I thought I was just dealing with the consequences of my choices. It took me a while to realise I was also navigating the intricacies of policy in practice.

Growing up, I imagined policy as something abstract, something confined to a dusty grey lever-arch file on a bookshelf in a musty office. Not something that would directly impact my life. Maybe others’. But not mine. Which, in hindsight, is often how policy works.

I was 17 when I became pregnant. There’s a particular kind of silence that follows news like that. Not a peaceful silence. I had to leave home.

And this is where policy quietly enters my personal story – not loudly, not dramatically, just… administratively. Which, as it turns out, is how a lot of life-altering things are managed.

I needed to find a home, but at 17 I wasn’t old enough to enter into a tenancy agreement, and I couldn’t apply for housing benefit until I turned 18. Policy had drawn a line. Not around need, but around a number.

I’m sure there are very sensible reasons for this. Not least because numbers are very tidy; much tidier than people. But the fact that I was legally old enough to become a parent, yet not legally old enough to house us, felt like a plot hole.

When I turned 18, housing benefit came through. And for all its blunt edges, it worked. It kept a roof over my head during the final phase of my pregnancy and gave me nine months of something that felt like stability – long enough to begin learning how to be someone’s mum. (It also gave us both nine months of breathing in black mould that was never sorted before I left. Mould was dealt with by a different department...)

There’s a stereotype about teenage mums. You know it. I know it. It’s loud, it’s lazy, it’s irresponsible, and it’s deeply uninterested in nuance. Nuance is not a strong performer in the public imagination. It doesn’t test well in focus groups. So I imagine most people won’t have read this far assuming I had a full-time job when I fell pregnant. But I did.

I went on maternity leave just before my 18th birthday and quickly my income dropped from a whopping £750 a month to about £90 a week of Statutory Maternity Pay. Statutory pay sounds reassuring. Like it comes with a cup of camomile tea and someone saying, “it’s all going to be okay”. But £90 a week didn’t quite stretch. It did, however, introduce me to a less-than-ideal budgeting strategy: bill-paying roulette.

(For anyone wondering – council tax is not the one to skip. That one escalates quickly. With letters. And a stern tone. And eventually, bailiffs - which is a particular spice of scary as a young single woman with a newborn.)

This is what I’ve learned about policy: it can be a safety net and a tightrope at the exact same time. And sometimes you don’t realise which one it is until you fall off.

At 19, I applied for a job at the local authority. Let’s be clear – I was not the strongest candidate. My experience included six months in admin, during which I was once compared to Howard from Take That. Talented; full of potential; just not in the currently required category. (No shade on Howie, I was personally quite the fan.)

By any reasonable interpretation of recruitment policy, I shouldn’t have got the job. But I was interviewed by Andrea. She asked why I wanted the job. I told her the truth: I had a baby, and I wanted more for her. More for us.

Now, that answer probably didn’t score highly on the official scoring sheet. But Andrea did something policy doesn’t quite know how to contain: she used discretion. Discretion is a disruptive concept in systems that favour consistency and rules, valuing what can be measured and plotted neatly on graphs. Humanity colours way outside of those particular lines.

Andrea chose to look beyond the stereotype and saw me not just as a teenage mum trying her luck, but as a young person she could give an opportunity to. Her decision changed the trajectory of my life, which is quite a lot of responsibility for an early interview slot on a Monday morning.

Every time I’ve had the chance to do that since – to pay it forward – I have. Because I know what it makes possible. With my first proper pay cheque, I set up a standing order to my daughter’s Child Trust Fund – a government-launched, tax-free savings account – for £10 a month. Always the relentless optimist. The government contributed £1,000, and by the time she turned 18, that mix of policy and persistence bought her first car.

Policy can be pedantic, but it can also be possibility. But then there are moments where policy feels more like a game of chess, where one small move forward can cost you the game.

I remember the first food parcel I handed out. (Not technically my job. I was explicitly told as much. But everyone was at lunch, I knew where the key was, and I decided to explore my own relationship with discretion.)

A young mum – let’s call her Alice – came in with her baby. Her partner had received a small bonus at work. A recognition of his hard work. A good thing. Unless, of course, you’re thinking several moves ahead.

The small (taxable) bonus nudged their income just over the threshold for child tax credits – by a few pounds. Which meant they were issued a repayment notice. Not for the few pounds. For an entire year of payments. The “overpayment” was more than the (taxable) bonus. Which sounds less like maths and more like a twist in Traitors.

So in order to repay money they didn’t have, this young, working family had to ask for a food parcel. At the time, food banks required proof. Forms. Limits. Three parcels total. Because crises, like most things, are managed by systems. And systems like efficiency. “Work hard, but stay in your lane”, said policy inadvertently.

By this point, I was earning £850 a month. The childcare bill I needed to pay in order to go to work was also £850. Fortunately, those costs were covered by the tax credits I qualified for, reserved for the lowest income households. So, one part of the government paid me a salary it already knew wasn’t enough, while another stepped in to fix it, with rules. Which is either excellent co-ordination, or multiple opportunities for things to go very wrong. And those tend to tell their own story.

By 21, I knew I wanted to be a youth worker. I’d felt the deep value of youth and community work – from both sides. So I applied to university. And then I learned that students aren’t eligible for tax credits. So I traded income support that I didn’t need to repay for a huge debt that I am still paying back today. I wouldn’t change a thing, but it did feel like progress had a high interest rate.

And then 2010 happened. I was in the university library with my classmates from the youth and community degree course when one of them took a phone call (clearly breaking library policy). They said their boss had just been made redundant and the youth service had been cut. We laughed. Because sometimes the only appropriate response to something completely absurd is to assume it’s a joke. It wasn’t.

I didn’t graduate into the career I’d been building towards. That path had been removed by a policy decision made far away from that library. Which is impressive, really - the ability of policy to change someone’s life, for better or for worse, in an instant, and from a distance. But I did carve out a career at the intersection of education and youth and community. A career that ended up becoming a vocation. Just not in the linear way I’d once imagined. And my work is better because of that.

By the time I graduated, I started working full-time. My income was now higher than in my previous job, but still not quite enough to cover essentials. I wasn’t eligible for tax credits because I had been a student that financial year. So we became homeless. Not homeless enough for help. But homeless, nonetheless. Which is a very specific category.

Most of our belongings went into storage. Some of the more important things - such as my signed Take That poster - were housed in my office. The essentials came with us to a log cabin (a large shed at the bottom of a garden). Temporary, I thought. Which is what you always think about things that last longer than they should.

I called the housing department at the local authority and asked to be put on the housing waiting list. They told me there was no point. We weren’t a priority or considered homeless according to their policy, because we had a roof over our heads. “Even though it’s made of wood, has no hot water or kitchen - and we’re sharing a bed?”, I asked. Yes, they said. And because I assumed the rules were being applied as they were written, we lived outside them for a while.

To be continued…

Policies aren’t intentionally designed to cause harm. But they aren’t necessarily designed together either, or by those most likely to be affected by them. So they overlap. They collide. They compound. And become the status quo.

And many of us - knowingly or not - play a part in sustaining that. Which can be uncomfortable. And useful to notice. The more I understand this, the harder it is to ignore.

I’m grateful for the support I received – I just no longer mistake it for a solution.

I’m increasingly meeting people who are committed to shifting systems. And they are succeeding. These people aren’t just talking about fairness - they’re attempting it. Which is messier, and slower. But necessary. Because that’s how real change happens. And that gives me hope - even if nuance still isn’t a particularly strong performer.

This piece was written by Charlie Chan, Director of United Communities. It was sparked by a conversation with Will Snell, CEO of the Fairness Foundation, at the Anthropy National Gathering 2026. Charlie was able to be at Anthropy through the generosity of UK Acumen Academy and United Learning.

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In an interview with the Fairness Foundation’s Jack Jeffrey, Brett Christophers (Professor of Human Geography at Uppsala University) argues that Britain’s post‑1970s “neoliberal” turn was less about rolling back the state and more about actively reshaping ownership, monetary policy and regulation to create protected zones of rent extraction, particularly in housing, land and infrastructure. He explains how stagnation, rising asset prices and post‑crisis monetary policy have entrenched rentierism and asset manager power, leaving governments dependent on private capital for investment and with few credible alternatives short of compulsory or quasi‑nationalised investment.

Jack Jeffrey (JJ): You suggest that neoliberalism in Britain — and I promise that’s the last time I’m going to use that word — wasn’t really a project of deregulation, but more an active political construction of secure, protected zones of rent extraction through monetary and fiscal policy, and asset ownership regimes. The conventional post-1970s story is of a state retreating from the economy, rather than, as you say in Rentier Capitalism, actively redesigning it in ways that advantage particular asset holders. I’m interested, just to kick things off, in why that is?

Brett Christophers (BC): I don’t like to oversimplify things, but I think a big part of the reason is that once David Harvey had written A Brief History of Neoliberalism (2005), which was one of the first books on the subject, the slew of books that followed had it that neoliberalism was very much centred around the rise of a market society. The story became about the ways in which key resources in societies come to be allocated and distributed, and the question of ownership of resources and assets disappeared somewhat.

One part of what I’ve been trying to do over the last decade or so, but particularly in Rentier Capitalism, is to say: hang on a second, there’s an important story about ownership here. It’s always seemed to me that if we want to call the period since the 1970s in the UK the neoliberal period, the transformations in patterns of ownership were much more significant than transformations in the ways in which resources were or weren’t distributed and allocated. The emphasis on marketisation is not so much wrong, but rather only part of a wider story. In the British case, more so perhaps than elsewhere, this is a story where the default model of ownership became private ownership by capital. This had been a part of Harvey’s book – the restoration of class power was essentially about ownership – but it wasn’t made explicit.

JJ: I think people are slowly staring to understand this. Your work, alongside others like Common Wealth, has done a very good job of shifting the focus onto questions of ownership. You can even see it on parts of the right too — a suspicion of foreign capital buying up large swathes of British industry, and so on. I think this is not just a left or right issue now.

BC: Yeah, absolutely. Getting away from the UK context, if you look at Donald Trump coming out and saying that we need to ban institutional investor ownership of single-family housing in the US, that’s another great example of what you might call a populist politics of ownership transcending traditional political boundaries. I remember when I first started to write about institutional investment in housing, I had political actors on the right reach out wanting to talk about my research – I said no. But it is unsurprising that this issue does cut across traditional political boundaries, in so far as it is completely trampling on the home ownership dream that is so integral to rightwing politics.

It’s slightly different in the UK. Big institutional investors as owners specifically of housing is less of a problem than ownership of other types of critical infrastructure — energy, transport, water and wastewater.

That idea of a property-owning democracy worked for a long time in a UK context, because the effect of deregulating and liberalising housing finance, and the Right to Buy scheme, had a kind of democratising effect, whereby you did open up the possibility for home ownership to a wider social spectrum. From the early 1980s until the mid-2000s you had growing rates of home ownership, from around 55 per cent, when Thatcher came to power, up to a peak of around 70 per cent. That reinforced Thatcher’s argument about a property-owning democracy.

What then happened was all of that entailed a massive increase in house prices. You reached a point by the mid to late 2000s where affordability constraints kicked in, particularly among young people. That was when you saw the home ownership rate peak and begin to come back down. But it wasn’t just about affordability restrictions kicking in. It was also about the growth of the buy-to-let market. Potential young homeowners were now competing not just with one another, but with buy-to-let investors.

We’re now at the point where, unless you’re in banking or consulting or a few other very highly paid professions, if you’re in the London and the South East and you’re under 40, you have no hope of buying housing unless you have parents who can leverage their own home ownership. The housing market has become a vehicle for the reproduction and exacerbation of class inequality through generations. And that is only going to become a more significant social phenomenon over time.

JJ: I’m really interested in this. There is obviously a lot of momentum behind the agenda of taxing extreme wealth. There is something I find sympathetic in that narrative, but I’m much more convinced by arguments from people like Lisa Adkins in The Asset Economy — that one of the things Piketty that misses in Capital in the 21^st Century is that lots of people, not just billionaires, are implicated in this economy, in this political economy, that has organised more and more of itself around asset ownership. That’s the problem.

And especially in the UK, we have a culture in which people have been encouraged to speculate on the housing market. Which, as you say, has had catastrophic effects on those who aren’t already participating in this system. But unlike in the US, where blame can more easily be directed at large institutional investors, it seems a lot more difficult to identify a single obvious bad actor in the British context.

BC: The buy-to-let market in the UK is a fascinating case. I think there are now around three million people in the UK who own a second, or more, residential property. The vast majority of them are not super-rich people. If you look at the data, the median income before rental income of most buy-to-let investors is pretty average, or even below average.

As I see it, these people look around them at a chronically stagnant UK economy and think about how they can better their own circumstances. The Fairness Foundation has done some really interesting research on this issue. A few years ago, they asked people about five or six different hypothetical wealthy characters — a sports person, someone who inherited their money, an entrepreneur, a financial investor, and a landlord — and asked what people thought of them. Did they get their money fairly? Did they get it through hard work? Is this type of wealth generally available to people? And the landlord came out pretty well. That doesn’t surprise me, and I think it’s really telling. Eighty years ago, if you’d asked the same question, everyone would have been relentlessly negative about the landlord. But people now see buy-to-let investment as one of the few ways to get ahead.

I do not think moralistic takes on buy-to-let are very helpful, because buy-to-let is a symptom, not a cause. It tells us something about the kind of political economy Britain has become. To say that landlords are simply terrible people is to miss the point. The more important question is why rent extraction has become such a central feature of economic life. Many buy-to-let investors are simply trying to secure themselves in an economy where other avenues for security have disappeared. It is a more interesting, more socially significant, and more complex phenomenon than many critics, especially on the left, are willing to acknowledge.

JJ: The relationship between rentierism, growth, and productivity is one of the most important questions in contemporary political economy. How robust is that relationship, and what is its causal direction? Does rentierism actively produce stagnation by channelling capital into extraction rather than innovation, or does prolonged stagnation encourage rent seeking as economic actors adapt to a low growth environment? I suspect it works both ways.

These are particularly important questions in the British context, where political debate is now dominated by the language of growth. But a lot of that discourse treats growth as an abstract imperative rather than asking more fundamental questions about Britain’s economic model, and why it might be organised in ways that systematically frustrate genuine wealth creation.

BC: I’ll begin by saying that I’m by no means an expert on the statistical or quantitative nature of that relationship. But what I will say is that it obviously, as you say, works both ways.

There’s clearly a relatively strong argument, which has been around for a long time now, that a slowing of economic growth itself encourages rentierism. A big part of the literature on what changed in the economies of the Global North from the 1980s onwards was that you had declining rates of profit and economic stagnation, and that was why financialisation occurred. You get these cycles where, once mature economies go into stagnation in the productive economy, investment shifts into the unproductive financial or rentier economy. I have a lot of time for those arguments.

But the way I looked at it in Rentier Capitalism was the other way around. Yes, stagnation in productive investment can shift investment into unproductive investment, but it also works the other way: once your economy becomes more focused on ownership and control of monopolistic assets of various kinds, that in itself tends to create economic stagnation. You have actors who become principally interested in protecting those existing assets, policing them, trying to ward off competition to the income-generating qualities of those assets. That creates a very stagnant environment in which you’re not getting much by way of innovation and productive growth. It’s classically symptomatic of that kind of environment that, in the UK’s case, the data suggests that the biggest source of economic growth in recent decades has been precisely land, and the buy-to-let sector. That could only happen in a scenario in which the rest of the economy is doing dreadfully. You would be unlikely to see that almost anywhere else in the world.

JJ: One of the things that struck me across both your work on rentierism and your more recent work on the asset manager economy is the central role of monetary policy, particularly quantitative easing and the prolonged period of low interest rates after the financial crisis. Central banks appear repeatedly to have acted in ways that sustain asset prices and, in doing so, to have reinforced both rentier incomes and the business models of asset managers. How far do you see central banks as having become key institutions through which rentierism and asset manager power are reproduced?

BC: That was obviously a really important period. When I was working on Rentier Capitalism and looking at rentier dynamics in different parts of the economy — finance, intellectual property, natural resources, infrastructure, land and housing — I kept seeing the same types of actors across all these different sectors, namely asset managers, specifically private equity-type asset managers like Blackstone, Macquarie Group, Brookfield and others.

I wanted to understand more about these financial institutions – which is why I wrote Our Lives in Their Portfolios – and to figure out why it was that in the UK, but not only in the UK, they had seemingly become much more important as owners of key types of physical infrastructure in society, including housing, but not only housing — energy infrastructure, water and wastewater infrastructure, transport infrastructure, telecommunications infrastructure and so on.

What I found when I was doing the research for that book was that this had become a particularly significant phenomenon, as you say, after the financial crisis in the 2010s. That’s not to say that these institutions weren’t investing in housing and municipal waterworks and gas transmission systems before then, but the growth of that investment really surged after the financial crisis. And, as you say, a big part of that was the new macroeconomic environment.

A useful way of thinking about this is to think about the nature of financial investment and what institutional investors are looking for. They’re looking for two different things, in varying combinations. First of all, they’re looking for capital gain. They want to invest in something and then, when they sell it later, they want to sell it for more than they bought it for. But they’re also looking for income. Ideally, when you hold an investment, you want it to generate an annual yield. Different types of investors are interested in different combinations of capital gain and income, but historically investors looking for income have relied principally on fixed-income financial securities, i.e. bonds. They would buy government treasuries or, in the UK case, gilts; they would buy corporate bonds; and those bonds would pay an annual coupon — anywhere between 3-7 per cent roughly — and provide an annual yield, alongside some dividends from stocks. But it was primarily bonds that supplied that annual income.

After the financial crisis you had a long period where interest rates globally fell to zero or close to zero, in some cases below zero. Suddenly, big institutional investors and asset managers were faced with a situation where bonds weren’t providing meaningful annual income anymore. In that environment, investors asked themselves, where could they find that annual income? Real estate and infrastructure were a big part of the answer. Instead of investing in bonds paying 1 per cent annual income, you could invest in housing or commercial real estate, which would provide annual income because of the rents being paid. Or you could invest in infrastructure because of the fees being paid by users of that infrastructure, whether toll roads or mobile-telephone transmission towers or whatever else it might be.

That was a huge part of the reason for the massive growth of real-estate and infrastructure investment by institutional investors, and in particular asset managers, in that post-2008 period. There was this turn to physical assets — so-called real assets — as a reliable and substantive source of income. You can’t understand what happened there without paying significant attention to monetary policy.

