Wealth gap grows as the rich speed ahead

Working-class households are being denied a fair share of the national wealth they create, according to TUC analysis of new official data published last week.

Growing gap

In the decade since the first wealth and assets survey (2006/08) the wealthiest households have continued to pull ahead.

From 2006/08 to 2016/18, the combined wealth of the top 10% increased by £2.8 trillion. But the combined wealth of the bottom 10% increased by just £11 billion.

The top 10% of households collectively own 45% of national wealth, while the bottom 50% of households collectively only just 9% of national wealth. That is 5.3 times as much – up from 4.6 times as much in 2006/08.

The bottom 10% of households are a very long way behind, collectively owning just 0.1% of national wealth.

Rigged economy

The TUC says that the distribution of wealth does not reflect the hard graft of working Britain. And it highlights how hard it is for working households to make savings.

Despite ten consecutive years of economic growth, the average weekly wage is still worth £14 less than a decade ago. And tax credits for working families have been cut.

With their finances so tight, instead of building up savings and assets millions of working households are getting deeper into debt. Average unsecured debt per household is at a record high of £14,200.

The TUC says that government policy has failed to tackle an economy that favours those who are already wealthy. TUC research earlier this month showed that from 2014 to 2018 FTSE100 returns to shareholders rose by 56%, while wages increased just 8.8%.

Action needed

To reduce the wealth gap, the TUC is calling on all the parties to commit to the following polices:

• Boost wages: Raise the minimum wage to £10 immediately and increase collective bargaining rights.
• Improve pension savings: Auto-enrolment should be extended to all low-paid workers and a pathway must be set out to increase minimum contributions.
• Elect worker directors onto company boards: Worker directors are the norm in most of Europe. And they help ensure a fairer distribution of rewards between workers and shareholders.
• Rule out tax cuts for high earners: Rebuilding public services is more important. This will stop families having to run down savings to pay privately for services like social care.

TUC General Secretary Frances O’Grady said: “Everyone should have the chance to save for their family and the future. But working people aren’t getting a fair share of the wealth they create.

“Britain has enough wealth to fund our schools and hospitals and give everyone decent wages. But instead a rich elite are taking more than they earn.

“It is only those who are already incredibly wealthy who don’t have to earn and can make money from money. And that’s at the heart of this growing inequality.

“We can’t go on with politicians who only look after their rich mates. We need people in parliament who will put working class families first.

“Let’s use our votes to fix Britain and make it fair again – for everyone.”