Lesley Riddoch: Why rich list is a poor reflection on UK
The make-up of the list of top earners has changed but that doesn't make it alright, says Lesley Riddoch.
At long last the Sunday Times rich list has more self-made billionaires than folk with inherited wealth. Whoop. whoop.
In 1989, the newspaper’s inaugural guide to wealth was dominated by the landed gentry and just 43 per cent of those listed made their money themselves. Now, in what’s billed as an important transformation, 94 per cent of Rich Listers are self-made men and women. There are a record number of women – 14 per cent compared to just 4.5 per cent in 1989; the proportion of Rich Listers from ethnic minorities has risen and apparently several arrived here as refugees. So that makes it all right.
According to Rich List compiler, Robert Watts; “Britain’s rich are getting richer, but the cast of Britain’s 1,000 richest people is an ever-changing and increasingly diverse cast of people.”
This diversity of wealth is slightly interesting – but the ever-growing concentration of wealth in a few hands is truly important. Yet the focus is entirely on the latter. The idea we should relax about vast inequality because the richest man didn’t inherit his wealth, is a sad reflection on British society. It shows we have just reached the British version of the “American dream” – the powerful myth that the poorest person can make good – as the rest of the adult world understands that free, high quality education and health care offer a far better chance of progress in life than becoming the one in a million able to gather vast personal wealth. But such has been the grip of landed and inherited wealth on our lives that the arrival of “common as muck” Jim Ratcliffe in the top rich spot seems to represent progress.
It’s bizarre. The founder of chemical giant Ineos is worth £21.05 billion. Somehow the almost offensive nature of such personal wealth is offset by the fact he was raised in a council house, fired from his first job after just three days and had a father who left school without a qualification before setting up as a joiner.
But Jim the hardworking Likely Lad grew up. In 2013 he forced redundancies and deep cuts to pay and pensions on his Grangemouth workforce. He threatened to close the massive chemicals plant unless he got his way, leaving humiliated workers with no choice but to accept those cost-cutting plans. Meanwhile Ratcliffe himself lives in Switzerland as a tax exile. He also moved the headquarters of his company there for tax reasons after accepting millions in government grants for his businesses.
Nice. Are Radcliffe’s council house origins really more significant than the fact he has accrued more wealth than several small African states?
The thousand richest people in Britain now share a record total wealth of £724 billion, up 10 per cent on last year’s figure. The wealth of the poorest 40 per cent is a mere £567 billion. Meanwhile four million children of working parents are living below the poverty line because of benefit cuts, a growth in poverty that has accelerated at roughly the same rate as the rich list. Is there a connection?
You betcha. Far from “trickling down”, much of this wealth is stuck at the top, invested in unproductive financial assets that provide few jobs for ordinary people, or squirrelled away in offshore tax havens. Consider the fact that twelve of the 21 wealthiest city financiers – all Rich List members – have bolstered Conservative Party coffers with an eye-watering £15.6m. One such donor is Mike Platt, the UK’s wealthiest hedge fund manager, worth over £3bn. Like working class Jim, Mike is a Preston boy, who worked his way up on the back of a £500 loan from his grandma to invest in Britain’s privatised utilities. No wonder he’s paid back handsomely to the party of Margaret Thatcher – £225,000 since 2004. Privatisation, deregulation, and protection for the City of London have turned money-market speculators into very rich and powerful self-made men and women. But the fact they didn’t inherit their cash is far less important than what they’re doing with it.
Paying taxes doesn’t seem to be high on the agenda.
The rich list doesn’t offer a guide to the biggest taxpayers as a percentage of income. It wouldn’t be offshore Jim Radcliffe or aristocrat Hugh Grosvenor – who apparently avoided death duties because the properties he inherited are in a trust. In fact his cleaners probably top the tax-paying list, yet while the super-rich have been getting richer, they, like most employees, have suffered a decade of wage stagnation. The real value of wages is £24 a week less than it was in 2008. In a tiny space at the back of the Rich List sits the most interesting section: who gives what. Only nine of the top 1,000 super rich give more than 10 per cent of their wealth to charity.
In truth, the rich list doesn’t represent change. The diversity of “new money” masks a deep-seated continuity – the quaintly Anglo-American belief that trickle down from rich individuals helps the little people below and thus measuring wealth is the best way to measure social progress. Even the alternative rich list idea, designed to curb complaints about the annual money fest, betrays the same underlying belief in the power of the individual to mitigate the misery caused by poverty that arises as predictably as night follows day in a society that doesn’t tax wealth, doesn’t tax transfers between generations and doesn’t crack down on tax avoidance and evasion.
Individuals – wealthy or benevolent – are far less important in our national story than cold, calculated political decisions.
Ironically, the Scottish Government also encourages the belief that individuals (in the form of more, better empowered/trained teachers) can overcome the problems experienced by children raised in the chaos, instability and anxiety created by poverty. It’s always puzzled me that Nicola Sturgeon has asked to be judged on the outcomes of education, when success in narrowing the attainment gap is so hugely determined by the existence of chronic inequality – something the Scottish Government can hardly control.
I know it’s deeply unfashionable, but equality in our society matters far more than the presence, diversity or identity of rich and even heroic individuals. Maybe if we spent more time on the former, we’d need fewer of the latter.