As I hinted at earlier, in the UK, this was principally an infrastructure story. For example, a lot of money in the UK went into the water companies. When privatisation happened in the water sector — and also in the electricity sector, to use another example — it principally happened through what had been state-owned public enterprises being floated on the stock market. What then happened was that those public companies were taken private by asset managers. They were delisted and became private. Thames Water would be the classic example. Macquarie Group became the majority owner of Thames Water in 2006 and owned it up until 2017. Obviously today, Thames Water is a basket case, but in many ways it’s a quintessential example.

Elsewhere in the world, as I mentioned, it was more of a housing story. In the US, Germany and Spain there are very significant examples where asset managers became, and remain today, huge owners of residential property. I think the reason that hasn’t happened in the UK yet is that, along with countries like Australia, residential housing ownership is incredibly fragmented in the UK. There aren’t many big owners of rental housing, by which I mean entities that own significant portfolios of rental housing. Most of the UK’s private rental sector is in the hands of small buy-to-let landlords.

The UK’s biggest private-sector residential landlord is a company called Grainger, which I’m sure almost no one will ever have heard of. It owns only about 11,000 rental homes, which compared to the portfolios of big investors in the US, Spain and Germany is chicken feed. The fact that the big asset managers are not significant owners of housing in the UK is not because they don’t want to own housing. It’s because the opportunities to buy large portfolios — which is their modus operandi — simply aren’t there.

If you’re a big asset manager, you’re not in the business of spending £100,000 here and £200,000 there. You’re in the business of spending hundreds of millions. It’s not transactionally efficient to do piecemeal acquisitions.

That’s why, in the UK, when you hear about these guys, you hear more about the build-to-rent market. But what they’ve also realised is that building housing isn’t particularly profitable. It’s much more profitable to own portfolios of already-existing housing and rent them out than it is to build them.

JJ: Just one last question on the monetary landscape. Now interest rates have ticked up a little bit, do you think that will change anything going forward? Are the conditions for that asset manager society disappearing?

BC: On the infrastructure side — and I’m focusing here not just on the UK but internationally — it definitely has made a difference. When I wrote that book, which was written in 2022, interest rates were just rising again because of the uptick in inflation. Central banks tightened monetary policy, interest rates went up, and while they’ve come back down a bit, they’re still higher than they were during the 2010s. That has definitely had an impact on infrastructure investment by financial investors. We’ve definitely seen less of that in recent years, and those big investors have only been willing to continue investing in infrastructure where it has been made particularly favourable for them to do so. This is where the language of de-risking comes in. What they’ve said is: we will continue to invest in infrastructure, and potentially develop new infrastructure, but only if governments make it really favourable to us by taking the risk off our hands, and guaranteeing certain levels of revenue.

On the housing side, the market has remained much more robust internationally. Once asset managers got into housing in a big way in the 2010s, they realised what a good business it was. They realised just how profitable it was to be owners of rental housing, particularly in parts of the world that are supply-constrained. In cities where, because of various zoning restrictions, there are significant constraints on new construction, those constraints obviously help put upward pressure on rents. They’ve realised that it can continue to be profitable to own portfolios of rental housing even though interest rates have gone up.

The other thing worth mentioning is the way they’ve tried to boost profitability by seeking out cheaper sources of debt financing in that higher interest rate environment. The main such source has been private credit funds. Historically, if you were Blackstone and you wanted to invest in infrastructure or in housing or commercial real estate, around 40 per cent of the money for that investment would be equity, but you would borrow the rest — around 60 per cent — in order to leverage the investment and enhance the returns. You would go to banks for that debt financing. But what’s been happening in recent years is that increasingly you would go to non-bank debt financiers, namely big private credit funds. They provide a much cheaper source of debt financing, which is a way for asset managers to boost their equity returns.

In short, they’ve found ways of maintaining the profitability of this real-asset investment even in a higher interest rate environment.

JJ: Sticking with asset management, in a paper that you co-authored with Benjamin Braun, you make a distinction between three related issues. You have asset managers as profit-making firms in their own right; secondly, as shapers of other capitalist enterprises; and thirdly, as shapers of capitalism and society at large. Why are those distinctions analytically important, and how are they held together?

BC: I think they’re important simply because otherwise the discussion can, and does, get very confused. There’s lots of terminological and conceptual slippage when people talk about asset managers. We tried to draw that distinction as a way of imparting a bit of order into how we collectively as commentators and scholars talk about asset managers and their role in contemporary capitalist society. It’s clearly the case that asset managers have become enormously more significant within capitalism in recent decades. And it’s worth saying a bit about why that is and putting some numbers on it.

At a very basic level, an asset manager — despite the almost infinite variety in operating model, size and investment focus — is a financial investment institution distinguished by the fact that most, and sometimes all, of the money it invests is not its own. Asset managers invest other people’s money, whether that’s retail investors like you and me, or institutional investors, particularly pension funds, insurance companies and so on. Most of the money that BlackRock or Blackstone invest is not their own money. The vast bulk of it is money that they are investing on others’ behalf for a fee — or, in reality, for various different types of fees: management fees, performance fees and so on.

If you go back to the 1970s, the total amount of capital that asset managers globally had at their disposal — the amount of money they managed on behalf of others — was in the order of about $1 trillion. Today it’s over $100 trillion. Asset managers have gone from very insignificant institutions to very significant institutions, purely measured by the amount of capital at their disposal, the amount of money they are managing.

Why has that happened? Two things have changed between the 1970s and today. First, there is simply more surplus capital swilling around the world now than there was then. The big sources of that growth in surplus capital are pension funds, sovereign wealth, and insurance companies. There are more retirement savings now than there were then. Pension capital has become much more significant. There is more sovereign wealth around — a lot of this is to do with oil wealth, but not only oil wealth. And insurance has become a bigger business, and the premiums we pay represent capital that insurance companies manage and invest in order to make a profit.

The second thing, which is equally significant, is that those ultimate holders of surplus capital invest that money not themselves but through asset managers. Pension funds, sovereign wealth funds and institutional investors now routinely hand much of their money to firms like BlackRock and Blackstone, on the grounds that these firms have the expertise, scale and infrastructure to allocate it more effectively. The result is that investment decisions are increasingly mediated by a relatively small number of asset management firms, which earn fees for deciding where capital should go.

You put those two trends together — more surplus capital, and more of it being outsourced to asset managers — and that’s how you get from $1 trillion to over $100 trillion.

Now, in what ways have they become more important? What matters first is that asset managers have become major capitalist institutions in their own right. So one line of analysis is simply to treat them as a sector of accumulation: how do they make money, how much money do they make, and what is distinctive about their business models? In other words, asset management is not just a conduit through which capital passes. It is itself a profit-making sector that needs to be understood on its own terms.

Second, asset managers matter because they invest in, and thereby shape, the rest of capitalism. They do not simply sit outside the productive economy; they are deeply embedded in it through ownership and control. Sometimes that means outright ownership, as in private equity. Sometimes it means large minority stakes, as with BlackRock, State Street and Vanguard. The classic numbers are that the average S&P company is around 9 per cent owned by BlackRock and around 30 per cent owned collectively by BlackRock, State Street, Vanguard, Fidelity and so on. Even where they do not own firms outright, they can still exert significant influence over how companies are run, what strategies they pursue, and what counts as acceptable performance.

The point about BlackRock and the other large index managers is not that they control every company in some simple, unified sense. It is rather that, through the growth of index funds and diversified holdings, they have become “universal owners”: institutions with a stake in a vast swathe of the corporate economy. That changes the ownership landscape even where day to day control remains indirect.

The third question is broader again. Once asset managers have become central both as firms in their own right and as owners of other firms, we need to ask what this does to capitalism as a whole. How are industries reorganised when asset-manager logics become more pervasive? How are states, regulators and macroeconomic policy shaped by their preferences? How does the wider political economy change when these institutions become central nodes in the allocation of capital? This is the broadest analytical register in the paper you mentioned, not just asset managers as firms, or as owners of firms, but as institutions that shape the wider organisation of capitalism and society.

These three levels are analytically distinct, but they hang together. Asset managers are profit-making firms; they make those profits by investing in and influencing other firms; and as those relationships become more widespread, their priorities and business models begin to shape the wider contours of capitalism itself. That is why it makes sense to separate the questions, but also to see them as parts of a single process.

One obvious way that this broader power appears is in politics. When people once thought about the political clout of finance, they mainly thought about banks. Now, increasingly, they think about asset managers. The symbolic shift from Goldman Sachs to Larry Fink or Steve Schwarzman tells you something real about how power within finance has moved. The financial sector has changed, and with it the key institutions to which political leaders increasingly orient themselves. That does not mean that banks no longer matter. It means that asset managers have become central enough that they now have to be understood as major political-economic actors in their own right.

JJ: Last question. A lot of these institutions have incredible amounts of capital to deploy. Combine that with a scenario where states don’t have the capacity and resources that they once did to build infrastructure. What do we do in that scenario? Politicians are, for understandable reasons, desperate for these institutions to invest in Britian, but that comes at a price.

BC: It’s one of the most salient questions of our age. We live, on the one hand, in a moment where asset managers control the bulk of surplus capital available for investment. That’s the first thing. The second thing, as you say, is that we also live in an age of extreme fiscal conservatism, where governments believe — or have allowed themselves to be led to believe — that they can do much less in terms of public financing and public investment than was historically the case.

I don’t want to get into too much detail about the extent to which that belief is true or false. I’m definitely not one of those people who says it’s all a myth, and that governments can still borrow cheaply and freely and won’t be punished by bond markets. There is a degree of financial reality we shouldn’t dismiss out of hand, not least in the Global South, where fiscal constraints are even more severe than they are in the Global North. In any case, whether it’s based on economic fundamentals or not, governments now have to a significant extent taken public financing and investment off the table.

The third thing, as you say, is that we are in a situation where, not least in a country like the UK, a huge amount of investment is required in infrastructure and particularly climate infrastructure for both mitigation and adaptation purposes.

Put those three things together and it really isn’t surprising that the likes of Reeves are cozying up to asset managers. Once you take public investment off the table, what else are you going to do? You turn to private capital if you want to get anything done.

Certain colleagues of mine on the left will insists that if private capital is the only answer, let’s discipline private capital. Let’s not de-risk that capital. Let’s say its investment is welcome, but conditional, and impose robust conditions on the terms on which it invests and the amount of profit it can make. That’s a nice story in theory, but the reality is that as soon as you say that, they threaten to take their money elsewhere. That’s the political-economic reality. I think this idea of conditionality is very nice, but it conflicts pretty gruesomely with the political reality we are facing.

You see this in sectors such as water. Historically, whenever Ofwat has signalled that it intends to take a tougher line — recognising that water companies have been abusing the situation by continuing to release effluent into rivers, and that the response must involve more serious fines and more robust regulation — large institutional investors and asset managers have been quick to warn that they may withdraw from the UK. And of course, as soon as they say that, the government panics and capitulates And I do kind of get it. We are caught between a rock and a hard place. I’m not sure what else governments can do if public-sector financing and investment is taken off the table. You are just left with private capital, and it is very difficult to discipline private capital when private capital can go on capital strike.

The only alternative, as I see it, is basically — if not nationalising industry — then quasi-nationalising it through compulsory investment of various kinds. People often like to use wartime analogies when they talk about climate. In wartime, governments force capitalists to invest in certain ways. Are governments in the Global North even close to forcing capitalists to invest in certain ways today? No, they are not remotely close.

That’s the only alternative, as I see it. But right now we are in this very unfortunate situation where public investment isn’t happening, and private investment only happens if governments de-risk it sufficiently to guarantee a certain level of profitability.

That is exactly where clean energy investment is in the UK. Big offshore wind investment is only happening because the UK government is guaranteeing a certain level of return sufficient to call forth that investment. And, to be clear, if the choice is between, on the one hand, de-risking private investment in clean energy and allowing major investors to earn guaranteed returns of 9 or 10 per cent, and, on the other, refusing to do so on principle and thereby failing to deliver the investment at all, I would choose the former every time. The regrettable part is that these have come to seem like the only options available. That’s the best way I can put it.

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In February 2026 a group of academics, policymakers and campaigners met to discuss Stuart White’s new book, The Wealth of Freedom.

Co-hosted by the UCL Policy Lab and the Fairness Foundation, the roundtable set out the republican idea of freedom as non-domination and asked what follows when that ideal is taken seriously in an economy marked by large and persistent concentrations of wealth.

The public have competing views on the subject of wealth inequality, and so the discussion also asked how a republican account could make wealth inequality more politically salient in the UK.

A better frame for thinking about wealth disparities, and for raising awareness of its negative spill-over effects, could be less of a focus on quantitative differences, and more on the nature of those differences, especially an emphasis on dependency, domination and freedom.

Below are some reflections from Stuart White. You can read an extended write-up of the roundtable on our website or download a PDF.

Wealth is power. Those who lack wealth are more dependent on others for many of the resources they need, and this can make them vulnerable to domination by those on whom they are then dependent – employers, landlords, creditors, spouses, or state bureaucrats. Those who hold at least some wealth have more capacity to avoid these relationships of domination. On the other hand, those with wealth can use this to buy political influence. They might make donations to parties which get them favours, seats in the House of Lords, or even use extreme wealth to buy social media platforms which they can redirect to suit their own political agenda. In this way, the rich can start to dominate the rest of us through their outsized influence on policy. A distribution of wealth, then, is not just an inequality as measured by, say, a Gini coefficient. It is a particular configuration of social and political power with direct and substantial implications for our freedom.

This is why a democracy requires a robust economic floor and a robust economic ceiling. The job of the floor is, in part, to protect people from being too dependent on the will of others, from being vulnerable to domination by those on whom they are otherwise dependent. The job of the ceiling is, in part, to limit the power of the very rich so that they do not dominate the rest of us in our political life. In my book, The Wealth of Freedom, I explore some of the ways we might try to institute a robust economic floor and ceiling. I discuss, for example, the potential role of a universal basic income in helping to set the floor, and the role of inheritance and wealth taxes in helping to set the ceiling.

As these policy ideas suggest, however, setting a robust floor and ceiling will require concerted action by the state. One problem highlighted in the roundtable discussion on the book is that people today often lack trust and confidence in politics to do the kind of heavy lifting which this implies. Given the oligarchic skew of our supposedly democratic politics, this is not unreasonable. So we appear to be in a bind. We need action to limit wealth inequality in order to protect - or create - democracy. But we need a functioning democracy to do what is necessary to limit wealth inequality.

There is no easy solution to this. But a constructive response must be to combine a reform programme focused on building an economic floor and ceiling with a political reform programme. This political reform should aim at once to push back against oligarchic power and to rebuild popular trust and connection with the democratic state.

In part this has to involve new and much more effective measures to cut down the power of money in UK politics. This includes a review and overhaul of electoral funding and party donations; of the rules that allow MPs and former MPs to take employment such as paid advisory roles; and of the rules around lobbying. I suspect that reforms in these areas, of a radical kind, would be popular with the general public. They would speak to the concern about corruption which the discussion at the roundtable raised.

To get meaningful reforms of this kind, however, we need to look to other ways of empowering citizens to have more influence on the political agenda and to increase the responsiveness of politicians to popular concerns. This may connect to some long-standing issues with the UK political system such as electoral reform. But we should also think creatively about how new forms of representation might contribute. Imagine, for example, that we have the right to initiate Citizens’ Assemblies (CAs) in chosen topics, such as the rules around lobbying and money in politics. What would a properly resourced CA recommend in this area? How might a CA help to set a fresh agenda on this topic and help build public interest in reform that overcomes inevitable resistance? What could a CA similarly contribute to setting a policy agenda around public broadcasting or the control of social media platforms?

Political influence is also crucially affected by the degree of popular association in society. Trade unions, for example, matter not only because of the benefits they can deliver for their members. They matter also because of the way they shape wider power relations. A democratic society with strong and encompassing trade unions will have a force capable of pushing back against the power of the very rich that a society with a weak trade union movement does not. It will, in this respect, be a much more democratic society. Here economic and political reform agendas come together. Reforms to labour law to promote wider trade unionism help simultaneously to build a more robust economic floor and a counter-weight to the excessive power of business corporations and the very rich.

The project of building a robust economic floor and ceiling should not be approached, then, as a technocratic policy-making exercise. It must be approached as part of a wider, deliberately anti-oligarchical project that combines economic and political reform to shift the balance of power in our society – and thereby to help rebuild public confidence in the capacity of the democratic state to address our problems.

Stuart White, Nicholas Drake Tutorial Fellow in Politics and Associate Professor of Politics at the University of Oxford

Read the full write-up

This month, we deepened our focus on the structural inequalities shaping people’s lives. Across our work, we explored how Britain’s economic model continues to entrench unfairness, and considered how policymakers can help to set out a clearer path towards a fairer future.

On 19 March we launched Escaping the State We’re In, a major new report by Will Hutton, Chair of our Advisory Board. It revisits, and radically updates, the arguments that he first made thirty years ago in The State We’re In, setting out how Britain can rebuild an economy capable of delivering prosperity, fairness and long‑term investment. In the process, Will argues for a new model of capitalism that can deliver economic and social good outcomes, based on the unifying value of fairness.

In the report, Will argues that Britain’s economic malaise is the result of decades of underinvestment, policy failure and a political system that has failed to reform. The consequences are now visible in stagnant living standards, declining public health, and a business environment in which too many promising firms are sold abroad or never scale at all.

The report lands at a moment when debates about Britain’s economic model are intensifying, and then the country needs a fundamental rethink of its political economy.

Across think tanks, business groups and even parts of government, there is a growing recognition that the UK’s low‑investment, low‑productivity equilibrium is unsustainable, leaving the country more exposed, more unequal and less capable. It also connects directly to our wider programme of work on wealth, extraction and democratic reform.

Our model of capitalism is currently shifting economic activity away from public markets. Instead of backing entrepreneurial businesses that create value, the system has become skewed towards industries that extract wealth. An economy that relies on asset inflation rather than productive investment inevitably concentrates power, undermines trust and produces zero-sum outcomes.

The report argues that Britain can still become a fairer, stronger and more confident country, but only if it ‘grips the reins’ of capitalism more firmly by mobilising investment, disciplining extraction, rebuilding state capacity and aligning growth with the common good.

Earlier in the month we published A Tale of Two City‑Dwellers, a joint report with the Black Equity Organisation that examines the racial wealth gap. It combines facts and figures on this pernicious gap with two detailed case studies to bring the evidence to life.

In the report, “Josh”, a White British charity worker, and “Anthony”, a Black Caribbean railway shunter are both 30, live in London, and earn similar salaries, but their life chances diverge sharply because of unequal access to family wealth. The case studies illustrate how wealth, or the lack of it, compounds across education, work, housing and mental wellbeing. They also show how racial inequality and wealth inequality intersect, creating a feedback loop that reinforces disadvantage over time.

