Don’t tell me they’ve made this mistake, please!

The scale of Britain’s growing inequality is revealed today by a report from a leading charity showing that the country’s five richest families now own more wealth than the poorest 20% of the population.

I’m looking around for a copy of the report itself but I’m finding it very hard indeed to believe that they’ve been as stupid as they appear to have been so far.

21 thoughts on “Don’t tell me they’ve made this mistake, please!”

  1. How many of this 20% are children? How many students? How many on benefits in rented or owned by someone else (parents?) accomodation?
    Seriously have to think poor as I am I probably have more wealth than most of the children in this country.

  2. Given that a large number of people are in debt at any given time, someone with a pound to their name and no debt is richer than a significant percentage of the population.

  3. someone with a pound to their name and no debt is richer than a significant percentage of the population.

    Including quite a few of the 0.5% who, despite their income, have significant outgoings and negative equity on both their house and their holiday home.

  4. Martin Davies –
    You could argue that children have more time, and time is money, therefore children have a form of wealth. From an accounting perspective, humans are pieces of factory equipment: a 20 year old machine will for another 50 years, assuming good maintenance; whereas a 65 year old one has less time to run, and a higher failure rate.

    So when calculating wealth, we might choose to factor in age; as this report failed to do.

    (In some jobs the older worker will have accrued skills, and thus will be more productive than the younger; I’ll leave that calculation as an exercise for the reader.)

  5. SE,

    “Including quite a few of the 0.5% who, despite their income, have significant outgoings and negative equity on both their house and their holiday home.”

    The 0.5% pay cash, or live in nice parts of London or the SE, where there is no negative equity. Northern Rock’s 110% mortgages were rare in Knightsbridge.

    But I agree that the poorest in asset terms are bound to have bugger all – indebted paupers leaving Cambridge with a First in economics, and other such unfortunates. My other pet peeve is those sitting on a pile of cash who say inflation hits the poor most.

  6. Andrew I was figuring wealth as in equity, assets that can be sold that are in their own name etc.
    Otherwise could very well say every single child is a millionaire in wealth!

  7. Luke,

    0.5% comes down an awful long way. It wouldn’t buy you a shed in Knightsbridge. In fact, the LHTD and his wife are 0.5%ers. Although I have no idea whether they are in negative equity.

    The whole point was that income and wealth inequalities do not necessarily have much commonality between those afflicted.

  8. It’s slightly off-topic, perhaps, but I notice that of the five richest families, two are old money and three are people who started small and built up a large business.

    Or at least that’s how it’s portrayed in the article, though if I understand correctly the Reubens and Hinduja families were both fairly well-off 50 years ago.

    It does read oddly, though: the UK is terribly unequal, and you can tell how unequal it is by the way that all the rich people – apart from the ones (who we will imply have poor backgrounds) from ordinary families and those from overseas – are from rich Establishment families…

    You could take exactly the same facts and virtually the same presentation to write an article about how the crusty old UK Establishment is gone, replaced by social and international mobility… 🙂

  9. Pellinor,

    You could, if you weren’t a committed leftist demanding greater imprecations upon “the rich”*.

    You could also say that Britain, despite the weather, is a remarkably good place to live, as shown by the number of the internationally extremely wealthy who chose to live here.

    * Or the “1%” or whatever target has attracted your bile this week.

  10. @ Paul
    That report mentions a claim about wealth distribution in the USA but I could not see anything in it about 5 Britons having as much as the bottom 20%.

  11. SE,

    “0.5% comes down an awful long way.”

    Well, it comes down 0.5%. Generally considered “not an awful long way.” Not being Abramovitch does not make someone a pauper.

    I agree entirely that looking at wealth can be misleading – I am in my own right wealthier than the poorest 10% of households combined, since they have negative net wealth. (Source: Jonathan Portes on twitter today.)

  12. @ WCWC
    Thanks. It reads like a particularly dishonest Labour party pamphlet that wants to hide the vast increase in inequality under New Labour, and claims that “the highest earners in the UK have had the biggest tax cuts of any country in the world” when the top decile has had the largest tax increases of any sector of the populace since 2010.
    So the Hindujas are British?
    The richest British family comes 81st on Forbes’ list and even including the Hiundujas only four British families in the top 250, rather small in view of our position as sixth largest economy in the world. There are only two, compared to 10 from Russia and six from China, and two from famously egalitarian Sweden with less one-sixth of our population, in the top 100. Maybe Oxfam should be tackling inequality in Sweden, Russia and China?
    Oxfam say they have taken the wealth of the bottom 20% from a Credit Suisse study but give no link so there is no way to find out whether they have made any particular mistake (clever!). But we can spot that their one example is seriously phoney – this poor family in Devon who are struggling because their rent is £800/month – except that the first website I looked at had over 400 available 3-bedroom properties in Devon for less than £80/week (and only a handful for over £100/week) so they are *allegedly* paying two-and-a-half times the going rate.

  13. John77, your £80 per week rent in Devon is incorrect.

    I’ve just checked on Rightmove, and yes it looks like there are lots. But if you look at the details page, those are house-shares. Yes it’s £80 per week and it’s a 3-bed house, but it’s £80 per week per bedroom, not for the whole house.

    The cheapest 3-bed houses I could find in Devon are £550 per month and it depends a lot on which part of Devon you’re in; cheapest 3-bed in Exeter is £750, Plymouth is even more expensive.

  14. Oxfam is a charity which raises money with pictures of starving babies in Africa. The labour party is a political movement that believes in tax and redistribution to make the world ‘fairer’. On the basis of this, those working for the former appear to be confused into thinking that the money donated to their organisation was in fact intended for the latter.

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