Soaring inequality in UK ‘contributed to Brexit’, Oxfam says

Richest one per cent in UK own 20 times more total wealth than the poorest fifth

David Hughes
Tuesday 13 September 2016 17:29 BST
A man walks past a Porsche in Aberdare, 2016. West Wales and the Valleys has been identified as the poorest region in the whole of north Western Europe
A man walks past a Porsche in Aberdare, 2016. West Wales and the Valleys has been identified as the poorest region in the whole of north Western Europe (Getty)

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The richest one per cent of the UK population now owns more than 20 times the total wealth of the poorest fifth, making the country one of the most unequal in the developed world, according to analysis by Oxfam.

The figures suggest that around 634,000 Britons are worth 20 times as much as the poorest 13 million and the charity urged Theresa May to take action to close the gap between the “haves” and the “have nots”.

Oxfam's report suggested that the massive inequality in British society contributed to the vote to leave the European Union and called for sweeping reforms to big business.

The report said: “The UK is one of the most unequal developed countries in the world. Three decades of high-level inequality have had a profound impact, leading many people to believe that they have little stake in society and to feel locked out of politics and economic opportunity.

”Whatever your views on Brexit, the referendum brought divisions within our country to a head, with many people expressing distrust and disconnection with political processes and voting for change in the hope that it would improve their economic position.”

The Oxfam report used data from Credit Suisse which showed the richest 10 per cent of the UK population own over half of the country's total wealth (54 per cent) with the top one per cent owning nearly a quarter (23 per cent), whilst the poorest 20 per cent share just 0.8 per cent of the country's wealth between them.

Fear and Loathing in Great Britain

The paper welcomed the prime minister's recognition of the need to shake-up corporate culture and suggested a four-point action plan for her to adopt.

The measures included delivering on Ms May's pledge to give a greater voice to workers through greater representation on company boards.

Under the plans firms would be given incentives to improve the skills of their workforce - particularly in sectors which employ large numbers of women such as retail, childcare and social care - while the welfare system would be redesigned to encourage claimants to undergo training and education in an effort to increase their wages.

The third element of the plan would see pay ratios adopted to curb excess salaries at the top and tackle low wages at the bottom. Under the proposals, firms should aim to meet a 20:1 ratio so the most highly-paid person at the firm can earn no more than 20 times the salary of the lowest-paid worker.

Finally, Oxfam called for action to tackle corporate tax avoidance and end UK-linked tax havens.

Rachael Orr, head of Oxfam's UK Programme, said: ”Inequality is a massive barrier to tackling poverty and has created an economy that clearly isn't working for everyone. The UK is one of the richest countries in the world, but it's a nation divided into the haves and have-nots.

“Whilst executive pay soars, one in five people live below the poverty line and struggle to pay their bills and put food on the table.”

Stressing the need for corporate reform she said: “Oxfam welcomes the fact Theresa May is embracing this agenda. Addressing the practices of unscrupulous business needs to be a central part of the government's plans to even up the economy.

“That means closing wage gaps, incentivising investment in companies' staff and making sure they pay their fair share of taxes.”

A government spokeswoman said: “Work is the best route out of poverty and since 2010 we've made real progress: 2.7 million more people in our country have a job, we've given a pay rise to a million of the lowest paid with the National Living Wage - and we've overhauled the welfare system so it pays to work rather than claim benefits.

“But there is still much more to do, not just for those on the margins of society, but for families up and down the country who are just getting by.

“With Theresa May as prime minister, we will do what is needed to keep our economy strong and build a country that works for all of us, not just the privileged few.”

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