Surprise, surprise – the rich are still getting richer as the poor get poorer!
We regularly report on published reports from various bodies that show the (almost) incredible rise in the share of wealth and debt of different classes, regional areas and countries within this world in order to try to open the eyes of workers to the reality of capitalism and imperialist exploitation.
In 2006 The Wealth and Assets Survey (WAS) was launched by the Office for National Statistics (ONS) as a biennial survey and the latest covering 2016 – 2018 has just been released. The sample used is from Great Britain only and is taken from a comparison of approximately 30,000 households. Since its launch, as you would expect, the survey has shown an ever widening gap between the richest and the poorest in Britain with those in between going at a slower speed in whichever point they are nearest with the middle point being almost stagnant or slipping very slowly back towards the poorest. As with all things there are exceptions to this general trend: a big lottery winner from the poorest section may be shot forward towards the middle or beyond at a rapid speed while a millionaire may lose their wealth instantly from a blip on the stock exchange or a business failure, but generally speaking, the trends mentioned above are accurate.
Wealth inequality (the process of the extreme points of rich and poor moving away from each other) has increased since the survey started in 2006 as the burden of debt has fallen hardest on the poor. The total across-the-board household debt in Great Britain was £1.28 trillion in April 2016 to March 2018, of which £119 billion (9%) was financial debt and £1.16 trillion (91%) was property debt (mortgages and equity release). The vast majority of the financial debt is due to hire purchase (HP) including credit and store cards (up by £6 billion) and student loans (up by 7 billion). This £119 billion of financial debt is mostly found in the poorer half of the spectrum while the £1.16 trillion in in property debt is to be found along the entire spectrum.
By and large, the rich don’t use HP to buy clothing, furnishings etc as it costs so much that way and they can afford to buy without it. The poor however, don’t have the luxury usually of large quantities of money in the bank and have to go to HP methods of payment for household goods and in some cases even clothing etc., which spreads their payments over a longer period making them seem lower each month but often ends up with the buyer paying 2 or 3 times more than the original price. The richer end of the top 50% tend not to need student loans either.
Where all tend to use borrowing from banks is in the purchase of property etc. For the poor it may be to purchase a small house although for most of the poorest rented property is the only option, so most home mortgages gather around the middle of the spectrum, while for the extreme rich it can be a grand home or homes, business properties and bank loans to keep businesses going. These are subject to tax relief (especially the bigger ones) making this type of loan very interesting to the rich whose wealth is rarely sitting in bank accounts doing nothing.
During the period from April 2016 to March 2018, total debt was three times larger than total wealth for those in the lowest 1/8 of the wealth spectrum while total wealth was larger than total debt in differing degrees along the upper half.
4% of households in that two-year frame were identified by the survey as having ‘problem debt’ and these households in ‘problem debt’ were more likely to rent their home (66% renting compared with 34% for all households) and have an unemployed household head (6% compared with 1% overall).
During the period April 2016 to March 2018, of all the households experiencing ‘property debt’, 7% considered their property debt to be a “heavy burden” and 30% considered it to be “somewhat of a burden”. As the WAS survey only displays ‘property debt’ burden for households that are not in arrears for their mortgage it has to be said that the percentages of both these groups would be very much higher if those in arrears were shown.
The richest 10% of households own 44.6% of private wealth, while the poorest 30% have less than 2%. The poorest 1/10 have £18 billion of non-property debt (credit cards, overdrafts and HP etc) while the richest 1/10 only have £11 billion.
The WAS survey does have limits as it tries to measure a household’s wealth and debt without measuring income, unemployment and any regional pricing but it is still a strong indicator of class Britain.
Household wealth alters according to the class of the households in question so areas that have extremely large amounts of working-class people and high unemployment such as the North East and the East Midlands show that their combined wealth is below the levels that they were in 2006-08. Other areas, such as London, which other reports have shown us include the wealthiest and the poorest, are distorted because the average comes out quite high. The same is true to a lesser extent of the South East where higher than average numbers of extremely wealthy and even a large group of not rich but financially comfortable rub shoulders with some very poverty stricken people.
Torsten Bell, The Director of the Resolution Foundation said of the latest WAS survey; “You can thank lower home ownership [for] the trend of housing wealth becoming more unequal,” adding; “The latest ONS data shows that the UK’s wealth is both huge and hugely unequal. . “Forget which party is promising you a tax cut [or] extra teachers today . . . this long-term trend of wealth rising faster than incomes is reshaping Britain.”
While the executive director of Tax Justice UK, a research and campaign group, Robert Palmer, said; “Wealth inequality has increased over the last decade. This has real world consequences. Access to wealth gives you more life opportunities and better health.”
We, on the other hand, must never tire of telling people that the political system that we live in (capitalist imperialism) is the cause not only of the fabulous wealth of a tiny handful of leeches who live off of the exploitation and destitution of the many with all the evils and miseries that brings us and our children but is the cause of the misery, exploitation, ill health etc that we experience to a greater degree year upon year. Only revolution and replacing this archaic system with a sensible socialist system geared to an eventual world of communist peace and plenty can provide the solution.