The report reveals how wealth inequality now shapes life chances more decisively than income, exacerbating a range of racial inequalities which are the product of both historical discrimination and contemporary policy failures.

The report draws on other research, such as The Runnymede Trust’s Colour of Money report from 2020, which analysed ONS data to show that for every £1 owned by White British households, Black African and Bangladeshi households hold only 10p. It also includes contributions on ethnicity pay gap reporting, timely given the recent Cabinet Office consultation on the issue, with the government’s positive response published last week.

We’re grateful to the cross-party MPs who joined us in Westminster to launch the report at a breakfast roundtable this month (and particularly to our host Adam Jogee MP for sponsoring the event). As Britain prepares for major debates on tax, housing and economic reform, this work reminds us that racial inequality remains central to the conversation.

We also published a long‑form interview with Andy Burnham, Mayor of Greater Manchester. In a wide‑ranging conversation with our Advocacy Manager, Jason Bunting, the Mayor discussed how devolution can help unlock fair growth, and how political reform is needed to drive a fairer economy across the country.

He drew a sharp distinction between growth that enriches communities and growth that extracts value without building long‑term prosperity, mirroring our own work on wealth extraction and the need for an economy that rewards innovation, not rent‑seeking. The Mayor also made the case for devolving land, property and business taxation as a way to give places the tools they need to shape their own futures. This aligns closely with our December report A Fair Share, which argued for a long‑term vision for fiscal powers at the local level.

Read the full interview

Perhaps most striking was the Mayor’s argument that meaningful devolution would be best unlocked through Westminster reform, including an elected second chamber representing the nations and regions.

Of course, regional inequality remains one of Britain’s most persistent structural problems- and one of the most obvious and pressing examples of unfairness in the economy. The Mayor’s comments helped to connect the dots between fairness, devolution and national renewal, a theme we’ll continue to explore.

Fortunately, the argument for greater fiscal devolution appears to be gaining momentum, as evidenced through the Chancellor’s announcement in her Mais lecture that she will develop a roadmap for future fiscal devolution, including plans to give regional leaders control of a share of some national taxes.

This month we also published a new blog by our Senior Researcher Jack Jeffrey. It explores why Britain’s property tax system is widely acknowledged as unfair, outdated and distortionary, yet has proven so resistant to reform.

As Jack lays out, property taxation is, of course, a political issue which is rooted in the central role that home ownership plays in Britain’s social imagination. For many people, property is not just an asset but a symbol of security, independence and moral worth. Any reform is therefore interpreted not as a system fix but as a personal threat. Yet Britain’s reliance on property wealth has distorted the economy, widened generational divides, and entrenched inequality.

As Lisa Adkins and others have argued, we now live in an “asset economy” in which access to appreciating assets matters more than wages or productivity. This helps explain why even modest reforms, such as revaluing council tax bands, face fierce resistance, despite widespread recognition that the current system is unfair and notwithstanding recent developments such as the introduction of the High Value Council Tax Surcharge.

Those are issues that have been advanced at length by a range of campaigners and organisations, notably the Fairer Share campaign which has built significant momentum for reform and is currently running a petition calling on the Government to replace Council Tax, Stamp Duty and the Bedroom Tax with a Proportional Property Tax.

The politics of property taxation sits at the intersection of several themes we’ve been exploring, such as the rise of wealth over income as the driver of inequality, the difficulty of reforming systems that benefit powerful groups and the need for a new political economy that reduces reliance on asset inflation.

If you’d like to discuss any of this month’s work, collaborate on future projects, or share your reflections, we’d love to hear from you.

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Last Thursday, the Fairness Foundation and the Policy Institute at King’s College London hosted the launch of Escaping the State We’re In at a reception in the Houses of Parliament.

The report, written by celebrated political economist, commentator and author Will Hutton, comes thirty years after the publication of Will’s seminal work The State We're In (the best-selling economics book since the second world war). It sets out the changes needed to Britain's politics and economy to build a more successful, fair and confident country, arguing that bolder action is needed to support great value-generating companies and repair Britain’s frayed social contract. Will makes the case for an approach to economic growth that rewards genuine entrepreneurship and innovation while tackling disabling levels of inequality and boosting the capacity of the state to achieve these twin fundamental aims.

Read the report

The launch event on Thursday brought together five speakers to interrogate that proposition, explore the state of Britain’s political economy, and consider how the country might rediscover a sense of direction and possibility.

Will Hutton opened the evening by acknowledging the shadow cast by current geopolitical instability. “I’m keenly aware that the Iran war may last rather longer than President Trump expects,” he warned, noting that the conflict is likely to become “an energy war as much as a military war.” That environment, he argued, sharpens the stakes of the economic debate. Questions about Britain’s “productive capacities, national resilience, [and] defence capabilities” are immediate and unavoidable.

These problems beset an already fragile economy that is marked by levels of wealth inequality not seen since the 19^th century. There has also been an enormous shift in the pace and breadth of technological innovation, the fourth industrial revolution that spans photonics, robotics, artificial intelligence, digitisation and life sciences. But this revolution has been complicated by the increasing “privatisation of capitalism”: the growing share of economic activity taking place in private markets, private equity, private credit, private infrastructure, family offices. These structures can drive innovation, but they also risk “monopoly… unaccountability… dense concentrations of wealth… [and] a new precariat.”

However, far from languishing in despair, Will used the occasion to make a powerful argument about a fairer economy and country, built on the inarguable strengths of Britian today. Britain is, in his words, “astonishingly entrepreneurial,” ranking third globally for innovation and first in Europe in a critical mass of frontier-tech companies. We possess at least 800 venture-backed high-tech scale-ups with turnover in excess of $25m. These firms represent the seeds of a future economy, even if Britain has so far failed to convert this entrepreneurial energy into durable national prosperity. The UK should be “five, six, seven times more ambitious” if it is serious about building the tech economy. Will quoted the economist Philippe Aghion: “capitalism is a spirited horse; it takes off readily, escaping control, but if we hold its reins firmly, it goes where we wish.”

That these businesses need government ambition to match their potential was a point reinforced at the event by Ravi Gurumurthy, CEO of Nesta, who offered several powerful examples of how the state can play an active role in shaping the rails on which capitalism runs in order to meet the “need to push forward the frontier of innovation with these 800 firms and do whatever it takes to unblock the barriers to growth”. Ravi pointed to the example of India’s digital ID programme, which now covers 1.4 billion people and underpins a payments system through which more transactions flow than the whole of the global Visa network. Ravi also encouraged more confidence about Britain’s own achievements, pointing to the energy transition as an example. He noted that in 2010, only 20% of the electricity system was decarbonised; today the figure is around 65%, a product of strategic policy, public investment and clear direction. His conclusion was clear: “The state can set a direction… it can solve these coordination problems, but it has to be quite active in driving competition as well.”

Similarly, Michelle Ostermann, Chair of the International Centre for Pension Management, encouraged the UK to look at international best practice when thinking about how to use the lever of pension reform to boost growth - a topic explored at length in Will’s report. Britain’s pension ecosystem, she argued, is not yet designed to generate the “patient,” capable capital needed to support productive investment at scale, but other countries, such as Canada, Australia and the Netherlands, show what is possible. Michelle cited OECD evidence that the difference between successful and failing pension systems is design, that “it’s not just about piling in more money; we need institutions properly equipped to create wealth at scale.”

Julian Richer, founder of Richer Sounds and of the Fairness Foundation, echoed Will’s central argument that if the reins of capitalism are gripped tightly, it can deliver growth that can benefit society as well as the economy. Julian encouraged a greater understanding of “double-edged capitalism” and of the distinction between ‘good’ and ‘bad’ business, and made the case for government action to distinguish between them. He framed this as both a moral and an economic issue: capitalism requires standards. Businesses should be accepted and respected only if they behave responsibly, paying taxes, paying fair wages, avoiding exploitative contracts — and bad businesses should be vilified.

Bobby Duffy, Director of the Policy Institute at King’s College London, framed these contributions within the narrative frame of fairness, highlighting the “sense of unfairness across generations” and the “loss of sense of a possible brighter future” as central to Britain’s political malaise. Bobby argued that what is often described as a “young people’s issue” is a whole‑of-society issue, because most people live in webs of intergenerational connection. When progress stalls, the social fabric frays, and “populist and authoritarian appeals and cultural division thrive.” He argued for fairness not as an add-on to an economic strategy, but as the precondition for its success.

Thursday’s event made clear that a stronger economy and a healthier society is within reach, if the UK is willing to be more strategic and more confident about shaping the economy rather than merely observing it. The prize is a fairer and richer country, more at ease with itself and proud of its place in the world. Closing his contribution, Will Hutton ended the evening with a call to agency and ambition. “It’s in our hands,” he said, “to build a 21st‑century economy… to build a much more solidaristic society… to reinvent our public realm. It’s achievable. It’s feasible. Let’s do it.”

In the months ahead, we at the Fairness Foundation will be continuing to make the case for action to build a fairer economy that works for every community. If you’d like to be involved in that work, please don’t hesitate to get in touch.

You can read the report online or as a PDF. It was also previewed in an Observer article on Sunday 15 March. Please help us by sharing the report on Substack, LinkedIn, Bluesky, Twitter/X or Instagram. Thank you!

OTHER SUPPORTIVE QUOTES

Rain Newton-Smith, Chief Executive of the CBI:

“A relentless focus on investment and measures to promote competition will pay dividends for our growth, productivity and prosperity. Escaping the state we’re in will require bold ideas which nurture our world-leading universities and ignite the innovation which stems from them, from quantum start-ups to clean energy scale-ups. From tax simplification to innovation in public procurement, Will Hutton sets out ideas to challenge our thinking and unlock the business dynamism needed to deliver sustainable growth.”

Andy Haldane, President of the British Chambers of Commerce and former chief economist of the Bank of England:

“It is only by enhancing business dynamism, in particular among its flourishing scale-up companies, that the UK can break free of its growth malaise. This compelling report provides some practical steps for doing so”

Lord Neil Kinnock, former leader of the Labour party:

“Yet again, Will Hutton offers urgent, practical ways to connect Britain’s financial capabilities and fresh productive potential to advance economic strength and social resilience”.

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Across think tanks, policy circles and much of the economics profession, there is a settled view that Britain’s current property tax system is a mess. It is widely seen as unfair, outdated and distortionary. And yet despite the obvious case for change, reform has proven remarkably difficult. For the most part, this isn’t because we don’t know what we’d replace it with. That’s to say, it’s not a technocratic problem. Like so much else at the moment, it is a political problem, downstream from housing and home ownership’s powerful place in the British social imaginary.

Any proposed tax reform, but especially property tax reform, is not therefore received as a neutral attempt to fix a broken system. For the public, it is a threat to something that they have spent decades working towards, the result of thrift and effort. Whereas reformers see abstract capital, voters (at least the ones lucky enough to own property) see security and independence.

In terms of polling, there is broad recognition that the current system is unfair. People know that it is wrong that modest homes in one part of the country are taxed disproportionately more than vastly more expensive properties elsewhere. They can see that stamp duty makes moving harder and that property prices need reevaluating. But recognising unfairness in principle is not the same as backing reform in practice. The moment that any proposal becomes concrete, people want to know what it means for them, not for the system.

Naturally, history matters too. Since the poll tax catastrophe, governments have repeatedly avoided big changes to local taxation. But the situation has got much worse since then. The deeper problem now is that Britain’s economic model has become more structurally dependent on property. As Lisa Adkins (with Melinda Cooper and Martijn Konings) argues in The Asset Economy, housing is no longer just one tenure among others or simply a site of consumption. It has become one of the main mechanisms through which class position and life chances are organised. In an asset economy, inequality is shaped less by income alone than by access to appreciating assets, above all housing. Any reform that would increase taxes on this scarce asset class therefore risks unsettling one of the central ways in which households have come to understand success in a low-growth economy.

This helps to explain why the difficulty of property tax reform is less a failure of political communications and more a feature of the wider settlement, shaped by policy choices that have elevated housing as the central mechanism through which British society now allocates security and reward. For decades, governments have allowed property wealth to substitute for decent public services, stronger wage growth and a more dynamic and innovative economy. Unless and until that changes, any serious attempt to tax property more rationally is therefore likely to meet stiff resistance.

None of this is to suggest that more modest reforms, such as revaluing property or adding new council tax bands, depend on a wholesale transformation of Britain’s economic model. But for those who want something more substantial, the central question may be less how to win the case for reform on its own terms than how to situate it within a broader shift in our political economy, one that gives people more durable sources of security.

This short note is written by our senior researcher, Jack Jeffrey. Jack is planning to do some work on the politics of property taxation over the next few months, and is interested on hearing from readers by email with views on the topic or interest in collaboration.

REPORT PREVIEW: ESCAPING THE STATE WE’RE IN

On a related topic, this Thursday (19 March) we’re publishing an essay by Will Hutton, chair of our advisory board, about how to fix Britain’s political economy. We’ll provide a fuller write-up in next Monday’s Fair Comment, but if you can’t wait until then you can read a preview that was published in yesterday’s Observer (snippets below), or check the Fairness Foundation website from Thursday onwards for the full report.

Thirty years ago, The State We’re In was published… I argued that [Thatcher] had bequeathed a divided and weakened society that actually undermined the economy, and that the better route was a stakeholder, high-investment capitalism that put fairness at its heart… Yet in 2026 we are where I feared in 1996 that we would be. Continued inattention to fixing the financial architecture in which our companies can grow and flourish has meant that many of our great businesses have been dismembered while others decay and stagnate. Too many young companies that might replace them are acquired or sold abroad. Societally, living standards are barely increasing while a century of improving public health and lengthened life expectancy is being reversed, especially in our former industrial heartlands. A great economy cannot be built upon a weak society… So colleagues at the Fairness Foundation and elsewhere, dismayed at the plummeting standing of what on current trends could be Britain’s last Labour government, urged me to remake the arguments today.

Will Hutton, The Observer, 15 March 2026

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On Thursday, the Fairness Foundation and the Black Equity Organisation launched our new joint report in Parliament, revealing the reality of racial wealth inequalities in the UK today.

The event, sponsored by Adam Jogee MP, featured contributions from cross-party parliamentarians and a wide range of stakeholders, including experts from civil society and representatives from the business world. The discussion focused on the central finding of the report: that opportunities to build and hold wealth in the UK remain fundamentally shaped by race and class. The report also sets out a series of recommendations for policymakers on how this gap can be addressed.

The scale of the racial wealth gap has been well-documented. Research from the Runnymede Trust has found that for every £1 owned by White British households, Black African and Bangladeshi households hold only 10p. Median total household wealth (including financial and pension wealth), stands at £321,000 for White British households, compared with under £40,000 for Black African households, and £65,000 for Black Caribbean households.

Our new report brings these figures to life through two illustrative case studies: men of the same age in London, one White British, with access to family wealth, and one Black Caribbean, without. Following their lives across education, work and housing, the research shows how equal salaries do not translate into equal opportunities when access to wealth differs. While the White participant is able to purchase a home and plan for the future, buoyed by parental support and an anticipated inheritance, the Black participant, despite steady employment, remains unable to buy a home because he has no access to intergenerational wealth.

Read the report

Stories like these are likely to become increasingly common in an economy where inherited wealth is playing a growing role in shaping life chances. Over the coming decades, an estimated £7 trillion will be transferred across generations, and it will be distributed very unevenly. Wealth inequality is therefore not only a question of class, but is deeply intertwined with historical and contemporary patterns of racial injustice.

The disparity between ethnic minorities and their white peers today reflects both historical discrimination in housing and employment and more recent failures to address present-day systemic inequalities. These disadvantages have compounded over generations, restricting the opportunities to build wealth. As a result, home ownership, one of the main routes to asset accumulation and intergenerational transfer, remains significantly less common among Black African and Black Caribbean families than among White British households.

Wealth both amplifies advantages and cushions risks. It enables people to accumulate assets, absorb financial shocks and take personal or professional risks. Access to family wealth provides security and freedom, while its absence forces greater caution and self-reliance. The psychological dividend of financial security is unevenly distributed, and the absence of a safety net leaves millions unable to plan or invest in their futures.

The racial wealth gap is the product of cumulative disadvantage, embedded within both economic structures and public policy. Opportunities for home ownership and wealth building remain shaped by race, class and geography. These inequalities are not only unfair; they are economically inefficient and socially corrosive. When millions are locked out of opportunities to accumulate assets, the consequences for economic growth, social cohesion, and democratic trust are profound.

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Addressing wealth inequalities requires action across three areas of policy. First, wealth should be taxed more effectively, including through taxes on income from wealth and transfers of wealth, and the consideration of potentially new taxes on stocks of wealth. Second, wealth ownership must be broadened through policies such as universal basic capital, giving people a foundation for security and opportunity. Third, the outsized role of wealth in shaping life chances should be reduced by strengthening public services, reinforcing the welfare state, and limiting the influence of the wealthy on politics.

Targeted action is also needed to tackle racial wealth gaps specifically. This could include race-equity audits of housing programmes to ensure fair access and monitor outcomes by ethnicity; wealth-tested deposit-match schemes supporting first-time buyers without family assets; stronger enforcement of anti-discrimination rules in the private rented sector; mandatory ethnicity pay-gap reporting with action plans and procurement incentives; and improved pension access through lowering the auto-enrolment earnings threshold.

Our joint report with the Black Equity Organisation adds to the growing body of evidence that the Government has both a moral and economic imperative to close the racial wealth gap - a step that is essential to building a fairer, more resilient and more prosperous society.

“A powerful analysis of the entrenched and widening wealth gap, and its intersection with racial inequality.” Muna Yassin, Chief Executive, Rooted Finance

“Some meetings shift your perspective. This was one of them.” Bola Ogun, Global Head of Reward & Executive Compensation, London Stock Exchange Group

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In this interview, our Advocacy Manager Jason Bunting sat down with the Mayor of Greater Manchester, Andy Burnham, to talk about the devolution journey so far, and the reforms that are needed to build a fairer economy across the country. They spoke about the progress made on fiscal devolution in this Parliament, what good growth really means in practice in Greater Manchester, and the political and economic changes required to build on progress to date. The interview links to Jason’s report last December, A Fair Share, which outlined the need for a long-term vision on fiscal powers to local places.

Jason:

In Head North, you describe the tourism levy as the first step on the journey of fiscal devolution. Since its publication, more progress has obviously been made, but it seemed that even the tourism levy was hard won, although it was a reasonably moderate step. Where do you think we are in the fiscal devolution journey, and what do you think it says that even incremental change needs to be fought for?

