowing it."; "I don’t believe there’s anything to be gained by attempting to win by being all things to all men, and saying, “We’re like the Tories, but a bit more compassionate”. Nobody’s going to vote for that. It has to be something distinctive and different.")

 

It probably is tiresome, but that doesn't make it any less true.

Edited March 18, 201411 yr by Danny

the fact that 5 families own more wealth than 20% of the population is obscene. No one can defend that in good conscious, No body has worked hard enough in their life or even in their ancestors lives that they deserved the same wealth as 5% of the nations poorest people