The number of British billionaires has increased by a fifth since the outbreak of the Covid pandemic, according to a report which calls for a progressive wealth tax to tackle rising inequality amid the cost of living crisis.
The charity Equality Trust said interventions by governments and central banks during the pandemic allowed an “explosion of billionaire wealth” in Britain at the expense of the rest of society, after fueling a boom in property values and the stock market.
At the outbreak of the global health crisis three years ago, the Bank of England and other major central banks around the world cut interest rates to zero and pumped billions of pounds into financial markets through their quantitative easing bond-buying programmes. Aimed to soften the edges of the worst recession in three centuries by supporting businesses, households and governments with lower borrowing costs, the report found the policies also helped inflate asset prices, helping to line the pockets of wealthy investors.
The Equality Trust said this had helped the number of UK billionaires rise from 147 in 2020 to 177 this year, with the median billionaire now worth around £2bn.
“This sudden explosion in extreme wealth was largely due to measures aimed at reducing the impact of Covid-19 on the economy, as central banks pumped trillions of dollars into financial markets, leading to a stock market boom that effectively lined the pockets of shareholders,” said Jo Wittams, chief executive of the Equality Trust, in a report published on Monday.
“While Covid-19 saw billionaire wealth rise to levels never seen before, the construction of the economic infrastructure that has enabled this mass accumulation stretches back over the past four decades.”
The report found that the number of billionaires in Britain had increased more than tenfold from 15 in 1990, when the Sunday Times first published its Rich List, after taking inflation into account over that time period.
Using inflation-adjusted wealth data from archive copies of the Rich List, it said the combined wealth of Britain’s billionaires had risen from £53.9 billion in 1990 to more than £653 billion in 2022. “This represents an increase in billionaire wealth of over 1,000% during the past 32 years, the report states.
“That we have allowed the very richest few to amass such a staggering amount of the nation’s wealth since 1990 is a national shame,” Wittams said. “Britain’s record on wealth inequality is appalling, grossly unfair, and poses a real threat to our economy and our society.
“Every year we are invited to celebrate the very wealthiest individuals and families in Britain, while the use of food banks continues to rise, 3.9 million children live in poverty and 6.7 million households struggle to heat their homes. That these are two sides of the same issue is very rarely mentioned.”
Wittams said inequality did not have to be inevitable. “The right policies can have a positive impact,” she said. “We call on the Government to tax wealth in line with income, reform the financial sector and end the UK’s role in tax avoidance. Two-thirds of the British public agree that ordinary working people are not getting their fair share of the nation’s wealth, and it’s time the government took action.”
Tax equality campaigners claim the government could raise up to £37bn to pay for public services if it introduced a range of wealth taxes.
Tax Justice UK has urged the government to introduce five tax reforms aimed at the very wealthy, who the campaign group said had done “very well financially” during the coronavirus crisis and national lockdowns, rather than seeking to save money with further cuts to public services.
– Tax is about political choices. At a time when most people are being hit hard by the cost of living crisis, it would be wrong to cut public services further, says Tom Peters, Tax Justice UK’s chief legal officer. “The wealthy have done very well financially in recent years. The Chancellor should protect public spending by taxing wealth appropriately.”
The campaign group, which calls for a “fairer tax system that actively redistributes wealth to tackle inequality”, proposes five wealth tax reforms.
The measures include aligning capital gains tax with income tax, scrapping the non-judgment regime and introducing a 1% tax on super-rich people’s assets above £10m – which, they claim, could be £10bn alone.