The number of UK billionaires has increased by a fifth since the onset of the Covid pandemic, according to a report calling for a progressive wealth tax to tackle rising inequality amid the cost of living crisis.
The Equality Trust charity said interventions by governments and central banks during the pandemic allowed for an “explosion of billionaire wealth” in Britain at the expense of the rest of society, after fuelling a boom in property values and on the stock market.
At the onset of the global health emergency three years ago, the Bank of England and other big central banks around the world crashed interest rates to zero and pumped billions of pounds into financial markets through their quantitative easing bond-buying programmes. Aimed at softening 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 contributed to the number of UK billionaires increasing from 147 in 2020 to 177 this year, with the median billionaire now holding about £2bn.
“This sudden explosion in extreme wealth was in large part due to measures aimed at lessening the impact of Covid-19 on the economy, as central banks pumped trillions of dollars into financial markets, leading to a stock market boom which effectively lined the pockets of shareholders,” Jo Wittams, co-executive director of the Equality Trust, said 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 last four decades.”
The report found that the number of billionaires in the UK had risen more than tenfold from 15 in 1990, when the Sunday Times first published its Rich List, after taking into account inflation 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 £53.9bn in 1990 to more than £653bn in 2022. “This represents an increase in billionaire wealth of over 1,000% over the past 32 years,” the report said.
“That we have allowed the very richest few to accrue such a staggering amount of the nation’s wealth since 1990 is a national disgrace,” Wittams said. “The UK’s record on wealth inequality is appalling, grossly unjust, and presents a real threat to our economy and to our society.
“Every year we are invited to celebrate the very richest individuals and families in the UK, while food bank usage continues to increase, 3.9 million children are living in poverty and 6.7m households struggle to heat their homes. That these are two sides of the same coin 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 incomes, reform the financial sector and end the UK’s role in tax avoidance. Two-thirds of the British public agree that ordinary working people do not get their fair share of the nation’s wealth and it is time the government took action.”
Tax equality campaigners claim the government could raise up to £37bn to help pay for public services if it introduced a string of wealth taxes.
Tax Justice UK has called on the government to introduce five tax reforms targeting the very wealthy, who the campaign group said had done “really well financially” during the coronavirus crisis and national lockdowns, rather than seek 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,” said Tom Peters, Tax Justice UK’s head of advocacy. “The wealthy have done really well financially in the last few years. The chancellor should protect public spending by taxing wealth properly.”
The campaign group, which is calling for a “fairer tax system that actively redistributes wealth to tackle inequality”, suggests five wealth tax reforms.
The measures include equalising capital gains tax with income tax, scrapping the non-dom regime and introducing a 1% tax on super-rich people’s assets over £10m – which, they claim, could raise £10bn on its own.