Mayor Burnham:

It was hard won, but it was won - and it was won when we played back to the government the growth arguments in favour of it. That’s where we started to make a breakthrough. Bear in mind, these are new arguments for the Treasury. They’ve never had a concerted pitch before from people in elected office who’ve got the real ability to implement what we’ve been calling for.

It was when I said to the Chief Secretary of the Treasury that growth has consequences - that if you have a large number of visitors coming in, as we do now, you need later running public transport, you need extra policing, you need street cleaning services, etc. I think they’d not really thought that through - that you need something like this to manage the consequences of growth. If you only try to deal with that through council tax, that’s inherently unfair on the residents - it’s really important to share the cost between visitors and residents.

The growth of cities outside of London confronts the Treasury with new questions, and this was definitely the first big one. Unsurprisingly, they didn’t give in straight away, but to be fair, they did hear the argument and they conceded it.

Jason:

At a recent event, you talked about extractive growth vs good growth, a distinction we talk about a lot at the Fairness Foundation. You said that Manchester has seen too much extractive growth. Can you expand a little bit on what you meant by that, and whether you see more fiscal powers as an antidote to that extraction, or at least as a tool to combat it?

Mayor Burnham:

When I was an MP in the 1990s and 2000s (in pretty much the pre-devolution days), I remember there being a sense that you just have to grab whatever growth you can get. On warehousing and distribution, with the M60 going around the city and then the M6, there’s no shortage of jobs that you can try and bring into those sectors. But those jobs are not long-term, they’re not going to create lots of high-quality training opportunities for young people, and the nature of the employment is often transient. For instance, they wouldn’t be signatories to our good employment charter in Greater Manchester.

So it’s about recognising and being more direct about good growth going forward. It means that organisations which come here do well, hopefully, but then are prepared to recycle some of that upside into our people and our places. I’m being really clear with people that this is what we expect. When I first put forward the idea of the Greater Manchester good employment charter, this was an era when some people were saying, “well, that might deter people from investing here”. It was the sense that you had almost zero power and that in order to get people to come and invest, you had to roll over and just say, “do whatever you like”.

Now, I think it reflects a confidence that we’ve got that says, no, we’re not just saying “anyone is coming in”. We have standards and we’re prepared to stick to our guns about standards. And actually, for people coming to invest in Greater Manchester, we can do more for their brand than they can do for ours. It’s about recognising that the city and region stands for certain things that businesses are often looking for an association with.

In terms of what that might mean from a fiscal point of view, let’s take an example: it used to be called the Apprenticeship Levy and it’s now called the Growth and Skills Levy. One thing we want is the ability to keep all of the levy which is raised in Greater Manchester. At the moment, it goes back to the Treasury if it’s unspent, and there are quite restrictive rules about what it can be spent on. We want a different approach that would allow us to pay for post-16 work experience placements using the levy, or to use it in a highly flexible way to support any work-related activity for young people or for people out of work.

Jason:

I imagine that could be one of the next staging posts on the devolution journey. But do you have any concerns that progress on all of those levers is often incrementally won, through wresting control from Whitehall? We don’t seem to have a long-term vision for it, led centrally. One of the things that we’ve asked is whether we need a commission to look at the tax code and at specific taxes that could be devolved. Do you think that could be an option for a longer-term vision of fiscal devolution?

Mayor Burnham:

I think so, but I wouldn’t start so much with income tax or national insurance. I think the place to start is with quite a significant review of land, property and business taxation, because those are taxes that really land in our world, the ones that we have a close connection with. And one thing that has been a feature of the Greater Manchester Devolution deal is business rates retention. Where we brought in new industry, we’ve been able to keep the upside of that from a business rates point of view, so we have an incentive to keep working to bring in new business and new investment. With some of the first moves on council tax to put in those new bands, I think there is real scope for a more imaginative review of land, business and property taxation linked to local government finance.

I think the risk of devolution actually is the parlous condition of local government, and we need to be really serious about how to repair the foundations. The Greater Manchester Combined Authority is based on 10 councils and if they’re in trouble, then to some extent we’re built on sand, and we have to be careful about that.

I think the time has come for the revaluation of council tax, considering a land value tax to prevent land banking by big entities, and looking at a different form of business taxation that doesn’t overly punish high street physical businesses while under-taxing online operators. That’s where I would look first, because it’s so linked to devolution: land, business and property taxation.

Jason:

Yes, that’s one of the clearest examples of extraction really. Linked to your comments about extractive growth is the question of how to make sure that more sustainable growth reaches all parts of a region. You’ve talked about the Local Industrial Strategy and making sure that the geographic benefits that are accumulated through the proceeds of the industrial strategy reach towns at the lowest possible level. Is that something to which you’ve taken a deliberate approach while you’ve been Mayor?

Mayor Burnham:

Yes, definitely. There are those who make the argument that it’s “towns versus cities”, that you can invest in one or the other and towns are often neglected. We don’t see it that way. We think the fortunes of both are intertwined.

It’s inevitable really that the city has to come first: the city has to be thriving before the towns that are in its orbit can then thrive, and so if you look at Greater Manchester’s development in the last couple of decades, it has been very city centre oriented - although we’ve begun to see Media City as a place of considerable investment, everything around the airport, spreading out down the Oxford Road corridor etc. So it’s begun to spread a bit, but it is still very oriented around the city.

We’ve been quite clear that in the next decade, we have to use the strength of the city to unlock investments in the towns, and the example we often point to is Stockport. Stockport became attractive 7-8 years ago, when it marketed itself as city-centre living at half the cost. It started to use the fact that it’s 10 minutes away from the city centre on the West Coast Mainline, but then said that we can put a modern living experience in, with a high street and night-time economy offer that people in their twenties and thirties want to use. So Stockport was to some degree the forerunner of what we now want to see replicated much more broadly.

We now have a number of mayoral development corporations being brought forward for Stalybridge, Ashton, Middleton and Bolton. Because what we’re trying to say is that the city is strong, with loads of really good jobs there. Now, we can start to lift struggling places, by virtue of their proximity to this vibrant city, and particularly if you then reimagine those places with new living accommodation.

And I do understand the narrative that says, well, the towns always have to wait. But unless your city’s powering ahead, how can the towns power ahead?

One last point is that the vision for the towns has to be linked to an industrial vision. So, one argument to help the towns is by having a city where we say to young people that you can live 15-20 minutes away on public transport with modern city centre style living. But increasingly now, we’ll be building out our vision for industrial clusters linked to our priority sectors. That starts to take higher-end jobs back into the boroughs of the city region. It’s the combination of the two things that is how you lift the towns: better jobs in those areas, combined with proximity to a vibrant city.

It’s a challenging thing to do, but actually, we’re pretty confident that we’ve already got an example in Stockport of having done it.

Jason:

The point that you made about capacity and the strength of the city are obviously interlinked. Do you see a role for central government in relation to the decentralisation of the civil service? Do you think that decentralisation of staff and capacity is something that Whitehall could be more ambitious about?

Mayor Burnham:

I think it could be more ambitious about it. To some degree we’re living in two worlds right now. We’ve got strong, capable, combined authorities across England. And if you look in Northern Ireland, Wales, Scotland, you’ve got devolved authorities there that have strength and capability as well.

And yet we still have a Whitehall system that doesn’t want to let go fully, when I think they should. There should be quite a significant transfer of human resource to the places that are in the business of getting the growth going. I think it’s still the case that the silos of policy come before the places, and it shouldn’t be that way around, but it is, for long-standing cultural and historical reasons.

Growth in a place is one thing - and hopefully it’s good growth - but then you’ve got to match the people to that growth. So that’s the public service reform side of things. Changing the way education, skills, jobs and pensions work, and changing the way the health service intervenes to support people to stay in work - that’s where the agenda should move to.

Whitehall needs to become less controlling of everything and more enabling for that type of change. To me, that points to significant secondment and transfer of staff. Working in a much more place-based team will change people’s policy perspectives. We shouldn’t stay in this two-worlds position much longer. We need to move into a devolved world, and that does imply quite substantial reform of the civil service in Whitehall.

Jason:

That could also be one measure by which you could try and deal with this intractable Whitehall brain and the Treasury orthodoxy that we talk about. It runs so deep within the Whitehall system that you have to do something pretty profound and that means changing the structures and a different way of doing things.

Finally, we often hear about rewiring the state, and it’s been the desire on the part of governments across the last couple of decades to make the state more efficient and capable. Do you think that rewiring the state is actually possible without doing some of the things that you’ve talked about in terms of more ambitious fiscal devolution, and structural reform to Whitehall?

Mayor Burnham:

I’m glad you’ve asked that as the final question because I think there’s something more, a reform that’s more fundamental than anything else we’ve touched on yet, and that’s reform of Westminster. I think Westminster reform will make everything else we’ve talked about more logical. At the moment, we have a Westminster system that doesn’t, and can’t, see all places and people as equal. Half of it is unelected for a start, and it comes mainly from within the M25. Then if you look at the elected house, the whip system - in my experience of being in there - disempowers the elected state and empowers the unelected state. It empowers the Whitehall silos, because they get their way by mandating MPs to rubber stamp what they want.

So, I think you do have to look at Westminster reform as well. I would go for a proportional system and I’d go for an elected second chamber as a Senate of the Nations and Regions. Then you’d have the regional and national agenda set out very clearly, and the heart of the system would be sending a message about the pre-eminence of the nations and regions. It would also put an emphasis on more collaborative working, long-term thinking, and starting to disempower those silos and hold them more to account. I very much believe that these are the enabling reforms that would allow for more civil service reform, fiscal devolution and so on.

I remember my time in Parliament - people work along party lines. If you think of the English regions, if MPs had worked outside the confines of the whip and were able to prioritise their region and fight for it, that would be a different dynamic. As it is, the regions were disempowered by the London-centric Whitehall system. And when you break along party lines, you end up unable to coalesce and convene across a region and unable to champion the region’s interests. So I think that electoral reform is absolutely critical in all of this.

This idea that the Treasury just does its own thing and has its own rules - I’m sorry, but that’s not on anymore. We need to all unite across the regions, nations and across different parties for Westminster reform - that’s my message.

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This month, we’ve published new polling, interviews and commentary, focused on the impact of wealth inequality on our economy and society. From our ‘Making or Taking?’ research to our call for donation caps in the Elections Bill and our work on student loans, the message is clear: if we want a stronger economy and a healthier democracy, we must privilege wealth creation over wealth extraction, and not allow extreme wealth to distort politics itself.

Last week, we released new nationally representative polling that explored public attitudes to wealth creation and extraction. Overall we found that:

• A clear majority (64%) of the British public support entrepreneurship and genuinely innovative companies

• Around 2/3 oppose business models based on natural monopolies or enabled by tax avoidance, with majority opposition across every voting bloc

• Only 10% of respondents consider business models based on exploiting scarcity (e.g. ticket touting) or tax loopholes to be acceptable

• When people are asked why they consider some business models negatively, by far the most popular reason is that “they are exploiting consumers, workers, or society more broadly”

We believe that the overall pattern suggests a clear mandate for policymakers to support genuine wealth creation, while cracking down on extractive and exploitative practices that undermine fairness and public trust.

The findings will contribute to our focus this year on wealth creation and extraction, and how both are linked to inequality. It’s a subject that is receiving a growing focus within Parliament, including from MPs such as Yuan Yang, who has suggested that there are too many companies in her constituency that make money from wealth extraction instead of innovation or producing valued services. A forthcoming report from the Labour Growth Group will argue that Britain has become an “extraction economy”.

The issue has been the subject of a range of previous reports, including from the New Economics Foundation in its report ‘Ending Extraction in the UK Care System’ and from Common Wealth in its excellent interactive report ‘Who Owns Britain?’. It’s an issue that is at the heart of a fairer economy, and one which we intend to explore at length in the months ahead.

In our recent contribution to Bearly Politics, we argue that the Mandelson–Epstein affair should not be understood simply as an individual scandal, but as a warning sign of a deeper structural problem in British democracy: the growing ability of extreme wealth to shape political decision-making.

Read the full article here:

Bearly Politics

Is the Mandelson-Epstein Affair a Symptom of Plutocracy?

Editor’s Note: Today’s contribution to Bearly Politics comes from Will Snell, CEO of the Fairness Foundation - a UK based think tank that’s focused on the structural consequences of socio-economic inequality. The Foundation’s work, including its Wealth Gap Risk Register and weekly…

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2 months ago · 87 likes · 28 comments · Will Snell

We explore how this dynamic undermines democratic trust and can become self-reinforcing over time, as rising wealth inequality translates into growing political inequality. We argue that practical reforms, including caps on political donations and stronger lobbying rules, are needed to reduce the spillover effects of economic inequality on political power and restore confidence that government acts in the public interest.

It’s a diagnosis shared with Tax Justice UK, who accurately describe the challenge when they say that the scandal “is not the personal failings of a few individuals, but the structural rot of a political system that no longer serves the public, but the private interests of a powerful and privileged few.”

In making those arguments, we drew on the research of transparency and corruption campaigners who have been sounding the alarm on this issue. For example, Spotlight on Corruption have found that businesses are 23 times more likely than civil society groups to get meetings with Treasury officials. That study is backed by US research which shows that if the wealthy support a policy, it has a 45% chance of becoming law, but if they oppose a policy, the likelihood of it making it onto the statute book is just 18%.

The public have a keen sense of some of these challenges. According to the ONS, 69% of people say they have no say in what the government does, while our own polling shows that 75% of people are concerned that people with net wealth of £10m or more have too much influence on the political sway.

After the events of the last week, it seems unlikely that the scandal provoked by the Epstein files will fade any time soon.

In our response to the Government’s Representation of the People Bill, we welcomed the opportunity to make the UK’s democratic system fairer, but helped to sound the alarm about the absence of a cap on political donations. In refusing to include this widely supported measure, the Government has missed a key opportunity to rebalance our political system by reducing the disproportionate influence of extreme wealth on decision-making.

The reality is that without a cap, wealth will continue to buy disproportionate influence in politics. While the Bill strengthens checks on donations and ensures that donors are genuinely connected to the UK, these measures fall short of securing an equal voice for all.

Together with Transparency International UK, we’ve previously written about how fair politics needs fair limits, including through an annual cap of £50,000. The call reflects the findings of the the independent Hayden Phillips Review and the Committee on Standards in Public Life, and is supported by 67% of the public.

Radix Big Tent provided a full rundown of the reactions to the Bill from pro-democracy and anti-corruption campaigners as they emerged, and the consensus is clear: the Bill falls short in protecting our democracy. Over the coming months, we’ll be working with campaigners of all stripes to make the case that caps on political donations are essentially to safeguarding public faith in our democracy.

In Getting Down to Brass Tax, our Chief Executive Will Snell sat down with Director of the Institute for Fiscal Studies Helen Miller to explore how the UK’s tax system can be reformed to support long-term investment and wealth creation while maintaining fairness and public trust.

Will and Helen discussed where the tax system currently falls short, as well as some of the reasons why more ambitious reforms don’t make more progress in our current system - including in the recent Budget. They also discussed the distinction between wealth creation and wealth extraction, and how to encourage innovation while addressing economic rents. AI and automation also featured in the conversation, as did a consideration of the remaining evidence gaps on inequality and whether economics has focused too much on efficiency.

A reminder that Will’s interview with Helen is part of our monthly series with interviewees working across issues related to a fair economy.

Last month, the Chancellor provoked consternation and anger among graduates when she described the student loan system as “fair and reasonable”. It’s a view that doesn’t appear to be widely shared. In fact, it was loudly repudiated, not least by the millions of graduates - particularly those on Plan 2 loans in England and Wales - who were aghast at the idea that such a system could be considered fair.

Given the unfair impacts of the changes made in the Budget for graduates, we spoke out in The Observer, calling for the Chancellor to reverse the freezes to repayment thresholds which will hit lower earners hardest. The Intergenerational Foundation has found that lower-earning graduates will repay 68% more across their lifetimes as a result of those changes.

In contrast to the Chancellor’s comments, it appears totally unreasonable to many people that a graduate is expected to earn £66,000 just to start paying down the capital of their loan.

The Government maintains that since graduates can expect to earn over £100,000 more over their lifetime than non-graduates, they should be expected to make a contribution to the cost of their studies. Yet many graduates would argue they will do so anyway as higher earners through progressive taxation.

They also point to the use of RPI to calculate interest on student loans as particularly unfair, given that it is generally discouraged by the ONS. Equally, many students feel they were duped and mis-sold student loans at a young age, when they lacked the financial capability to make such a significant decision. It’s a cause that has been backed by consumer expert Martin Lewis.

Campaigners like Rethink Repayment are rightly shining a light on this issue, and campaigning for a better deal for graduates and students. We think the Government should listen to their demands and commit to meaningful reform before an entire generation loses faith in the system altogether.

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What does the public think about the distinction between wealth creation and wealth extraction? Do they view certain business models as inherently ‘creative’ or ‘extractive’? We carried out nationally representative polling with Opinium in January 2026 to find out, asking people for their views about eight fictional businesses.

Read the report

The results show that, while there are a mixture of predictable and more surprising variations in attitudes along political and demographic lines, overall there is a clear sense that the British public are strongly opposed to business models that are seen as extractive. Particular anger is reserved for business models that are understood to exploit consumers, workers or society more broadly, including those that avoid tax or rip off consumers. There are more mixed views about businesses that cut costs by squeezing staff or suppliers. However, there is strong support for businesses that do well by creating wealth through innovation and investment in R&D.

To ensure that the polling questions were accessible and interpretable, we opted to use simplified examples of ‘creative’ and ‘extractive’ business models and practices, and we recognise that real life is more nuanced and complicated than those examples might suggest. This piece of attitudinal research is an exercise in exploring where the instincts of the public lie; more detailed policy work is needed to enable the development of a clear conceptual distinction between wealth creation and wealth extraction.

However, we believe that these findings provide policymakers with a clear mandate to take action to support genuine wealth creation at the same time as cracking down on examples of wealth extraction and exploitative business models. Further research is needed to gauge levels of support for specific policy options. We will be doing much more work on wealth creation and extraction over the coming months, looking in detail at particular aspects of the issue and at a range of potential policy responses.

You can read the report online or as a PDF. It was also covered in LabourList this morning. Please help us by sharing the report here on Substack, or on LinkedIn, Bluesky, Twitter/X, Facebook or Instagram. Thank you!

