A wealth of evidence
Our updated Wealth Gap Risk Register shows that the increasing wealth divide in Britain is wreaking ever more havoc on our economy, society and democracy, but also sets out what can be done about it
We’ve just launched an updated version of our Wealth Gap Risk Register, which was originally published in October 2024. The bad news is that the new version contains even more negative impacts of wealth inequality - 49 in total, up from 41. The good news is that it also details more things we can do about them, with 33 policy solutions listed, up from 29. Many of the existing impacts and solutions have been updated with the latest evidence from both the ivory towers of academia and the windowless offices of think tank world. You can browse the register online or read it as a PDF, but the online version is more fun, with searchable tables and interactive matrices and graphs.
The icing on the cake is that we’ve also updated our headline figures on the size of the wealth gap itself. Analysing the latest ONS wealth data in conjunction with the Sunday Times Rich List, Dr Ben Tippet finds that the gap in total wealth between the top 10% and the bottom 10% in the UK increased by 54% between 2011 and 2021, from £7.5 trillion to £11.5 trillion.
We hope that you find the updated Wealth Gap Risk Register a useful resource. It’s intended to be something that researchers, policy people, advocates and campaigners can use to explore the impacts of wealth inequality and the solutions to it, and to make the case to policymakers and those who influence them that it’s beyond time for us to tackle wealth inequality. We believe that the evidence set out in this report clearly demonstrates that wealth inequality is not just a moral scourge, but poses a strategic risk to the UK. It is already damaging our society, our economy, our democracy and our environment, and is set to become even more harmful over the coming years as the size of the wealth gap grows and its impacts snowball.
Please share on LinkedIn, Bluesky or Twitter/X, and let us know if you have any comments or questions about the register, either by email or using our online form. Thank you!
For a quick tour of the key findings, have a look at the article below, which was originally published in Labour List. The report was also covered in The Mirror.
Britain’s wealth gap is growing - the Chancellor must address it
Earlier this month, the Chancellor accepted the pressing need to tax wealth when she said that taxing higher earners will be “part of the story” as she presents her Budget next month. Her clear admission of the need for fairness in the tax system was no doubt warmly welcomed by Labour members, particularly given the results of a recent Labour List poll which found that a wealth tax is the most popular progressive policy among the Party faithful.
However, while the Chancellor’s welcome focus on increasing taxes on wealth is driven by the need to raise revenues, the truth is that this is only one reason to grasp the nettle. Our tax system is in dire need of reform. The silver lining to this grim status quo is that there is plenty of scope to reform taxes on wealth in ways that can raise substantial revenues at the same time as making the system fairer, tackling wealth inequality and boosting economic growth. There’s plenty of low-hanging fruit to scoop up before any talk of trade-offs comes into play, as we at the Fairness Foundation set out in a recent report on taxing wealth, Win-Win-Win.
When it comes to wealth inequality, there is no time to waste. Today we have released new research as part of our updated Wealth Gap Risk Register, showing that the absolute gap in total wealth between the richest 10% and the poorest 10% in the UK grew by 54% between 2011 and 2021, from £7.5 trillion to £11.5 trillion. This new analysis is based on the latest ONS data combined with evidence from the Sunday Times Rich List.
Over 50% of the increase in wealth that widened the wealth gap over this period was unearned, caused by rising asset values. The gulf between those with assets and those without continues to widen in cash terms, preventing the 50% of the population who do not own assets from building up wealth.
The practical consequences of this divide stretch far beyond the moral case for equality of opportunity. Our updated report identifies 49 impacts of the wealth gap in the UK, showing its wide-ranging negative impacts on almost every aspect of our society and economy.
Wealth inequality is not a necessary by-product of a prosperous economy. Quite the opposite – it stifles economic growth by reducing consumer demand, blocking opportunity and wasting talent, harming productivity, tilting incentives away from productive enterprise towards rent extraction, skewing investment priorities, and undermining genuine wealth creation and healthy competition. There is no longer any doubt that wealth inequality is damaging social cohesion, eroding trust in our democracy, and undermining efforts to address environmental challenges.
The message is clear: Britain’s unsustainable levels of wealth inequality are not merely a moral hazard, but instead represent a strategic risk to almost every facet of our national life. Taxing wealth properly would represent a crucial first step towards tackling this problem. Reforms to taxes on wealth feature prominently among the set of 33 solutions that we present in the Wealth Gap Risk Register to address this corrosive wealth inequality. These proposals build on the research undertaken by organisations such as the Resolution Foundation, Demos and others, including reforms to capital gains tax and extending national insurance contributions to cover partnership income and rental income. There is a clear set of straightforward measures for the Chancellor to choose from, and she is right to say that claims of a resultant mass exodus of the wealthy amount to little more than “scaremongering”.
However, redistributing wealth is only part of the picture. Government must also do more to share wealth more broadly in the first place, including by ensuring that a higher proportion of company profits go to workers, and to reduce the impact of wealth inequality on people’s lives. Building up public services and reducing the costs of essentials – including in areas such as childcare – reduces people’s dependence on private wealth, as do bold reforms to our broken housing market. Action is also needed to weaken the iron grip of wealthy vested interests on political decision-making, which so often blocks or undermines necessary reform.
Wealth inequality is set to continue to grow over the coming decades, turbocharged by the ‘great wealth transfer’ as inheritances are handed down very unequally by the baby boomers, and no doubt exacerbated by the unpredictable consequences of the AI revolution. Its negative spillover impacts on our society, economy, democracy and environment will snowball.
The time for bold action is now. In November’s Budget, the Chancellor has the opportunity to fire the starting gun on change, and to put the country on notice that the government will be taking the steps that are needed to mitigate the risks that wealth inequality poses to the nation. Such a programme would help to tell a better, more deeply felt story about a fairer Britain and about a government that is genuinely committed to acting in the interests of all of its citizens.