The UK could benefit from a citizens’ wealth fundby Stewart Lansley / September 12, 2017 / Leave a comment
Last week, Liberal-Democrat leader Vince Cable joined the long list of politicians who have warned of the dangers of excessive inequality. But strong as the speech was on the problem, it was much weaker on solutions.
If we are serious about creating a less unequal society, we need a much more focussed strategy on wealth. The national wealth pool in the UK (personal and public)—some £14 trillion—is close to seven times the annual output of the economy, a ratio that has risen sharply in recent decades.
Wealth—and how it’s distributed—matters. High levels of personal wealth can boost wellbeing while publicly owned wealth provides the state with a stream of income and helps to offset national liabilities. Yet, the UK’s growing wealth mountain is not being harnessed for the public good. Younger generations have less wealth at each point in life than earlier generations; the state has sold off most of its family silver while private wealth holdings, often unearned, are lowly taxed and their use weakly regulated.
Wealth is heavily concentrated
The 20th century trend to greater wealth equality is now in reverse. Wealth is much more unequally distributed than incomes. Capital ownership is even more concentrated—so much for a share owning democracy.
Because of such concentration, the considerable returns from wealth (in dividends, rent and interest) accrue disproportionally to the already rich. The more wealth booms at the top, the more it undermines the life chances of those left out of the party. Moreover, because of rollin…