Read the report

THE EIGHT FICTIONAL BUSINESSES

• Tocrad has developed a new type of hairdryer that is quieter, cheaper and more efficient than its rivals and has gone on to sell millions of them

• Hydrome has the regional monopoly to provide water to people living in the East of England, and has been able to use its position to increase customer bills and borrow large amounts of money

• Corazam has become the biggest online retailer for electronic goods and is able to use its dominant position in the market to drive down the prices it pays to its suppliers

• Artizem has spent millions developing a new drug to treat Alzheimer’s and has negotiated a contract to sell it to the NHS

• Cronosphere has bought up 50 struggling accountancy businesses and has reduced their costs through a major round of redundancies

• Tixboss has developed an AI tool that allows it to buy up concert tickets in bulk as soon as they are released and sell them onto fans at a big markup

• Credum has identified a loophole that allows football clubs to reduce their tax bills by claiming for tax credits intended for research, and is selling advice on how to exploit it to those clubs

• Finawhizz has reduced its costs by restructuring its operations so that some of its employees are reclassified as self-employed workers and are not liable for employers’ national insurance

Read the report

UPCOMING BOOK ALERT

I’ve written a book about fairness - what it means, why we need it, and how to get it - which will be coming out in September. It will be on sale for only £12.99, and Waterstones are running a 25% promotion this week, so grab a bargain now and pre-order a copy! Blurb below. The discount code is FEB26 - it expires this Friday at 23.59.

The Fair Necessities: Why We Need a Fairer Britain and How to Make It Happen

Britain is a grossly unfair country, disfigured by a broken social contract and unsustainable levels of inequality. This moral outrage presents a growing threat to our society, economy and democracy.

The Fair Necessities argues that unfair inequality undermines everything from faith in government to economic growth, yet a fairer country is within reach. Drawing on cutting-edge research and interviews with public figures, including including Vince Cable, Polly Toynbee and Liam Byrne, it sets out the moral, political and policy cases for tackling inequality and explains how to build a broad, cross-party consensus for a fairer society. Engaging, evidence-rich and ultimately hopeful, it offers the vision — and the practical roadmap — needed to rebuild Britain on fairer foundations.

"Deft, clever, terse and precisely targeted. Will Snell’s book takes us from cradle to grave, demonstrating how inequality can be a risk to our societies as deadly as any pandemic and that unfair societies produce very extreme dangerous politics.” Danny Dorling, University of Oxford

Pre-order a copy

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Commenting on the publication of the Representation of the People Bill, Will Snell, Chief Executive of the Fairness Foundation said:

“The Representation of the People Bill is a once-in-a-generation opportunity to make our democracy fairer and fit for the future.

Yet by refusing to include a cap on political donations, the Government has stopped short of the reforms needed to genuinely rebalance power in our politics.

It is right that the Bill strengthens checks on political donations, and ensures donors have a genuine connection to the UK. But stronger checks are not the same as a fair say.

Without limits on donations, wealth will still continue to buy disproportionate influence.

Our polling shows that 75% of the public believe the very wealthy already have too much sway over politics.

Yet our political system remains dependent on a tiny number of affluent donors.

A cap on donations has been recommended by the Committee on Standards in Public Life, endorsed by the Hayden Phillips Review and backed by a clear majority of the public.

Ignoring it is a missed opportunity to restore trust, strengthen democracy and ensure equality of voice in our politics.”

In this in-depth interview, I speak to the new Director of the Institute for Fiscal Studies, Helen Miller, about where the tax system is doing well – including on raising revenues – and where it needs to do better. Top of the wish list is a simpler tax regime that creates fewer economic distortions and treats people more consistently. The challenge is to find a way to design, implement and sell policy reforms that go deeper than the usual tinkering with tax rates to change the tax base (who and what is taxed). Done well, this can increase incentives for investment and wealth creation while taxing economic ‘rents’ and externalities more effectively. Redesign of the tax system needs to be anchored around a small number of key priorities that will enable officials and ministers alike to focus on building the foundations for effective long-term reform.

This is a long post, so if you prefer you can jump straight to a specific section:

Where is the tax system failing?
Balancing fairness in the tax system with other goals
The Budget and taxing wealth
Wealth creation versus wealth extraction
Automation and AI
Evidence gaps after the Deaton Review
Has economics focused too much on efficiency?

Where is the tax system failing?

Will:

If the main functions of taxation are to raise revenue, to redistribute income and wealth, and to correct market failures, on which of these is our current tax system most obviously failing?

Helen:

While I am going to go on to say lots of things about the tax system having problems and needing to be better, it’s important to remember we’re not looking at a car crash. The tax system raises a lot of revenue. It’s due to bring in well over a trillion pounds - close to 40 per cent of GDP. There are lots of countries in the world that would love to have the tax system we’ve got, because it brings in so much money at a relatively low administrative cost.

It also does do a lot of redistribution. Two things are worth pointing out. One is that it really is the tax and benefits system combined – as you should expect. We don’t think the tax system should be doing all of it. Second, there’s no single right answer for how much redistribution you want; people simply differ in their preferences, so some will always think there is too much and others too little.

Our tax system also does an increasing amount of trying to sort out market failures. Pollution and carbon emissions are the classic textbook case where you would want a tax: there is an externality, so you put a price on it and then let the market work. In practice, we are a long way from the textbook solution. Effective tax rates on carbon vary hugely between households and businesses and across different uses, and taxes and regulation interact in ways that government does not seem to have fully under control. There is a lot of scope for improvement here.

The big problem is not that the system completely fails on any of its core functions, but that it does more economic damage than it needs to while trying to achieve its goals. Once you accept that you want to raise revenue and redistribute, you inevitably create some distortions, particularly to work incentives, and that gives you the classic equity–efficiency trade‑off. The question is how to design the system so that, for any given amount of revenue and redistribution, you minimise the costs in terms of discouraged work, saving and investment. On that issue, the UK could do much better.

Balancing fairness in the tax system with other goals

Will:

Do you think fairness within the tax system – treating similar people similarly – is a more important goal than thinking about the impacts of the tax system on growth and on vertical inequalities in society? Or is that a false distinction?

Helen:

No, I don’t think it’s more important, and I do think it’s a bit of a false distinction. Raising revenue and redistributing are the key main reasons you have a tax system – if you didn’t want to do those, you wouldn’t have one. In that sense, they are the fundamental goals.

But you can have horizontal equity and achieve your other outcomes. It’s not either/or. Often, horizontal equity is actually good for the other things. A concrete example: take people within the top 1 per cent. They are taxed very, very differently. I think that’s problematic from a fairness point of view – if you and I are both millionaires, and one of us faces a much higher tax rate than the other, that’s just unfair.

It is also problematic because if I can switch into a lower‑tax form of income, it undermines the state’s ability to raise revenue and to achieve vertical redistribution. I think of horizontal equity as: once you’ve decided how much money you want to raise and how much you want to redistribute, you want to do it in a way that is horizontally equitable – both for fairness reasons and because that supports your other goals.

Will:

And there’s also the point that these things can be mutually supportive – for example, increasing taxpayer confidence in the system and therefore its revenue‑raising potential, which a lack of horizontal equity can undermine.

Helen:

Absolutely. Why is raising tax difficult? Often because people don’t want to pay it. Why are there thousands of studies on the design of taxes? Because when you tax people, they change their behaviour. That is at the heart of it.

Whenever you take two similar people and treat them differently, that opens up lots of opportunities for people to change their behaviour. That is where you get problems. Sometimes there may be a good reason you can’t treat similar people the same, but usually that’s not what’s going on - it’s just poor tax design.

I find it very hard to think of a case where horizontal inequity helps you raise more revenue or achieve vertical redistribution. I can think of tons of examples where it hurts. As a rule of thumb, whenever you see horizontal inequities, you’re seeing a problem in the tax system that needs to be got rid of.

The Budget and taxing wealth

Will:

November’s Budget arguably represented a missed opportunity to address the undertaxation of wealth relative to work. What should the Chancellor be thinking about doing next to tackle this problem? And how can we persuade or incentivise our politicians to grip these big long-term issues in the face of a range of political and systemic incentives to do precisely the opposite? Is institutional reform part of the answer?

Helen:

A great question. First, it’s worth pointing out that the Chancellor did do some things in the Budget to tax wealth. She increased taxes on interest, dividends and property income, and there was a previous capital gains tax rise.

From my point of view – and I’ve been working on this for most of my career, so I feel strongly about it – step one is to make sure everyone understands the problem. For me there are two parts.

Everyone can see the rate differentials – it’s obvious that some things are taxed higher or lower than others. But coming back to horizontal equity, I think what’s missed is this: imagine I’m an employee and you’re a business owner, and we both make £50,000. We might look similar, and it’s tempting to say we should be taxed the same. But if you’ve put lots of your own money into your business, taken lots of risks, invested in capital, then part of your return is a return to capital, not labour. Horizontal equity doesn’t mean just treating us the same. It means treating the labour income the same, but treating the capital income differently. I think there is a lack of understanding about that.

People often think what makes workers and entrepreneurs different is that entrepreneurs need lower tax rates to boost their labour supply. I don’t buy that. What makes them different is capital – their own money at risk. If you just raise the rates, you get a trade‑off. On the one hand, you fix horizontal equity on labour incomes. On the other, you discourage saving and investment. You can choose that trade‑off: accept less saving and investment and less growth in exchange for more horizontally equal treatment of labour. But you don’t have to. You can fix the tax base and sort of have your cake and eat it.

In my mind, what I’d say to the Chancellor is: you have to go for that two‑part solution. First, fix the base so you’re not discouraging saving and investment; second, align the rates on what’s left. I think that is just better – you can have horizontal equity on labour income without reducing saving incentives.

Even politically it is more stable. At the moment, you get some people arguing for higher rates, rates go up, and then later another government comes along saying they’re bad for investment incentives and cuts them again. Up, down, up, down. If you had a system where changing rates didn’t affect investment incentives so much, you could leave them alone more.

So the first step is understanding. And that relates to your second question about incentives. If a Chancellor just “whacks up” tax rates, then groups like the CBI will understandably object, and they’ll often be right to say you’ve damaged investment incentives. You can imagine a system where you fix the base and the investment‑incentive issues first, and then raise rates. They still won’t love it, but they’d probably be much less upset.

All the time we pretend there isn’t a trade‑off and act as if you can just change the rates, we’re in an unstable position. But this is hard politically, because tax rates are salient and easy to understand, whereas the tax base is much more complex. Part of the challenge is finding ways to make the base issue more salient.

Will:

So you’re arguing for improving the quality of the debate, rather than deep structural changes to, say, short‑term political incentives, Treasury reform and so on?

Helen:

Those bigger reforms would be great too. I regularly complain about short‑termism in politics. But it’s worth remembering that sometimes politicians do take long‑term decisions. Rachel Reeves has put forward planning reforms whose benefits will mostly be outside the immediate political window. Jeremy Hunt did full expensing for investment; the biggest effects won’t be immediate. So yes, more long‑termism would be good, but we shouldn’t say it never happens. I think first you have to win the argument: make politicians realise this is worth doing, and get a broader set of stakeholders to think it’s worth doing. Why did planning reform get through? Lots of people thought it was a good idea.

If there were an equivalent level of support for fixing the structure of the tax system – independently of people’s views about how much redistribution they want – that might make it easier to take a longer‑term punt on it. Of course, there are still issues about cost, timing of revenues, and things like how the OBR scores policies, which can create funny incentives. Reform is always easier when you’ve got revenue to give away.

I also think there is a specific political problem in the UK, which I suspect has got worse. We have a tendency to bolt something else on. We have a really, really complex tax system. Politicians are much more excited about saying “I’ve got something new” than “I’ve taken things away.”

I think the biggest problem the tax system has is trying to do too much. Every time I hear someone say, “We need a new incentive,” I think: no, first think about five incentives you can remove. We rarely appreciate how all these things layer together to create odd incentives.

There’s also something about the structure of the budget cycle. If you have lots of fiscal events, you’re standing up in Parliament wanting to announce something to lots of different groups, and that tends towards newness. That drives the proliferation of measures. If this Chancellor really sticks to one fiscal event per year, that might help a bit.

We need to get better at stopping disincentivising things – getting out of the way – rather than “incentivising” things. There are a few things government should positively incentivise through the tax system, but they are few and far between. Mostly, tax should be trying to get out of the way.

Will:

Do you have a view on why significant capital gains tax reform didn’t make it into the Budget?

Helen:

I don’t know the answer. I think there are a whole bunch of things going on. It is worth saying that this stuff is genuinely hard. I don’t mean technically hard in the sense that you couldn’t design something – I reckon I could write down what we should do, and I don’t think it would be that hard to administer. But the transition from here to there is genuinely hard.

Capital gains tax reform is particularly hard because it’s not an issue you can consult on in advance – people will change their behaviour. You can’t just say, “Here’s my five‑year plan.” And if you haven’t got your ducks in a row well before the Budget, it’s too late to work out all the mechanisms and staging of changes. Even something like introducing a new allowance to strip out inflation – we’ve written about this – raises questions. Do you apply it only to future gains? Some past gains? How do you phase it in? How do you deal with assets where you don’t have a base price?

None of that is impossible, but it does need detailed preparation. If you wait until the point where a Chancellor is suddenly interested in it, it’s too late for that fiscal event.

If I were the Chancellor, I’d focus on a handful of things – capital gains would be one – and say, “I want Treasury and HMRC to go away and work up properly how you would do this.” Then, by the time the Budget comes, you can look at it and say, “Yes, we’re going to do that.”

I think there’s also the “budget hamster wheel” problem. People in the Treasury and HMRC get through one Budget and then they’re into the next one or a Spending Review. There’s no time for reflection or planning. That means we have a bias towards things that are easy to change – like rates – compared with changing the base or indexing assets.

I also think we lack a clear vision. You need a guiding North Star – “This is where I want the tax system to get to.” The Chancellor can’t do the nitty‑gritty, she’s far too busy, but she has to set that clear direction so everyone is pushing towards it, and you can judge whether each step moves you closer. I have no sense that there is that clear guiding principle at the moment.

Wealth creation versus wealth extraction

Will:

Is the distinction between wealth creation and wealth extraction in our economy a useful one? If so, where would you draw the line between the two, and what role do you think the tax system has in disincentivising wealth extraction and incentivising wealth creation, as opposed to regulation, investment and other levers?

Helen:

I recognise what you mean by wealth creation and extraction – I intuitively get the difference – but I’m not entirely sure where the dividing line is.

Partly that’s because all wealth has to be created first. There is no extraction before there is creation. I started thinking that maybe it’s more useful to say there is wealth creation, and that can be of different types: productive innovation that creates something new for the world, or something more like digging oil out of the ground. Different types of creation, but in all cases wealth is created somehow.

Then, rather than “extraction”, I’m inclined to think about who is getting the proceeds of that wealth, and how that relates to the people who did the creating. Are they getting it? Is somebody else getting it? How fairly is it shared? Who is capturing it?

A lot of “extraction” ideas are basically about economic rents – people getting more in return than you needed to give them to get them to supply that input.

If you can tax those rents without changing behaviours, you can tax them at 100 per cent. The issues are: can you work out where they are, can you ring‑fence them, and are they mobile?

North Sea oil is the classic example. There are clearly rents. You can draw a circle around it and ring‑fence it. You can’t move it. When you can find those extractive industries, I think taxing them at high rates – with deductions for investment – is a really good thing.

The other issue is whether you can stop rents arising in the first place. That is hard, and that’s where tax is definitely not the only instrument. Competition policy, regulation and other levers are at least as important, if not more.

Some economists argue that higher personal taxes at the top can discourage rent‑seeking behaviour – the idea being that if you’re going to be taxed at a high rate, what’s the point of trying to seek rents in the first place? I see the theory, but we have to be very careful putting it into practice, because those high rates also discourage genuine innovation and activity.

My take is that you first want a government thinking really hard about why we have markets in which rents arise, and trying to stop them arising – recognising that “free markets” don’t exist. Governments are always shaping markets. Then, where rents still arise, you look for ways tax can capture them.

Innovation is where the rents story gets genuinely difficult. Take a company that does lots of investment over a long time, say on a medical innovation, makes losses for years, and then starts to make big profits in ways that looks like a rent, but it might just be that the return is concentrated in a particular period. If we taxed that at 100 per cent, we’d discourage innovation.

Patent policy is a good example: you want people to capture enough of the return to make the risky investment worthwhile, but at some point they are just getting rents, and you want to stop it. We need constantly to evaluate those policies. With superstar firms like Google, it’s been good in some sense that they could capture returns and we all benefited, but it’s also gone too far in some ways, with too many rents.

When it comes to the role of the tax system, the simple solution is to tax marginal returns at labour income rates. For rents you might want to tax them higher, but at least you won’t be undertaxing them if you tax them like labour. Look for ways to extract rents directly where you can, but otherwise tax everything like labour income, because that’s always a safe option. Often you can’t distinguish them, especially because things that look like rents can be returns to investment, like with patents. Maybe in future we’ll do better, but at the moment I just can’t see how we can be more precise than that.

Automation and AI

Will:

How should we be thinking about rewiring the tax system to prepare for the possibility of large-scale job losses due to automation and AI, and is it time to think about some form of a universal basic income (UBI)?

Helen:

There is a lot we don’t know about AI. It might be our generation’s big challenge, which means we have to constantly watch how it is changing things, and constantly ask what’s new. We won’t know all at once what needs to happen – we need to keep monitoring.

But there are things we can already do. We can start taxing rents where we can identify them. We can tax returns to capital properly, so we don’t distort choices over capital inputs, and so that if we do need to redistribute more from capital owners in future, at least we are taxing their incomes properly now. We can tackle some of the existing inequalities – including from undertaxed land values.

We should stop incentivising self‑employment, which is a more precarious form of work. I’m not against self‑employment, but you shouldn’t push people towards it. Employment relationships are valuable to people; we shouldn’t be making them relatively less attractive at a time when they may already be under pressure.

We shouldn’t forget the externalities related to things like data centres. These things are hugely power‑hungry. If we don’t tax the externalities properly, we make them look cheaper than they actually are, relative to human beings. So we should be on top of that.

And, although it’s not my area, if I were the government I’d be saying we need to regulate AI to make sure it works for us as humans. It should be a tool we use, not a substitute for us. We should try to have some control over that.

On UBI, I think we should absolutely be thinking about whether we want a different kind of social support system in future – a different social security net to provide different forms of insurance or support. But in my mind, UBI either ends up being extremely expensive or too low to live on. In some sense, I think UBI is a bit of a red herring. The question is always: how do we redistribute, and from whom to whom? You have to work out who has income and how to get it to other people. That should be the question, rather than whether a UBI per se is the right mechanism.

