Good afternoon from New Economy Brief.
The Sunday Times has been publishing its “Rich List” for almost 40 years, tracking the wealth of the richest people and families in Britain.
This week’s New Economy Brief unpacks what the latest Rich List tells us about wealth in Britain today, and looks at how we can tackle excess wealth and inequality.
The rich are getting richer
What cost of living crisis? 2026’s edition of the annual Sunday Times Rich List shows just how much of Britain’s wealth is held in the hands of a tiny minority of people. In fact, just 350 individuals and families own wealth totalling £784 billion, up 1.4% from last year.
£784 billion is an almost incomprehensible amount of money to most people. It’s larger than the annual GDP of Belgium, three times larger than the UK’s entire annual healthcare budget, or around eight times greater than all government spending on education.
You’re having a half. Clearly, this is a lot of wealth. Research from the Equality Trust on this year’s list found that the richest 50 families have accumulated more than the bottom half of the entire country – 34 million people – painting a stark picture of a deeply unequal country.
Patriotic Millionaires UK, an organisation of millionaires who advocate for higher taxes on wealth, regularly comments on the Rich List. One member, Phil White, said “Right now, it feels like the Rich List is a running total of everything that is wrong in our society—a handful of people counting obscene amounts of wealth while everyone else scrapes by…Rich people like me, and those on the Rich List, should be paying more tax…”
Missing in taxation. But despite that call, there’s a staggering lack of crossover between the Rich List and the ‘Tax List’, also published by the Sunday Times, which shows the country’s top taxpayers. In fact, fewer than a handful of names make the top 100 of both lists. There are some clear reasons for this, such as the choice of country of domicile for tax purposes. And then there are others who, whether or not they reside in the UK, hold their wealth in overseas businesses and interests that don’t pay UK taxes. There’s also the fact that wealth, and the income it produces, is taxed at far lower rates in Britain than income from work.
Patriotic Millionaires and Tax Justice UK have outlined a policy platform that raises taxes on income from wealth to match those on income from work. Both organisations, alongside a growing number of civil society organisations, unions, economists and politicians, also advocate for an annual wealth tax. One popular proposal is a 2% wealth tax on assets over £10 million, which campaigners say would raise around £24 billion a year from the country’s 22,000 richest people.
The consequences of inequality
The ghost of GDP past. Among the Rich List’s 350 people and families are 157 billionaires. When the List was first published in 1989, the Equality Trust calculated that its 15 billionaires held about £27bn in wealth, equivalent to 4p in every £1 of GDP at the time. Today, the 157 billionaires on the list hold just under £670bn, equivalent to 22p in every £1 of GDP. It’s one of the reasons why the economy doesn’t feel like it’s working for most people – especially alongside the stagnant wage growth UK workers have experienced since the 2008 Global Financial Crisis.
And while those at the very top are still enjoying a bonanza of accumulation, millions of people are struggling with an affordability crisis on multiple fronts. Energy costs are 35% higher than they were before the Russian invasion of Ukraine in early 2022. So it’s no surprise that the cost of living was a top concern for 90% of respondents to a survey commissioned by PwC last week. Yet analysis from Share the Wealth found that a 2% wealth tax on just the UK’s 15 richest families could raise enough revenue to cut household energy bills by an average of £150 a year.
Wealth inequality is increasingly being understood as bad for economic growth. In the last 20 years, inequality in OECD countries has risen by an average of 3 Gini points (a measure of economic inequality across a population) – and this has cost them an estimated 8.5% of GDP.
Furthermore, researchers analysing wealth inequality data from the World Inequality Database found a negative and statistically significant relationship between wealth inequality and economic growth.
Fixing our tax system
Same pound, same value. As we explored last week, Starmer and Reeves’s economic approach is under huge scrutiny after a devastating set of local election results, with backbench Labour MPs lining up to set out alternatives. The Labour Growth Group proposes making Capital Gains Tax (CGT) rates the same as income tax bands. It has also suggested removing some CGT loopholes. The report also makes the case for using the proceeds to cut workers’ National Insurance Contributions by up to 2p to shift the onus of tax contributions toward the wealthiest.
Keys, Passport, Tax Bill. The Labour Tribune group also set out their taxation vision last week. Noah Law, MP for St Austell and Newquay, writes that “any tax on wealth must be levied in a manner that is efficient, pro-growth, and most importantly achievable, bearing in mind that the means to identify and value assets – and actually collect wealth taxes – are substantially underdeveloped.” From this, a proposal for properly equipping the tax authority with the resources it needs to assess and tax wealth emerges. The law also calls for an ‘exit tax’ to ensure that wealthy people choosing to leave the UK pay their fair share of tax on their way out.
Open goal. Recent polling of millionaires found that 75% would be willing to pay more tax in order to help protect and strengthen the social, cultural and economic foundations they value in Britain. At the same time 55% support taxing wealth the same as work, and 59% support a “settling-up fee” for people who use the UK’s infrastructure and services to build personal wealth before leaving the country.
Looking forward…
The Rich List exposes the UK’s inequality problem – one brought into even sharper relief by a deep and enduring cost of living crisis. And increasingly millions of people who are struggling to get by believe – with good reason – that the economy is rigged in favour of the wealthy and powerful.
This sense of unfairness, and the lack of answers from successive governments, is a powerful current that both the Green Party and Reform UK have tapped into through very different political visions. Recent interventions from the Labour Growth Group and Tribune show that parts of the Labour Party are grappling with this too.
Whoever is Prime Minister in a few months’ time will need to reckon with the same reality: voters increasingly feel the economy no longer works for them, and demand a credible plan to change it.
Landlords for rent caps? The Joseph Rowntree Foundation explores how rent controls, alongside tax reform measures, can make life better for renters while also limiting risk to the housing market. The authors of a new report on the issue propose reducing rents by as much as £1200 a year, while protecting landlords from losing money on their investments by reinstating mortgage interest relief and applying National Insurance Contributions to rental income.
The rent's too high. The New Economics Foundation has published a new working paper on making private renting affordable. The report analyses the affordability crisis in the private rented sector, including its causes – from policy failures to the wave of easy credit that rapidly expanded the buy-to-let sector. To tackle the issue, emergency affordability measures are proposed, alongside a series of steps to create a system of fair rents.
Governing in the public interest. Eminent economist Mariana Mazzucato explores the government’s recent decision to take British Steel under public ownership in a recent substack post. Mazzucato argues that the debate is “missing the point”, by focusing on privatisation and nationalisation. Instead, she thinks the discussion should centre on whether the state can govern in the public interest, for the common good, and on the need for a vision for the wider steel sector.
Curbing wealth extraction. The Fairness Foundation argues, in its latest report, that Britain’s economy is increasingly rewarding wealth extraction rather than ‘real’ contributions. This means those at the very top enrich themselves while workers continue to struggle. To combat this, the report proposes action to curb wealth extraction and encourage wealth creation to build a fairer economic system.
Not enough pay, too many jobs. The Women’s Budget Group’s latest research shows that young women in the UK are increasingly likely to juggle multiple jobs in order to secure enough income and working hours. They are forced to do this by precarious employment taking up their leisure time, harming their mental wellbeing and damaging their long-term economic futures. Labour market statistics undercount those with more than one job, so policymakers still don’t appreciate how widespread and severe the problem is.
