What a wonderful time to be rich in Britain! Another 5 per cent has been added to the fortunes of our wealthiest people; last year, their combined worth surged by a fifth and, in 2010, a record 30 per cent was added to their wealth.
At a cool £414bn, the uber-rich are now better off than they were before Lehman Brothers went belly-up. No wonder, then, that market researchers at Ledbury Research project that spending on luxury goods such as expensive jewellery, flash cars and fine wine will soar from £6.5bn last year to £9.4bn by 2015. Recession? What recession?
Of course, it remains a very serious crisis for the real wealth-creators: and by that, I don't mean those who shuffle money around for a living, but the workers who keep our country ticking on a daily basis. Thousands of predominantly low-paid workers are being thrown out of their homes because of housing benefit cuts; nurses, teachers and bin-collectors face an average real-terms pay cut of 16 per cent by the time of the next election; and our poorest sixth-form students have had their educational maintenance allowance confiscated. JCB's owner Sir Anthony Bamford may have enjoyed a leap in wealth from £1,500m to £3,150m, but the average Briton faces the biggest slide in living standards since the early 1920s.
Boom time for the wealthy; crisis for everybody else. How are they getting away with it? The simple answer is because they can. Trade unions provide a means of securing for working people more of the wealth sloshing around. But they were battered in the 1980s, and their membership is nearly half of what it was in 1979. As their power has declined, the share of our national income going to the wealthiest 1 per cent has gone from 6 per cent in the late 1970s to over 14 per cent today.
It is said that clawing back wealth – for example, with higher taxes – is a recipe for ruin. There has been no satisfactory answer for why, then, Britain experienced its best ever sustained growth in the initial decades after World War Two, with no major recession, despite high taxes on the rich, strong unions and large-scale state intervention.
In the absence of major challenges to their position, the wealthiest can sit out a major economic crisis, leaving it to everybody else to pay for it. It is unjust – but it is not inevitable.