The other thing worth highlighting is that people don’t just want income. They want good jobs and broader engagement with their fellow citizens. Even if we had a world where AI created lots of rents and we taxed them and redistributed the income, I don’t think that’s a world people would want if they didn’t also have good work and social participation.

Evidence gaps after the Deaton Review

Will:

A couple of years ago, the IFS published the Deaton Review of Inequalities, a very wide-ranging and comprehensive exercise. Where do you think are the biggest remaining gaps in the evidence base on the nature, causes and consequences of various forms of inequality, and on the solutions to them, and how can these gaps best be filled?

Helen:

There are a few things. One is that inequalities are not static – they change over time. So there’s an ongoing need just to measure them well, including different dimensions of inequality such as wealth, and to track them over time and across cohorts.

Another set of gaps is about interactions and causality between inequalities. Health and income is a classic example: poor health can lead to low income, and low income can lead to poor health. Similar stories apply to education, geography and other factors. Understanding those feedback loops is crucial for designing policy.

We also need more work on dynamic, long‑run effects. Something that looks OK or even good in a short‑run, partial‑equilibrium sense can look very different over 20 or 50 years once you account for how people and firms adapt. Immigration is one example where short‑term analysis can miss longer‑term structural change.

Then there’s the policy toolkit. Policymakers face taxes and benefits, regulation, competition policy, education, labour market policy and more. These instruments have to be combined to achieve a range of objectives – efficiency, growth, redistribution, resilience. Framing the trade‑offs in a way that is analytically sound but practically useful is very challenging and something we’re still working on.

In terms of themes, the Deaton Review highlighted areas like regional inequality and how to foster sustainable agglomerations beyond London and the South East; housing and its interaction with wealth inequality; health inequalities; and, increasingly, the distributional implications of technology such as AI. Those are areas where better data, better models and more evaluation of specific policy experiments would be especially valuable.

Has economics focused too much on efficiency?

Will:

Angus Deaton himself recently argued that economics as a profession has been overly focused on efficiency (and individual liberty) at the expense of social justice, and on ‘average’ indicators of economic success rather than questions of distribution. Do you agree with this analysis?

Helen:

There are areas – trade policy is a classic one – where economists historically focused heavily on aggregate gains and didn’t pay enough attention to who gained and who lost. That criticism has real force.

But I think there is a danger of caricaturing economics as only caring about efficiency. In practice, lots of economists, including at the IFS, have spent decades studying distribution. Equity–efficiency trade‑offs are built into the standard models.

Part of why efficiency can seem more prominent is communicative rather than substantive. On efficiency, economists often feel able to say, “This is the efficient outcome.” On distribution, there’s always an element of value judgement – “If you care about this distributional objective, then you should do X.” That makes efficiency results look crisper and more authoritative, even if distribution is being given equal analytical weight.

It’s important not to respond to past neglect by swinging too far in the other direction. Distribution matters enormously, but so does growth. Low‑growth economies are often terrible for equality in the long run, because there is less scope to improve living standards and politics becomes more zero‑sum. Policies that improve distribution today at the cost of significantly lower growth can leave future generations worse off, including those at the bottom.

The task is to take both efficiency and equity seriously, be explicit about the trade‑offs, and improve the tools for handling them – not to pretend that only one side of the trade‑off matters.

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I’m delighted to have co-authored this post with Mike Lewis, Director of TaxWatch.

Taxes are the price we pay for a civilised society, so the saying goes. But what if the civilisation that previous generations took for granted looks to have disappeared into the sunset, seemingly never to return?

The expectation that living standards would continue to improve from generation to generation has been cruelly undermined in recent decades, with today’s young people no longer able to rely on secure work, affordable and decent housing, a reasonable pension, even a liveable planet. The social contract is fraying. The impact of this shows up in worsening mental health, in declining faith in democracy, perhaps even in an apparent resurgence of religious belief and practice.

Previously overlooked survey data from HMRC into the public’s attitudes to tax evasion and avoidance suggests that this intergenerational attitudinal faultline might also extend to the tax system.

Research on attitudes to tax tends to focus on attitudes to tax policies, especially around government Budgets and other ‘fiscal moments’, and not on attitudes to tax behaviour. This means that we know quite a lot about people’s opinions of how high taxes should be, and about who and what should be taxed. Sentiment about tax levels varies, but most people – unsurprisingly - want the wealthy and large companies to pay more tax, but don’t think they themselves should pay more.

We know much less about people’s opinions of complying with the existing tax system. Not who should pay and how much, but simply: should people pay their due taxes?

One relevant body of data, though, is HMRC’s annual surveys of UK taxpayers (‘customers’). For several years now these surveys have included questions on the prevalence and acceptability of tax avoidance (“exploiting tax rules to gain a tax advantage”) and tax evasion (“some people don’t tell HMRC about all their income”). They poll individual taxpayers as well as tax advisers, and small, medium and large businesses.

Individuals’ attitudes to tax evasion and avoidance throw up some striking patterns. The most noticeable finding is that ‘tax morale’ seems to be falling across all age cohorts, but is persistently lower - and falling faster - amongst the youngest age cohort.

In 2024, 31% of 16–to-34-year-olds said that it is ‘always’ or ‘sometimes’ acceptable for people not to tell HMRC about all of their income (tax evasion), compared to 17% of people aged 35 or above. Back in 2018, only 23% of 16–to-34-year-olds (and 15-17% of older age cohorts) thought that this was ‘always’ or ‘sometimes’ acceptable.

Similarly, in 2023, 29% of 16–to-34-year-olds said that it is ‘always’ or ‘sometimes’ acceptable for people to exploit tax loopholes (tax avoidance), compared to 21-24% of people in older age cohorts. In 2018, only 24% of 16–to-34-year-olds thought that this was OK, compared to 16-19% of people over 35.

A gender breakdown has only been published since 2022, but this shows a significantly higher level of acceptance of both tax avoidance and tax evasion among men than among women.

Public attitudes to tax and spending in the UK are normally ‘thermostatic’. People react to lower taxes, spending cuts and poorer public services by increasing their support for tax-and-spend policies, but swing back to supporting tax and spending cuts after a period of higher tax-and-spend which has led to improved public services. This contrasts, for example, with public attitudes in many Scandinavian countries, whose tax systems enjoy strong support despite high levels of taxation because they pay for strong public services that are often universal and wide-ranging (e.g. universal free childcare).

Could the latest HMRC data suggest that public attitudes to tax have moved in the opposite direction from the Scandinavian ‘virtuous cycle’, towards a ‘vicious cycle’ where public services - and the broader legitimacy of the state and the social contract - have frayed to such an extent that a growing minority of taxpayers, particularly among the newest generation, no longer believes that paying tax is necessary if you can get away with not doing it?

There’s some evidence for this from the latest British Social Attitudes survey, which has tracked public attitudes to tax and spending for forty years. Taxing and spending more is still much more popular than taxing and spending less: 40% of people would like to raise taxes and spend more on health, education and social benefits; compared to only 15% who want less tax-and-spend. But that 15% is the highest that it has ever been since the survey started in 1983. Between 1990 and 2020, support for lower tax and spending bubbled along at between 3% and 9%. It’s seen a large uptick since 2021.

One obvious interpretation is that this rise in opposition to current levels of tax and spend is just the normal ‘thermostatic’ reaction to the expansion of the British state since the pandemic. But the unprecedented level of this sentiment, alongside a widespread feeling that the state is not over-funded but crumbling, suggests that something new may be going on. To tell us what is driving these sentiments, we need more work on the social, age and gender breakdown of these opponents of tax and spend – but the trend is clear.

Of course, younger people (/voters/taxpayers) get less out of the tax system than their older peers, because they are less prolific and expensive users of public services, not least the NHS, which is bound to have some impact on how they think about paying taxes. And comparing attitudes to tax avoidance and evasion between age groups is complicated by broader differences in political attitudes between those groups, as well as the contrasting views of young men and young women.

Nonetheless, there’s clearly something more at play here, and it seems reasonable to assume that the fraying social contract has a key role to play in reducing the support of younger generations for the tax system. People are getting less civilisation in return for their taxpayer pound.

The problem is likely exacerbated by the strong public perception – not unjustified – that the wealthy are not contributing their fair share of tax revenues into the system. This dynamic is compellingly illustrated by recent research from the London School of Economics, in which an experiment undertaken with 4,000 survey respondents in the US found that when people are made aware that the super-rich pay lower total tax rates than the rest of the population, they are more supportive of raising taxes on the wealthy, but less supportive of taxes on the middle classes. In other words, because low taxes on billionaires are widely considered to be unfair, this in turn undermines support for broader-based tax rises. If those with the broadest shoulders are not paying in their fair share, why should everyone else have to pay more?

Whatever is driving these patterns of taxpayer sentiment, the HMRC data on attitudes to tax dodging contain a warning for politicians. Without urgent action to improve public services and the social contract, alongside steps to ensure that the richest are paying their way, there’s a real risk that public consent not just for raising more revenues to fix the UK’s crumbling public realm, but for complying with tax obligations at all - starts to dip into dangerous territory over the coming years.

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At the beginning of 2026, we’ve chosen to explore some of the biggest forces undermining the fairness of our economy, including the capture of economic interests by the wealthy and powerful, and the need for a national shared culture to overcome our economic and social challenges.

A reminder that this is a new feature that we are running once a month, at the end of every month, as one of our regular weekly posts (the rest of which will continue to alternate between opinion articles and report summaries, but will also feature interviews with key experts and thinkers). If you would prefer to hear from us monthly rather than weekly (or to stay on weekly but minus the monthly roundups), you can change this by editing your email preferences, but by default you are still opted in to the regular weekly posts (‘Fair Comment’) as well as these monthly roundups.

Harnessing fairness as the foundation of social cohesion

In a guest post, Fairness Foundation Senior Adviser Emeka Forbes made a compelling case for fairness as one of the civic values that can make collective life possible.

At a time when Britain faces a growing crisis of social cohesion, marked by rising polarisation and weakening trust, this argument feels especially urgent. While governments often seek to strengthen communities through targeted investment, Emeka argued that such interventions tend to address symptoms rather than root causes. Upstream lies a more fundamental challenge - a weakening sense of who belongs to a shared national “we”.

Fairness, he suggests, can provide the civic foundation on which rules, norms and expectations rest. A widely held sense of sense of fairness helps establish common rules of the game, anchors a shared national direction, and offers a unifying narrative that can cut across political and cultural divides.

Importantly, it allows people with differing values to recognise one another as sharing the same social space. In doing so, it lays the groundwork for thicker forms of culture, and for a stronger sense of collective ownership over the country we share and the direction it should take.

“Societies that struggle to live together to act together.”

His analysis echoes a growing body of evidence showing how the perception of unfairness is corroding the social bonds that hold communities together. A widespread sense that the economy is rigged, reinforced by extreme wealth inequality and a lack of asset ownership, is undermining trust and driving pessimism.

These themes emerge strongly in the work of the Independent Commission on Community and Cohesion. Its recent report, The State of Us, highlights how interconnected pressures are compounded by a failure to sustain meaningful action on cohesion and community life.

Its findings are bolstered by the report produced by This Place Matters, a project led by UCL Policy Lab, Citizens’ Lab and More in Common. Polling for that work last May found that 44% of Britons said they sometimes feel like they are a stranger to those around them, with lower income Britons more likely to feel less trusting and more disconnected from society.

The challenge of cohesion is profound, and forms one part of the Government’s landmark Pride in Place Strategy. Yet as Emeka suggests, such efforts will only be fully successful if the country shares a sense of a national mission, grounded in common values like fairness.

The capture of economic policy by elite interests

This month, we also examined the alignment between economic elites in the UK and political decision-making in an opinion piece by Will Snell.

Lobbying in the UK has long been criticised as opaque, weakly regulated and dominated by wealthy commercial interests.

In recent years, a number of government proposals have been widely perceived to have been diluted by sustained industry pressure - from abandoned plans to tackle carried interest to the decision to spare the banking sector from tax rises.

The mechanisms through which powerful economic interests shape policy are not always straightforward. Distinguishing between overt lobbying, structural bias, and deeper forms of ideological influence is often difficult.

Our piece builds on earlier research by Spotlight on Corruption, which revealed a stark imbalance in access to policymakers. That research found that business and commercial stakeholders secured meetings with decision-makers at a ratio of 23 to one compared with civil society and consumer groups.

Will unpicks the drivers of this gross disparity, pointing not only to lobbying power but to a range of structural factors, including limited state capacity, skewed media incentives, and chronic short-termism in Whitehall. Beyond this, he argues that ideological capture narrows the range of policies considered legitimate, privileging certain economic interests while marginalising others.

The result is a vicious cycle linking economic inequality with political inequality. It is little surprise, then, that our polling suggests that 63% of people believe the very rich wield too much influence over UK politics. Similarly, ONS data shows that 69 per cent of people feel they have little or no say in what the government does.

These perceptions were only sharpened last week as global economic elites convened in Davos for the World Economic Forum. As the event began, new Oxfam research highlighted that billionaires are 4,000 times more likely to hold political office than ordinary citizens, and that since 2020 billionaire wealth has increased by 81%. Against this backdrop, the concentration of wealth alongside democratic power feels increasingly stark.

Fortunately, the publication of the forthcoming Elections Bill presents an opportunity for the UK government to begin addressing some of these structural failures. For our part, we have been working alongside Transparency International UK to make the case for caps on political donations - a reform supported by 67% of the public in polling released earlier this month.

These measures would represent a meaningful step towards rebuilding trust and curbing the outsized influence of money in British politics.

Interview with Claire Godfrey about monopoly power

Meanwhile, our Senior Researcher Jack Jeffrey sat down with Claire Godfrey from the Balanced Economy Project, an anti-monopoly, pro-democracy organisation, to discuss some of the biggest forces shaping our unequal economy today. You can read the full interview here.

Drawing on her research, Claire set out a clear argument that when too much power is concentrated in too few hands, the consequences are damaging for society as well as for the economy. She outlined how dominant firms gain an outsized influence over public policy, with structural and strategic advantages that allow them to shape markets and limit competition. The result is an economy that stifles genuine entrepreneurship, innovation and dynamism.

Claire illustrated the real-world consequences of anti-competitive markets across a range of sectors - from farmers operating on razor-thin margins while surplus is captured by agribusiness monopolies, to cartel-like behaviour in pharmaceuticals and the growing market-shaping role of large asset managers.

Claire linked the forces of monopolisation directly to rising inequality and the growing public sense that the deck is stacked against ordinary people.

She also reminded us that far from being a natural outcome, market concentration is the result of deliberate policy choices from government. The good news is that policymakers already have the tools to tackle the extreme monopolisation that fuels political influence and reinforces wealth concentration in a self-perpetuating cycle.

However, challenging this settlement requires greater political imagination. As Claire highlighted, the UK has never truly experienced free and fair competition, with rent-seeking and extraction long embedded in the structure of our economy.

“A vibrant economy built on small businesses, entrepreneurship, and dynamism is good for innovation and good for society. But that is impossible without a level playing field.”

A genuinely productive economy with sustainable and inclusive growth will depend on competitive markets and inclusive economic models. Jack’s interview with Claire built on our previous research exploring the flaws of corporate and financial governance, as well as work by the Co-operative Party exploring what ‘Grassroots Growth’ looks like in practice (research that we were delighted to contribute towards).

Claire’s analysis of the need for inclusive growth also complements the research conducted by the Good Growth Foundation in Mind the Growth Gap, which looked at ordinary people’s perceptions of broad-based growth.

This was the first interview of our new monthly series. If you have suggestions for who we might interview next, we’d love to hear from you.

Looking ahead

This month, we examined inequality, the capture of economic policy by powerful elites and the case for a more balanced economy - all underpinned by a shared commitment to fairness as a core civic value. In the coming months, we’ll continue to focus on these challenges and the ideas needed to address them.

Thank you for following our work and being part of the conversation.

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From now on we’ll be running interviews once a month or so in Fair Comment. In this first interview, our Senior Researcher Jack Jeffrey talks to Claire Godfrey, Executive Director of the Balanced Economy Project, about how concentrated corporate power threatens democracy, innovation, and fairness.

Jack Jeffrey (JJ): As Tim Wu puts it in his excellent book The Curse of Bigness, two major trends define today’s advanced economies: rising wealth and income inequality, and increasingly concentrated markets. We see fewer and fewer firms dominating sectors, most visibly big tech but also many other industries, to such an extent that a recent UK government report even warned of a tendency toward ‘oligopolistic structures’. What, in your view, is wrong with this? And by way of answering, could you explain what the Balanced Economy Project is and what it is trying to do?

Claire Godfrey (CG): The Balanced Economy Project was founded in 2021, inspired in part by the long-standing anti-monopoly movement in the United States. Of course, concentrated corporate power is not just an American problem. The UK has its own monopolies, but the US has also exported its monopolistic firms and practices globally. Our purpose is to revitalise competition enforcement, which is a hidden but powerful policy tool that has become severely underused.

The basic problem with concentrated markets is simple: too much power in too few hands is bad for society generally, but it is especially bad for the economy. A functioning democracy depends on ensuring that private actors do not become more powerful than the state and the people. Governments grant firms the right to operate; that right is not unconditional. Historically, states have intervened when concentration threatened broader social interests. Roosevelt’s break-up of Standard Oil is an obvious example, as is the Allied break-up of IG Farben after the Second World War.

Without active enforcement, dominant firms can set prices as high as they choose, since consumers become dependent on them. There is no competitive pressure to innovate, so society loses out on technological advancement and innovation. Workers, meanwhile, have fewer employment options and must accept the terms dictated by dominant employers.

Concentrated firms also gain outsized influence over public policy. When they become ‘too big to fail’, governments are forced to accommodate them. These companies acquire structural and strategic dominance - the capacity to shape markets and, in some cases, entire economic sectors. Their lobbying power allows them to shape legislation and policymaking in ways that entrench their position.

JJ: To what extent do you think the anti-monopoly perspective helps to explain the economic grievances and disaffection we see today? How is concentrated corporate power interacting with rising inequality and stagnating living standards? Can monopoly dynamics help explain why politics feels so volatile?

CG: I think people intuitively know when they’re being cheated. Many feel they are being denied a fair shot at a good life. If people believed they were operating within a fair system, that would be one thing, but the prevailing system actively dissuades entrepreneurship and undermines opportunity. The anti-monopoly movement is fundamentally pro-opportunity. But small businesses are being squeezed out – around 300,000 small firms have disappeared since the pandemic.

