Economy
Wealth inequality costs ‘deeply divided’ UK £39bn a year
The wealth gap in Britain is continuing to widen and is not only having an impact on people’s quality of life but also the economy, two separate studies have found.
The first report, from Equality Trust, argues that the social consequences of inequality, including reduced life expectancy, mental health problems and higher levels of imprisonment and murder, cost the country over £39 billion each year.
The current UK approach to dealing with social problems is remedial and doesn’t look at root causes, the report argues. This means inequality is overlooked. The organisation describes this as a “mistake” and says inequality would not have to be eradicated entirely for the whole of society to benefit.
“Small changes to our level of income inequality would make the public purse richer, individuals healthier, and the UK a more pleasant society to live in”, the report adds.
The Equality Trust said that all political parties that are serious about reducing social problems must include policies aimed at reducing the gap between the richest and poorest in their manifesto.
The second report, published by Oxfam, demonstrates how wide the wealth gap is in Britain. The research found that the five richest families in the UK are wealthier than the bottom 20% of the population, the equivalent of 12.6 million people.
Over the last two decades, the charity’s study shows that the wealthiest 0.1% have seen their income grow nearly four times faster than that of the poorer 90% of the population. In real terms, this means the wealthy elite have seen a £24,000 rise in their income each year compared with only a few pounds for the vast majority of British people.
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 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 charity pointed to the rising number of people using food banks to show how many Britons are now living below the poverty line. Last year, Citizens Advice reported a 78% increase in food bank enquires. A recent investigation found that local authorities across the UK are now providing around £3m worth of support to food banks.
Oxfam is calling on the government to take action and tackle the issue. Phillips added, “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.”
Further reading:
New York set to overtake London as top global city for ultra-wealthy
Global wealth as ‘all-time’ high of $241tn, but inequality still rife
Wealth of billionaires grew in 2013 despite global austerity
‘We need to tackle the root causes of inequality and poverty’