Hoovering up the cake
The latest edition of the Sunday Times Rich List raises some uncomfortable questions about how much wealth in the UK is created and how much is simply extracted
So, here we are. The country that birthed the industrial revolution has just spawned a new billionaire. An inventor, a visionary, a creator of new products or services that will change the world? Not quite. The 154th richest person in the country has made his (thousand) millions from government contracts to provide accommodation, food and transport for asylum seekers, according to The Times (paywall). His company has been criticised for housing asylum seekers in “filthy”, “decrepit”, “impoverished” and “run down” conditions.
Judge a country by its economic growth, and you find Britain wanting compared to its peers (with one of the lowest GDP increases in the G7, compared to the pre-pandemic period). Judge it by its level of child poverty, and the same story emerges; UNICEF ranked Britain 37th (i.e. third worst) out of 39 advanced countries based on its recent track record. Judge it by its wealthiest citizens, and what do you see? The latest edition of the annual Sunday Times Rich List (paywall again, sorry) gives us a glimpse behind the curtain. It’s a particularly valuable resource given that the official statistics underestimate the true extent of wealth inequality in the UK.
While the headline finding for the Sunday Times is that “Britain has lost more billionaires over the past 12 months than at any point in its history”, the total wealth of the 350 people in the list is £772.8 billion. Down three per cent year-on-year, admittedly. Still, most people might find their attention drawn less to this minor annual change than to three eye-catching statistics uncovered by Dr Ben Tippet at King’s College London, for the Patriotic Millionaires, from analysis of Sunday Times Rich List data from 1994 to 2025:
Over that period, the wealth of the richest 250 families grew at more than double the rate of the economy as a whole (9.1% per year, compared to 4.3%)
This year’s aggregate figure of £772.8 billion is more than 557% higher in real terms than the combined amount of wealth on the Sunday Times Rich List in 1994
The wealthiest 40 families in the UK today own more wealth than the bottom 50% of the population
Last October, Ben analysed ONS and Sunday Times data for our Wealth Gap Risk Register and found that the absolute gap in wealth between the top 10% and the rest of the UK increased by 50% between 2011 and 2019.
What’s wrong with this level of wealth inequality?
The first problem is that it hasn’t come about fairly. Not everyone in the UK has equal opportunities to accumulate large amounts of wealth. As the authors of the Sunday Times article point out, “the Rich List is full of risk-taking, resilience and reward — along with luck.” Yes! Luck plays a big role, much bigger than most of its beneficiaries care to admit, as we explored in 2024. Nassim Nicholas Taleb argues in Fooled by Randomness that luck plays a much bigger role than merit in influencing who is ‘successful’ and who is not, and that we underestimate the impact of random luck on our lives, preferring to attribute success to skill, talent and hard work and to explain past events in these terms, whereas in fact the biggest driver of success is simply being in the right place at the right time. And one of the most important forms of good luck is being born into a wealthy family that can provide you with opportunities, support and a financial cushion to allow you to take risks and to be entrepreneurial.
In 2023 we carried out some polling on public attitudes to wealth and wealth inequality, and found that most people think that opportunities to make lots of money aren't evenly spread, and that many have achieved their wealth more through luck than by hard work. This view held for most of the seven ‘characters’ that we presented in the survey, each of which had acquired their wealth in different ways; the exception was entrepreneurs (and to some extent landlords, interestingly), who were viewed more favourably by the public.
The second problem with wealth inequality is that it damages our economy, our society, our democracy and our environment - as we explored at length in our Wealth Gap Risk Register, which lists 41 negative ‘spillover effects’ of wealth inequality in the UK.
This problem is particularly acute when wealth is being extracted, rather than created. At their best, well-run capitalist economies are engines of extraordinary value generation. Through innovation, enterprise, and investment, they produce goods and services that improve society. Yet in recent decades, the UK and other advanced economies have seen a troubling shift. Instead of being structured primarily around value creation, economic activity has increasingly gravitated toward wealth extraction - the appropriation of existing value without corresponding productive contribution. Arguably, many of the occupants of the Sunday Times Rich List are engaged more in wealth extraction than in genuine wealth creation. This is not making the cake bigger, but carving out bigger slices for themselves, at the expense of everyone else. Hoovering up the cake, if you will. It’s redistribution, but upwards, in the opposite direction from the tax system. Extraction is the realm of monopolists, speculators, profiteers, rentiers, companies that make profits from poverty, and people who engage in financial engineering to maximise profits, rather than providing genuinely useful products and services.
This drift towards an extractive economy not only erodes the principle of fairness, particularly in terms of the relationship between contribution and reward, but it also constrains genuine economic dynamism. It wastes talent by depriving gifted people of the opportunities to maximise their potential and to become wealth creators themselves, and it squeezes out and disincentivises genuine entrepreneurship. Worse still, widespread and often blatant exploitation by economic elites who can operate on different rules - and influence politics in their own interests - damages social trust and cohesion, and undermines public faith in democratic institutions. An economy that increasingly runs on a zero sum basis feeds a zero sum politics of discord and division, a scarcity mindset that mirrors reality. Our own polling found that even right-leaning voters who are less concerned about wealth inequality in principle are very worried about its impacts on democracy and about tax avoidance by the wealthy.
What to do? In a thought-provoking webinar that we hosted last week, the Chicago-based political scientist David Lay Williams outlined the arguments in his recent book about how, for over two millennia, the West’s greatest minds have sounded the alarm over the corrosive effects of concentrated wealth on societies. From Plato’s warning that inequality creates “two cities — one of the rich, one of the poor, eternally at war” to Adam Smith’s fear that vast income gaps erode mutual sympathy between classes, history’s sharpest thinkers - and not just those on the left - have identified economic disparity as an existential threat to justice, democracy, and human flourishing. Their proposed remedies were striking. Plato suggested imposing a maximum limit on wealth (no citizen in his ideal city could have more than four times the property of the poorest citizen), alongside a minimum level to prevent destitution. Many thinkers advocated progressive taxation on luxuries and inheritances, redistribution of land, and periodic debt forgiveness to mitigate disparities. The biblical Jubilee laws held that every 50 years, all land and property was to be restored to its original owners. Imagine how that idea would go down here.
In our Wealth Gap Risk Register we outlined 29 ways to reduce wealth inequality and its impacts. As we explored in a recent report, we need to find ways to share wealth more broadly at source, as well as redistributing it through taxes (including taxes on wealth). We need to ensure that everyone has some assets, which would enable them to take a risk on starting a business, for example. We also need to build up our shared wealth by improving public services and the social safety net, to ensure that everyone has the start in life to enable them to even consider such a move. This isn’t the politics of envy - it’s the politics of plenty.