It’s in this way that concentrated corporate power fuels inequality. Economic power begets wealth, which begets more political power, which in turn reinforces wealth concentration. What we are trying to show is that policymakers actually do have tools that directly target this and stop power and wealth concentrating. We have laws that allow governments to block mergers or break up companies. We simply no longer use those laws in the way they were intended.

JJ: In the United States, the anti-monopoly movement has drawn support from an unusual coalition. Both the progressive left and parts of the populist right are critical of big business, to the point where figures like Bernie Sanders and Steve Bannon have said strikingly similar things, for instance praising Lina Khan. What is it about this agenda that transcends traditional political cleavages? And why hasn’t anything similar taken root in the UK?

CG: The UK has an unusually monocultural economic ideology. All political parties, including significant parts of the progressive left, have absorbed a neoliberal worldview. Our political thinking is unusually constrained; “there is no alternative” still shapes the intellectual environment.

We also lack a strong tradition of civil society contestation. In the UK, advocacy groups have tended to adopt a “constructive engagement” approach, working within the mainstream structure, seeking incremental gains. But if you challenge the structural integrity of the system, you are treated as illegitimate or ‘anti-capitalist.’ That dynamic generates a chilling effect. Even peers and allies often self-censor, which suppresses deeper structural debates. In the US, by contrast, there has been more willingness to challenge concentrated economic power directly, and more political imagination around alternatives.

JJ: This surprises me, because the UK has a long tradition of supporting competitive markets. Parts of neoliberal thought are, in theory, strongly pro-competition. I think it depends on what you think the purpose of a market economy is. There’s a line in Charles Moore’s biography of Thatcher where he says that Thatcher set out to make a country in the image of her father – a small business owner – and ended up making a country in the image of her son – a profligate stock trader.

CG: Yes, but the UK has never truly experienced ‘free competition’. Our markets have always been distorted. Rentierism and extraction have been baked into the structure of the economy forever. That makes it difficult for free-market advocates to make a coherent case for competition, because the reality of the market bears no resemblance to their theoretical model. I do believe competition is healthy. A vibrant economy built on small businesses, entrepreneurship, and dynamism is good for innovation and good for society. But that is impossible without a level playing field.

JJ: Agreed. Competition policy has traditionally focused on consumer prices and choice. But monopolies clearly have broader, more pervasive effects. How do monopolies affect workers, communities, and the wider economy?

CG: Regulators have become narrowly focused on prices and market openness. Even on those metrics, they have not been particularly successful – prices have risen, and markets have become more concentrated. But the impacts go far wider. As I mentioned earlier, dominant firms exert structural and strategic power over government decisions. They shape the economy in ways that reflect their interests, not public priorities. That is a democratic problem.

When there are only a few major employers, workers face fewer choices and weaker bargaining power. Terms and conditions worsen and mobility declines, making it much more difficult for workers to get ahead.

Another important issue is supply chains. Agriculture is a clear example. Large agribusiness monopolies tightly control supply chains and extract value at every stage. Farmers face razor-thin margins because the surplus is captured further up the chain. Another example is healthcare. We recently wrote to the Competition and Markets Authority (CMA), alongside Just Treatment and Global Justice Now, urging an investigation into cartel-like behaviour by US pharmaceutical companies. Several large US firms signalled – within days of each other – that they would withdraw investment from the UK unless the NHS agreed to pay higher prices for their products. This happened during UK-US trade negotiations and appears to be an attempt to exploit geopolitical leverage. The NHS has now agreed to pay more, so that money must be taken from elsewhere within the health budget. That affects patients, services, and outcomes.

Another area is the dominance of big finance – BlackRock, Blackstone, Vanguard, and others (our new report, Too Big to Cool the Planet, goes into detail on this). Their power isn’t often framed as a monopoly issue, but it has profound consequences. These firms shape markets, decide which sectors receive investment and steer capital away from the real economy. The financial system is no longer structured to support productive activity; instead, it funnels capital into speculative activity and wealth extraction. That harms small businesses and reduces economic dynamism.

And then there’s big tech, which creates behavioural and economic dependencies. People rely on specific platforms and ecosystems, which are designed to maximise lock-in. Algorithmic control influences narratives, behaviour, and even cognition. There are also serious mental health implications, particularly for young people, associated with the ways digital platforms are designed.

JJ: This seems like a good point to turn to the Labour Party and its current agenda. Labour has made ‘growth’ its central priority. That appears to be translating into a more relaxed attitude toward the UK’s competition regime. There seems to be an assumption that strong competition policy might conflict with a pro-growth, pro-investment strategy. What do you make of that?

CG: I find the government’s theory of change on growth hard to understand. They seem to believe that deregulation and ‘competitiveness’ (which is very different from competition) will attract investment. But competitiveness typically means offering increasingly favourable terms to capital – a race to the bottom. The concept of competitiveness is a floating signifier in the sense that it lacks a fixed meaning, allowing it to confuse competition between private actors in markets with competition between states or regions - a very different set of processes. Ideologues and vested interests exploit this vacuum to argue that states should transfer resources to them to help them compete globally - for example via subsidies, preferential tax regimes, permissive merger control and competition policy, or weak regulatory, environmental or social protections.

Some US investors are interested in the UK: data centres, infrastructure, and so on. But the real question is the quality of that investment. Investment only matters if it benefits the wider population. Much of this appears rooted in a discredited trickle-down theory. Wealth does not reliably trickle down. In fact, substantial portions of private investment flow back out of the country, or upward into shareholder returns and tax haven structures. This is wealth extraction, not wealth creation. Even if GDP rises marginally, GDP is not a measure of social wellbeing. As Donald Kaberuka once put it: “You can’t eat GDP.”

This is not a Keynesian model of growth that produces multiplier effects across communities. It is not inclusive. It does not promote broad-based prosperity.

By chilling the competition authority, i.e the CMA, Labour appears to be signalling that regulatory assertiveness is unwelcome. That is part of the ‘competitiveness’ agenda: telling large firms that mergers will not face scrutiny, that enforcement will be relaxed, and that the UK intends to make life as easy as possible for big business. Yet in reality, innovation and sustainable growth depend on competitive markets, entrepreneurialism, and a level playing field. Weak competition policy undermines these conditions.

JJ: Let’s turn to the CMA. Under past Conservative governments, the CMA built a reputation as a relatively assertive regulator. It wasn’t afraid to intervene in big mergers, the Microsoft-Activision case being the obvious example (even though that eventually went through). But the Labour government is taking a different tack. After a public falling out with the previous chief executive of the CMA, Rachel Reeves appointed a former Amazon executive to the role. That tells you all you need to know.

From a UK strategic perspective, how far can a mid-sized country go in challenging multinational giants? Where is the line between necessary regulatory assertiveness and counterproductive isolation? And given how embedded these platforms have become, is meaningful intervention even possible?

CG: The CMA seems to have retreated on competition enforcement, shifting its focus more toward consumer protection. My guess is that they feel safer operating in that space, where they are less likely to attract criticism from either the Trump administration or the UK government. But this is shortsighted. There are 27 competition authorities across Europe, plus the European Commission, plus the UK. It is extraordinary that there is not more coordination among them. If agencies acted collectively, they could withstand pressure from powerful corporate and geopolitical interests.

As for embeddedness - yes, big tech is deeply entrenched. But it is not too late. The current generation of AI systems is likely to become obsolete relatively quickly. Big investors are already concerned about this, and looking for their next lucrative source for returns. The next generation of AI models will embed themselves even deeper into our economic and social systems. This is exactly the moment to establish guardrails.

This cannot be left to policymakers alone. Citizens must also articulate what they want from AI and digital technologies – what is acceptable and what is not. Otherwise, the pessimistic view (“we can’t do anything, they’re too powerful”) becomes self-fulfilling. But people power is real. Public mobilisation has always been one of the most effective tools for curbing monopoly power.

JJ: That’s useful. Could you say more on that? In the absence of a more forthright regulator, what can be done? What tools or approaches can we use to tackle monopoly power?

CG: I think solutions will need to emerge from the bottom up. If we think of capital and the state as the top, then the impetus for change must come from alternative ideas, narratives, and models. We need a compelling vision of what an alternative economic settlement would look like – one capable of attracting broad public support. Where that will come from is unclear. We hope to contribute, but no single organisation can generate that vision alone.

Consumer behaviour also matters. People can choose alternatives, demand alternatives, or create alternatives, particularly in relation to big tech. Creativity and refusal can be powerful forms of resistance.

Another possibility is crisis. Crises create space for structural change – an AI bubble burst, a financial crash, or other systemic shocks. But as we know from 2008, crises often reinforce monopoly power rather than weaken it. In moments of crisis, dominant firms use their leverage to secure preferential treatment from governments.

Ultimately, we need organisation, demands, and political imagination. At the moment, government and public policy are deeply captured by private interests. Without countervailing power, change is difficult.

JJ: Perhaps we can end on a slightly more optimistic note. Where do you see signs of hope?

CG: Optimism is difficult, but I do think Zohran Mamdani in the US offers genuine hope. He has brought Lina Khan onto his team, and I expect him to be influential across the US, Europe, and the UK as an example of what can be done.

During the Biden administration, the Federal Trade Commission and the Department of Justice under Lina Khan and Jonathan Kanter generated real momentum. Their leadership emboldened authorities around the world. When that diminished, the global movement weakened. But anti-monopoly politics retains cross-partisan appeal. It resonates across ideological lines because it speaks directly to people’s lived grievances. If articulated clearly, it is a “sense-making” framework: it helps people understand the system they are living in. That makes it politically powerful.

The challenge in the UK is the absence of compelling public spokespeople. In the US, Mamdani, Khan and Kanter succeeded because they went out and spoke directly to communities. They listened. They mobilised people by engaging with their lived experience. That kind of political engagement is rare in the UK. Our politicians seldom frame issues through the experiences of their constituents unless doing so serves a narrow political purpose. That needs to change.

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Conspire, /kənˈspʌɪə/, late Middle English: from Old French conspirer, from Latin conspirare ‘agree, plot’, from con- ‘together with’ + spirare ‘breathe’.

Most people would agree that conspiracies are bad. However, the core meaning of the word ‘conspire’ is simply to ‘breathe together’, and at various points in history this word has been understood in this more neutral sense rather than its usual negative sense.

Some people believe that our political and economic elites are actively engaged in a shadowy conspiracy to rule the country (or the whole world) in their own interests. I don’t subscribe to this theory, but you don’t need to be a conspiracy theorist to acknowledge the clear evidence that there is at the very least some ‘group breathing’ going on. If there wasn’t some level of alignment between these two groups, it would be hard to explain why our elected politicians regularly make policy decisions that seem to privilege the interests of wealthy people and businesses over those of the public at large. A recent example is the failure to include reforms to capital gains taxation in November’s budget - reforms that were supported by experts from across the political spectrum.

To what extent is this alignment the product of a cosy groupthink, or is it to some degree dependent on proactive and sustained lobbying from ‘economic elites’ to overcome any dissenting voices from either within or outside the halls of power?

What is clear is that there is a lot of lobbying, and it is often opaque and poorly regulated, and it is overwhelmingly carried out by ‘economic elites’ as opposed to those who represent a different or broader set of interests. This can be quantified (see below). What cannot be quantified is how much this lobbying actually influences government policy decisions. But it is certainly the case that wealthy groups exercise undue influence on policymaking, especially when it comes to economic policy.

How economic policy decisions are made matters in terms of what decisions are made, but also because unfair processes based on unequal political influence undermine public faith in democracy.

And that faith is already low. Our polling last year found that 63% of Britons think that the very rich have too much influence on politics in the UK; in 2023 we discovered that 75% of people are concerned that people with net wealth of £10m or more have too much influence on the political system, and the ONS has shown that 69% of people feel that they do not have any say in what the government does.

Perception is not the same as reality, but reality drives perception, and the link between the two is particularly strong in this case, reinforced in the public mind by evidence both of the process (high-profile instances of ‘one rule for them, one for the rest of us’ in politics, such as partygate during Covid) and the end result (broken social contract, spiralling cost of living, crumbling public services, and so on).

We can debate whether a particular economic policy decision was the right one or not, but it is hard to defend a system where policy is not made openly, fairly and with due regard paid to the public interest.

And yet that is the system that we have. Last year, a report by Spotlight on Corruption examined who got access to ministers, senior officials and special advisers in six government departments responsible for economic decision-making, by reviewing data on meetings, hospitality and secondments between January 2019 and September 2024 (i.e. including the first three months of the new Labour government).

The report looked at who decision-makers are meeting most to see whether certain groups, such as charities and consumer groups, or academics – groups that provide a public interest perspective, and a counterweight to private commercial interests – were getting squeezed out. It also explored whether business groups are getting additional access and influence through other routes like hospitality and secondments and, if so, how. Given that the main route for the public to feed into policy is through public consultations, it looked at whether these are actually providing an effective route for participation, focusing on consultations held by the Treasury between 2019 and 2024. Finally, it looked at the other routes through which outside interests can exert influence over policy making, from employing former ministers or officials, to undeclared meetings with party donors.

The findings are pretty shocking. The ratio of business and commercial stakeholders getting meetings compared to civil society and consumer groups was 23 to one. Just 2.3% of stakeholders who met with ministers and senior officials in the Treasury were from civil society or consumer groups prior to the election – and this dropped even further after the election, to 1.5%. Some firms exercised even greater influence through hospitality and secondments. Barclays and HSBC provided the first and second most hospitality to senior Treasury officials, and had the third and first most meetings respectively with them. Firms including HSBC, Lloyds, UK Finance and Aviva, who get the most meetings and provide significant hospitality to Treasury senior officials and ministers, have also had secondees in the Treasury, suggesting that they may be getting “a third bite at the influence cherry”. Over 50% of respondents to Treasury consultations come from industry (where details of respondents are provided).

As Spotlight on Corruption points out, “given very limited information about what is discussed in meetings being published, it isn’t possible to tell whether they were able to influence the shape of government policy under consultation through these meetings.”

And these gaps in the data are a real problem. The Chartered Institute of Public Relations – the trade body for lobbyists! – says that apart from Australia, the UK’s lobbying regime is the only one in the Western world that fails to capture in-house lobbyists — creating an impression on the world stage of a “no rules Britannia”. The CIPR goes as far as to say that the continued failure to address the issue “simply adds fuel to the perception that our government is not only corrupt but is deliberately so”.

Spotlight on Corruption sets out why this is a problem: “More participatory and open decision-making wouldn’t just help rebuild public trust. It would also help ensure better decision-making, widening the evidence base for policy making and reducing risks of policy capture by vested interests. But much of decision-making in government is done in the dark. It is still far too hard to find out who is influencing decision-makers in the UK government and there are multiple loopholes and transparency deficits in the UK government’s lobbying regime. That is despite numerous expert recommendations to improve lobbying transparency. Meanwhile, recommendations made by ethics experts to level the playing field to ensure fairer access to decision-makers have gone unheeded.”

The report recommends “radically enhancing transparency across the board” to protect economic decision-making from ‘policy capture’, but it also recognises the need to go beyond this, by taking more proactive measures to enhance participation in government decision-making. This is certainly necessary; opening policy-making processes up, as already happens with consultations, will not level up political influence on its own in a society marked by high levels of economic inequality, any more than tackling the most obvious examples of group-based discrimination will be sufficient to provide everyone with genuinely equal opportunities to maximise their potential. Equity of access is needed; equality of access is not enough.

Spotlight on Corruption is planning to add to this evidence base over coming months, with some case studies of economic policymaking in two areas to examine who the government talking to and to what extent it is making policy in the public interest, as well as policy guidance for the government on how they can ensure equity of access for all stakeholders to government decision-makers on economic policy.

So there’s a clear problem with the excessive influence of economic elites on economic decisions by government. And there are some clear practical steps that government can take to address some of the most visible aspects of the problem. But is the undue influence exerted by lobbyists the entirety of the issue, or the tip of the iceberg? What if decision-makers in government already agree with what the lobbyists are saying?

The reality is messy, of course, and there’s a spectrum of possibilities here. At one end, there might be total alignment on policy thinking between government and lobbyists. At the other, there might be initial resistance from government that is overcome by persistent lobbying and by concern among politicians about the political risks of ignoring it. In between these two scenarios, politicians might think about the economy in ways that make them more amenable to the arguments of lobbyists, or might not have the convictions, vision or subject matter expertise to be willing or able to push back on them. Most of the time, more than one of these factors will be in play when it comes to debates within government (or even inside the heads of individual politicians).

Then there are a set of unhelpful incentives and limitations within government. Politicians tend to act in the interests of the wealthier 50% of the population who own property (in part because they are more likely to vote), as well as being unhelpfully incentivised by our ‘first past the post’ electoral system. They are heavily incentivised to think and act in the short term, and are constantly distracted by multiple crises at home and abroad. To make things worse, they often find that when they pull a lever, nothing happens; the policymaking capacity of the British state has been undermined by a combination of factors (Sam Freedman identifies excessive centralisation, inadequate parliamentary scrutiny and the triumph of comms over policy, while Liam Byrne points to a broader set of capacity constraints, and Martha Dacombe looks to a set of misaligned incentives affecting the choices of Ministers and civil servants). And there are other ways beyond lobbying in which the wealthy can exercise undue influence on politics, not least donating to political parties.

The issue is further muddied by the ways in which public and media conversations about the economy don’t always start from a neutral perspective. In 2023, the BBC’s review into its own impartiality in its coverage of fiscal policy found that BBC journalists often unintentionally presented political choices about fiscal policy issues as inevitable outcomes, or used misleading metaphors such as comparing the economy to a household budget. There’s an imbalance when it comes to experts too; many economists would argue that they are concerned with equity as well as efficiency, but this did not stop the Nobel prize-winning economist Angus Deaton from making the following critique: “After economists on the left bought into the Chicago School’s deference to markets — ‘we are all Friedmanites now’ — social justice became subservient to markets, and a concern with distribution was overruled by attention to the average, often nonsensically described as the ‘national interest’.” And there’s a broader problem that, as a society, we succumb to a meritocratic narrative that overstates the importance of individual effort and underplays the role of luck.

In a sense, there’s a problem here of ideological capture, not just capture of the policy-making process. This isn’t a new phenomenon; if anything, the postwar decades in which governments broadly pursued policies in the public interest were an exception to the usual pattern of the policymaking in the interests of financial elites that has been documented by Peter Turchin, Luke Kemp and others (including Walter Scheidel, who has argued that rising inequality only goes into reverse after periods of violence and catastrophe). Thatcher’s project to unpick the postwar consensus was carried forward by New Labour, despite their efforts to soften the impacts of neoliberalism on the poorest. We still don’t really know what the current Labour government wants to achieve, which perhaps helps to explain why it has proven to be so vulnerable to lobbying.

