The media is pretending all is well upon the release of the Sunday Times Rich List. But the ‘billionaire boom’ is nothing short of a scandal for Theresa May.
May’s election campaign is centred on delivering Brexit for all British people. Yet the UK’s richest 1,000 families have increased their wealth by 14% (£83bn) since last year. For nearly everyone else, who isn’t in the 0.0015% who now own £658bn, it’s not quite so peachy. This Christmas, living standards for the majority of people will plummet by more than at any point since WWII.
But we’re not seeing any media outrage at this soaring level of inequality, intensified by May’s Brexit. Instead, it is focused on issues such as getting wound up at Labour’s Shadow Home Secretary misspeaking in an interview.
Brexit (for the richest)
The downfall of the pound since the EU referendum delivered mixed results depending on whether you’re a rich shareholder or an ordinary person. If you are part of Indian billionaire Lakshmi Mittal’s family, for example, the devaluation is improving your UK living standards. Mittal’s family live in London but make much of their profit [paywall] abroad through a global steel empire. So a cheaper pound means the family’s foreign income is worth a lot more within the UK. Mittal’s family has increased its wealth by over £6.1bn [paywall] in only the past year.
In short, May’s Brexit is brilliant, in pound terms, if you have shares abroad but live in Britain. Since the EU referendum, wealthy UK residents with huge shares in foreign mines have been the biggest winners overall. Russian billionaire Alisher Usmanov’s wealth has increased by over £4.2bn [paywall] in the past year. He is the majority shareholder in USM Holdings, an empire with global investments in the steel and mining industry.
The “man who bought Brexit”, millionaire Arron Banks, also owns five diamond mines in South Africa. The Bristol-based UKIP donor may have benefited a lot from the vote to leave the EU. Perhaps the total £8.1m [paywall] he loaned and donated to the leave campaign was some kind of investment.
Brexit (for ordinary people)
The devaluation of the pound isn’t quite so good for the rest of us. In fact, we are facing the biggest fall in our standard of living since WWII.
This is because of the relationship between stagnating wages and inflation. The Office for Budget Responsibility (OBR) project Retail Price Index (RPI) inflation, the cost of goods and services we all buy, will rise to 4.1% in the final quarter of the 2017 financial year. So the cost of living will greatly increase. Meanwhile, a report from the Bank of England shows that nominal wage growth will actually fall in response to higher inflation, not increase. Coupled together, and we have a record-breaking fall in our standard of living.
Primarily, the downfall of the pound since the EU referendum is responsible for increasing inflation. A depreciating pound raises the price of imports. This will especially hit the UK, which gets more than half of its food and feed from abroad, for example.
Inequality in our society has been skyrocketing in the longer term, because of the economic orthodoxy of privatisation, deregulated financial markets and decreased public spending. The economic programme of the Conservatives combined with their billionaire’s Brexit is transferring untold wealth from the already struggling to the already rich. Now Britain’s richest 1,000 families are well on their way to tripling their wealth since the financial crisis, while austerity bites the rest of us. Since 2009, the top 1,000 families have increased their fortune by over 155%.
Any UK-wide growth the Conservatives trumpet is demonstrably misleading. Our national growth has been inflated by London and the South East. They are the only two regions that are better off today than in 2007. Nowhere else is experiencing a recovery and some other regions are in a depression:
In turn, the growth of London has been inflated by the billionaires paraded in The Sunday Times Rich List. It’s no longer our GDP, but the GDP of the 0.1%.
On a global scale, the grotesque level of inequality is even worse. In January, Oxfam revealed that eight billionaires now own between them the same wealth as half the world.
The Prime Minister’s election campaign is all about Brexit. But the Brexit May is delivering brings more wealth to the billionaires. Meanwhile, the rest of us are about to undergo a record-breaking drop in our standard of living. Why would we continue to vote for an economic programme that is quite clearly rigged against us?
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– Also read more Canary articles on the 2017 general election.
Featured image via Flickr
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