The number of UK billionaires has increased by a fifth since the start of the Covid pandemic, according to a report that calls for a progressive wealth tax to tackle rising inequality amid a cost-of-living crisis.
The charity Equality Trust says government and central bank interventions during the pandemic have allowed a “billionaire wealth explosion” in Britain at the expense of the rest of society, after boosting property values and the stock market.
At the start of the global health emergency 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 programs. Aimed to cushion the edges of the worst recession in three centuries by supporting businesses, households and governments with lower borrowing costs, the report found the policy 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 average billionaire now worth around £2bn.
“This sudden explosion of 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 pockets. shareholders,” Joe Withams, chief executive of the Equality Trust, said in a report on Monday.
“While Covid-19 saw the wealth of billionaires soar to unprecedented levels, the construction of the economic infrastructure that enabled this massive accumulation stretched over the past four decades.”
The report found that the number of billionaires in the UK has increased more than 10-fold since 15 in 1990, when the Sunday Times first published its inflation-adjusted rich list.
Using inflation-adjusted wealth data from archival copies of the Rich List, it says the total wealth of Britain’s billionaires has grown from £53.9bn in 1990 to more than £653bn in 2022. over the past 32 years,” the report said.
“That we have allowed the richest few to amass such a staggering amount of the nation’s wealth since 1990 is a national disgrace,” Withams said. “Britain’s record on wealth inequality is appalling, grossly unfair and a real threat to our economy and our society.
“Each year we are invited to celebrate the UK’s wealthiest individuals and families, 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. The fact that these are two sides of the same coin is rarely mentioned.
Withams said inequality is not necessarily inevitable. “The right policies can have a positive impact,” he 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 £37 billion to help pay for public services if it introduced a series of wealth taxes.
Britain’s Tax Justice has called on the government to implement five tax reforms aimed at the very wealthy, who the campaign group says have done “really well financially” during the coronavirus crisis and national lockdown, rather than seeking to save money through further cuts to public services. .
“The tax is related to political elections. At a time when most people are suffering from a cost of living crisis, it would be a mistake to cut public services even further,” said Tom Peters, Head of Advocacy at Tax Justice UK. “Over the past few years, the wealthy have done well financially. The chancellor must protect government spending by properly taxing wealth.”
The campaign group, which calls for a “fairer tax system that actively redistributes wealth to tackle inequality”, is proposing five wealth tax reforms.
The measures include aligning capital gains tax with income tax, scrapping the offshore regime and introducing a 1% tax on the super-rich’s assets of more than £10m, which they say could alone amount to £10bn.