All in all, it’s very hard to tease apart the most important reasons for the failure by successive governments to deliver economic polices that serve the interests of the majority of their citizens. Lobbying clearly plays a key role, alongside misaligned incentives and issues of state capacity. But the dominance of certain ways of thinking among many people in key policymaking and influencing positions also has a huge impact on what decisions are made, and how they are reached.

Addressing all of these issues is a very tall order. But, as Spotlight on Corruption has laid out, there are some very obvious practical steps that can be taken now to clean up our under-regulated lobbying industry, and thus to tackle the feedback loop by which economic inequality spills over into political inequality. A more transparent and inclusive policymaking process will deliver better policy, as well as helping to rebuild public faith in democratic politics.

Further reading

Levelling the playing field: How economic policy gets captured and what to do about it

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Britain faces a real crisis of cohesion. We’ve seen the convergence of declining trust, increasing polarisation, and a worsening sense of disconnection from institutions, politics, and from each other.

That matters in its own right, but it also matters instrumentally. Societies that struggle to live together struggle to act together. Economic growth depends on cooperation, political stability depends on shared legitimacy, and collective ownership of our national direction depends on a sense of shared purpose.

Policymakers and practitioners alike have focused on strengthening practical opportunities for connection, and building bonds within communities and between them. This has included paying attention to the everyday spaces where people meet and mix, as well as looking at barriers to connection, from deprivation to inequality, prejudice, extremism, and isolation.

This work is necessary and valuable. But too often, starting this far downstream misses a question at the source of our cohesion challenge — who do we recognise as part of a shared “we”?

This question casts our cohesion crisis not solely as one of disconnection and division but also as a problem of disassociation from a previously shared understanding of the collective.

For much of the post-war period, there was broad — if often implicit — agreement about who counted as part of the civic body and what mutual obligations followed from that. That agreement has weakened over time.

Different pressures now pull in different directions when it comes to how to recast our sense of shared “we”. Should we freeze belonging as it stands, based on our social settlement to date, do we narrow it, as many on the right would have it, or do we expand it, as many on the left would advocate?

In rejecting the calls to narrow our definition of those who belong, we can think about how to build and strengthen recognition of our shared “we” — either on its current basis, or in some expanded way — by considering the process of recognition itself.

How might people with very different backgrounds, beliefs, and identities come to recognise one another as legitimate participants in a shared civic project? And how can we create a framework capable of navigating ongoing changes to our body politic in the future?

Shared culture and values are clearly critically important to enabling this, but attempts to impose cultural homogeneity are neither practical nor desirable. In diverse societies, thick cultural agreement cannot be assumed. Nostalgic visions of sameness tend to exclude. Permanently thin, procedural coexistence can feel hollow and imposed. The challenge is not to erase difference, but to establish the conditions under which thicker forms of shared culture can emerge organically over time.

Culture cannot be imposed, but the conditions for cultural convergence and indeed cultural hybridity can be shaped. Shared rules, norms, and practices — what might be thought of as lower-case civic culture — can create the enabling environment in which trust, recognition, and shared identity develop.

The question, then, is what kind of civic value is capable of playing that enabling role in a plural society. There are several candidates. Duty. Responsibility. Reciprocity. Contribution. But many of these quickly become culturally loaded or exclusionary. They risk being claimed by some groups and resisted by others. They can harden into moralised boundary markers rather than shared rules of the game.

There are few values with the cross-cultural salience of fairness. Across societies, people show a deep sensitivity to what they perceive as fair or unfair, even though cultures differ in how fairness is defined and applied. From early childhood, humans react strongly to perceived unfairness. Those reactions shape how we judge institutions, rules, and one another.

People experience unfairness as arbitrariness. Double standards. Being asked to play by rules that others escape. Being taken for granted. These experiences reliably undermine trust and willingness to cooperate. They push people away from shared institutions and toward withdrawal or anger. That is why fairness matters not just morally, but civically.

Fairness, in this sense, is not agreement on outcomes, but an agreement on rules: on how decisions are made, how power is exercised, and how people are treated within shared institutions. Crucially, it does not require shared identity, culture, or heritage. It allows people with very different values to recognise one another as equals within the same civic space. Fairness can help to create the minimal shared “we” on which thicker forms of culture and solidarity can later build.

Fairness also plays a second, equally important role. It underpins how people think about shared direction. If we were ever to ask a country like Britain what kind of future it wants to build over the long term, it is hard to imagine an answer that does not rest, in some way, on strengthening fairness. Fairness grounds our shared intuitions about opportunity, security, contribution, and legitimacy. It shapes how people imagine a good society and a good life. Even where people disagree sharply on policy, they often frame their arguments in terms of what they believe to be fair.

Research by the Fairness Foundation bears this out. Across political divides, people in Britain share strikingly consistent views on core fairness principles: that rules should apply equally, that contribution should matter, that opportunity should not be arbitrarily restricted, and that extreme economic inequality is hard to justify as fair. Fairness, in other words, is one of the few values capable of anchoring a shared sense of direction without requiring cultural uniformity.

But fairness cannot function — either as a basis for shared recognition or as a guide to shared direction — if it is not experienced in practice.

Deep inequality and deprivation have consistently undermined people’s experiences and perceptions of fairness. Severe inequality blocks participation in civic life, corroding trust, and weakening beliefs that the collective treats people as equals. When fairness feels implausible, its civic power collapses. And when fairness collapses, so too does the sense of shared obligation that underpins collective identity.

The state has a responsibility to create the structural conditions for fairness, but embedding this value — such that it can produce the effects described above — requires coordinated cross-societal action. It is a collective and self-reinforcing project. Where fairness is visible and credible, shared recognition strengthens, and where shared recognition strengthens, support for collective solutions — including redistribution and reform — grows.

Fairness alone will not rebuild cohesion. But without a shared civic commitment to fairness, attempts to rebuild community in a diverse society are made more difficult. Re-establishing shared recognition is the first step — with fairness acting as a strong foundation on which to build. From there, thicker cultural bonds, and a stronger sense of shared ownership in our country and the direction it takes, become possible again.

Emeka Forbes is Senior Advisor at the Fairness Foundation. He also runs the Secretariat for the Independent Commission on Community and Cohesion. He has written this article in a personal capacity.

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As 2025 draws to a close, we’ve been contributing to conversations about fiscal devolution, accountability in the tax system, and political transparency. Here’s a quick roundup of what we wrote about in December, and what others had to say on the same topics.

This is a new feature that we’ll run once a month, at the end of every month, as one of our regular weekly posts (the rest of which will continue to alternate between opinion articles and report summaries, but will also feature interviews with key experts and thinkers). If you would prefer to hear from us monthly rather than weekly, you can change this by editing your email preferences, but by default you are still opted in to the regular weekly posts (‘Fair Comment’) as well as these monthly roundups.

Exploring fiscal devolution in our new report

December brought the release of our new report, A Fair Share. The report is based on interviews with a wide range of stakeholders, including Mark Drakeford and Nicola Sturgeon, and explores the link between greater fiscal devolution and narrower regional inequalities. It outlines how to end the UK’s status as one of the most fiscally centralised economies in the developed world, and how to share wealth more fairly throughout the economy to benefit every community.

While momentum on fiscal devolution has grown in recent months, not least through the Budget’s announcement of new devolved tourism levy powers, the Government’s current legislation - the English Devolution & Community Empowerment Bill - sidesteps the issue altogether. That’s despite Secretary of State Steve Reed previously indicating his support for fiscal devolution. In fact, the Chair of the Housing, Communities and Local Government Committee, Florence Eshalomi MP, has called fiscal devolution “the one omission from the Bill”.

Of course, tourism levy powers are welcome. They have been called “the acceptable face of fiscal devolution” and, as the Institute for Government has said, represent “an important step towards greater fiscal devolution”. Yet they are no substitute for the kind of “bold and ambitious” progress on fiscal devolution that is needed. As the report argues, if further progress on fiscal devolution isn’t secured, the UK will remain an outlier on this issue.

In our report, we call for a new direction through a long-term approach, exploring a series of possible measures, including a Tax Devolution Commission to review the tax code and new legislation to ensure that no area is left behind.

Our findings reflect previous comments from the Chief Executive of the Northern Powerhouse, who has called fiscal devolution “a critical next step in strengthening the powers of mayors”, previous calls from Mayors such as Andy Burnham to accelerate fiscal devolution, and a report from Labour Together that called for greater devolved revenue-raising powers for major cities.

You can read the full report here and our op-ed in the Yorkshire Post here.

Calling for political donation caps

This month, we also took the opportunity to call for a fairer democracy, by highlighting the UK’s status as one of the few major democracies that hasn’t set a limit on political donations, in a new joint op-ed with Transparency International UK (TIUK).

This followed new TIUK polling, which revealed that 84% of people believe that wealthy individuals use political donations to advance their personal interests, echoing our previous research, which found that 75% of people think the very rich have too much influence on politics.

We argue that caps on political donations of more than £50,000 could help to build a fairer system where politicians are more accountable to the public, and where integrity and transparency protect democratic decision-making.

Our comments follow news of the largest ever single donation by a living person to a British political party, and the previous confirmation that last year’s poll was the most expensive general election in history.

Earlier this month, the Government published its UK Anti-Corruption Strategy 2025. The strategy aims to protect against corrupt actors seeking to exploit the UK’s political financing framework, and includes strengthened rules on company political donations, among other measures. However, it stops short of introducing caps on donations. Next year, the Government will introduce its Elections Bill and will host an Illicit Finance Summit to marshal a global effort against flows of dirty money. A previous petition to cap donations reached almost 145,000 signatures and was debated in Parliament last year.

You can read our full joint op-ed with Transparency International UK here.

Making HMRC work fairly for everyone

In a guest post, the Director of TaxWatch, Mike Lewis, outlined the importance of improvements to HMRC to boost fairness and improve the state of public finances. As Mike’s piece highlighted, one in 10 individuals and small businesses surveyed by HMRC last year reported that the tax authority had made an error in their dealings with them, while the proportion of people who reported a good experience in dealing with HMRC stood at 52%, an eight-year low.

In fact, only 27% of surveyed individuals felt that HMRC applies penalties and sanctions fairly to all taxpayers. The piece argues that HMRC needs to make individual and small business taxpayers believe that they are being treated fairly in order to improve trust in the institution and to improve compliance in the long run.

This follows a suite of new measures announced in the Budget to enforce tax compliance, which, as the piece points out, represents the third-largest revenue-raising mechanism in the Budget. However, TaxWatch has previously found that there are serious questions over whether HMRC is effectively using its current tools and resources to chase avoidance and evasion.

Moreover, the announcements followed a “year of drift on offshore secrecy”, earlier calls from an MP for HMRC to reveal the data it holds on the overall offshore tax gap, and suggestions that the gap - which has grown to around £47bn - could be a serious underestimate.

You can read TaxWatch’s annual ‘State of Tax Administration 2025’ here.

From fiscal devolution to political transparency, our December work reflects part of our bigger mission at the Fairness Foundation: building a fairer economy that shares wealth and power equitably throughout society. Thank you for following us! Next year, we’ll build on the progress we’ve made by looking in more detail at the difference between wealth extraction and wealth creation.

Small print: Most of our output is not very festive at all, and this is a review of our output in 2025, so ready yourself. Also, we’re publishing this a day after a horrific terrorist attack that took place during a gathering to celebrate the first night of Hanukah. Here’s hoping for a brighter start to 2026, with best wishes for Christmas to all who celebrate it and to the holiday season for everyone.

In the first month of 2025 the Fairness Foundation sent to me, a report about the risks of wealth inequality leading to societal collapse.

In the second month of 2025 the Fairness Foundation sent to me, a report about the opportunities for regulatory reform to both tackle inequality and boost growth.

In the third month of 2025 the Fairness Foundation sent to me, a thinkpiece about the advantages of a political platform based on economic populism.

In the fourth month of 2025 the Fairness Foundation sent to me, a report about the impacts of zero or negative asset ownership on people’s life chances and outcomes.

In the fifth month of 2025 the Fairness Foundation sent to me, a report about why politics needs to think and act in the long term, and how to make it happen.

In the sixth* month of 2025 the Fairness Foundation sent to me, another bloody report about societal collapse, only this time with more of a focus on climate risks.

In the seventh* month of 2025 the Fairness Foundation sent to me, a report about how the unfairness of Britain’s broken social contract drives support for populism.

In the eighth* month of 2025 the Fairness Foundation sent to me, a report about how alternative economic models can spread wealth and power more equitably.

In the ninth* month of 2025 the Fairness Foundation sent to me, a report about the (missed) opportunity in the Budget to tax wealth for fairness, revenue and growth.

In the tenth month of 2025 the Fairness Foundation sent to me, a report about the risks of the wealth gap to our society, economy and democracy, and how to respond.

In the eleventh month of 2025 the Fairness Foundation sent to me, a report about how extreme wealth inequality contributes to the risk of suicide.

In the twelfth month of 2025 the Fairness Foundation sent to me, a report about how a fairer economy relies on relaxing Whitehall’s grip on tax and spending powers.

Then they went for a long lie down and reflected on how next year’s outputs could do with being a bit more positive.

*These reports don’t quite line up to calendar months, but you get the idea.

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Today we’re publishing a report, A Fair Share, on the potential for increased fiscal devolution to address regional disparities in England. The article below introduces the main themes of the report, and you can read the full report online or as a PDF. Please help us by sharing the report on social media (here on Substack, but also on LinkedIn, Bluesky and Twitter/X). As an aside, we also had an article in Labour List over the weekend, with Transparency International UK, about the urgent need for action to cap political donations.

Almost exactly one year ago, the Government’s English Devolution White Paper affirmed that “we must rewire England and end the hoarding in Whitehall by devolving power and money”.

This was a welcome recognition that Britain can’t build a fairer economy while too many powers are held in Westminster. Since then, it has been accompanied by landmark legislation to create a new architecture of devolution across the country.

The Chancellor’s Budget almost two weeks ago included the devolution of powers to create a visitor levy in many English regions for the first time, a move which was widely praised by the country’s Mayors, with the Mayor of York and North Yorkshire David Skaith describing it as a “total gamechanger”.

The announcement in the Budget of the consolidation of more than thirty central government funding streams will also give regions more flexibility and autonomy to spend according to their priorities.

Yet even with these incremental powers, the UK will remain the most centralised economy in the developed world.

While a small levy on overnight stays is welcome, the truth is that such a move only scratches the surface of the changes that are needed to fundamentally rewire the state in the interests of local places.

As it is, the UK collects just 5% of its tax revenue at the local level - around one-third less than France and one-sixth less than Germany.

No other major economy in the developed world concentrates so much fiscal power in its central government. Despite this, the Government’s flagship English Devolution & Community Empowerment Bill, which recently passed its third reading in the House of Commons, largely avoids the issue altogether.

This extreme hyper-centralisation has severe consequences, contributing to deep regional inequalities that concentrate wealth in some parts of the country while leaving others struggling to keep up, and limiting opportunities for local economic growth.

These inequalities are stark: a £10,000 gap in disposable income between the richest and poorest areas, an 18-year difference in healthy life expectancies between the most and least deprived areas, and widening wealth divides between regions, with the North of England home to 30% of the nation’s population but only 20% of the nation’s wealth.

Our polling shows that 60% of the public identify regional disparities as one of the inequalities that concern them most, second only to class and disability.

Research consistently shows that fiscal devolution leads to more responsive policymaking, with local leadership able to better align public policy with the preferences of local places, improving the ability of regions to innovate more readily. Better policymaking could help to boost socio-economic outcomes, improving regional inequalities.

Fiscal decentralisation can also boost regional growth. OECD evidence indicates that, when properly designed, doubling the share of tax or spending controlled sub-nationally is associated with a 3% increase in GDP per capita. In other words, empowering local leaders can make economies both fairer and more productive.

So it stands to reason that bold action on fiscal devolution could help to address the UK’s entrenched inequalities between places.

In our paper published today, A Fair Share, we examine how a long-term approach to fiscal devolution could help to reduce those disparities, and expand opportunities for everyone.

We first outline the steps that could build capacity needed for deeper reforms, both in Whitehall and in local areas.

Those measures include learning more effectively from existing devolution arrangements through new collaboration. When considering international experience of extensive devolution, examples such as Germany or Australia are often cited.

Yet the experiences of each of the four nations of the UK offer 25 years of practical lessons on working with Treasury orthodoxy, navigating relationships with central government and innovating within smaller jurisdictions. The recently created Council of Nations and Regions could accelerate this learning by convening a cross-government subgroup focused specifically on fiscal devolution.

At the same time, Whitehall must strengthen its understanding of devolved governance by ensuring that civil servants are fully equipped with the knowledge and skills needed to navigate the implications of central policy on devolved jurisdictions. Local authorities also need support to map existing gaps in their fiscal powers and identify capacity challenges, a task that MHCLG could lead by working more deliberately with local government on preparing for future fiscal devolution.

These steps would help build the foundations for more ambitious reforms in future years, strengthening both local and central government’s ability to manage fiscal devolution effectively.

More broadly, the UK needs to think long-term about the direction of devolution. Do we want another decade of incremental and piecemeal change, or a deliberate approach guided by a clear vision?

To support this choice, we propose the creation of a Tax Devolution Commission to review the tax code and identify which taxes could sensibly be devolved in the long-term, and which should remain centralised. The Commission could provide an authoritative basis for reform and avoid the cautious incrementalism of previous decades.

To meet the need for longer-term equalisation of living standards between different places, the government should consider the role of legislation in equalising living standards between different regions.

Ultimately, creating a fairer economy requires rewiring the state, embedding a genuine commitment to devolve meaningful power and fiscal control to local places. The Government must build on the momentum created by the Devolution & Community Empowerment Bill to seize the opportunity presented by this Parliament and make real progress.

More than a decade ago, the Communities and Local Government Committee concluded in a report that “fiscal devolution in England is an idea whose time has come”. Despite some progress since the publication of that report in 2014, the UK remains profoundly centralised, and the Treasury continues to hold a tight grip over the national finances.

In an interview for this report, Nicola Sturgeon commented about intergovernmental arrangements that “the formal arrangements are there; whether or not these get utilised is entirely down to mindsets, personalities and relationships.”

The same holds true for fiscal devolution: progress will require political will. It is long past time for the Government to choose between maintaining a highly centralised state or building a fairer, more equal country where every place has a genuine share in national prosperity.

Read our report on fiscal devolution