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The Elite London, described as the city’s “most exclusive jet-set lifestyle event”, filled Wycombe Air Park with row after row of gleaming private jets, seaplanes, hovercrafts (with one for kids), helicopters, and supercars either the size of tanks, or flat on the ground like giant skateboards.
In hangar after hangar, the wares on sale last weekend were designed and priced for the super-rich, though possibly not quite for the cadres in this year’s Sunday Times rich list, which bills itself as “a celebration of aspiration”. A “truly bespoke” £30,000 safe had six permanently revolving wheels that keep your watches synchronised; they recently sold one to protect a household’s £1.3m collection of watches. A writing service offered an illustrated memoir of your life’s successes for £28,000. A monster Land Rover Defender, with its boot open to display champagne and a magnificent picnic basket, promoted educational advice: “Opening the door to the best boarding schools and universities.”
A man who had been discussing a plane with a salesman might have been seriously rich or just a plane-spotter in a panama hat, but I asked him if this flamboyant parade of wealth might be at all embarrassing in a cost of living crisis, when so many hardworking people (always use that phrase) struggle to put food on the table for their children. Did he, perhaps, agree that people who can afford all this should pay a bit more tax? “Why would I?” Well, look at the state of the country, a collapsing NHS, crumbling schools – or potholes that might damage your Bentley? “Look, take any more in tax and the wealthy would be off! [Flying] away out of here in one of these!” He waved at the array of lustrous aircraft.
But would they, really? A telling study of HMRC records showed what happened in 2017, when reform to taxes on super-rich non-doms lost some of them significant sums: just 6% fled. Researchers have also found that abolishing non-dom status could raise £3.8bn. Those who left were the ones paying the least tax in the first place, so the tax loss from this was tiny. If hardly any non-doms with foreign connections leave, the rest of the rich are even less likely to flee tax rises. Remember Guy Hands, the founder of Terra Firma private equity, who bolted to Guernsey and its 20% flat tax rate in 2009 to avoid Labour’s top tax rise: “For me it was a disaster,” he wrote last year. “I lost the flow of the market.”
The rich got a lot richer recently, with average pre-tax company profit margins up 30% from pre-Covid figures, according to Unite’s research into nearly 17,000 companies. Real wages, meanwhile, have flatlined since 2008, despite a slight recent blip upwards. Every little helps, no doubt, with the recent news that the pay and perks of Tesco’s CEO rose to £9.9m last year. With food prices up 24% since 2022, that particular greediness rang out with real political resonance.
The rich list laments that Britain’s “billionaire boom has come to an end”, but there are only six fewer than last year. Robert Palmer of Tax Justice UK points out that, pre-Covid, there were 147 in 2020, which rose to 177 in 2022’s rich list. The public have noticed: before the pandemic, they considered national governments as having the most power in our society, but in 2023 King’s College London’s Policy Institute found they think the super-rich 1% have more power than government. That cynicism about who controls the country shows how inequality undermines democracy itself, reports the LSE’s Why Wealth Inequality Matters. Last week, polling for Tax Justice UK found that about two-thirds of voters were more likely to vote for a party willing to raise taxes on the rich.
Covid marked a social-democratic turning point in British attitudes, as it pumped up the wealth of the rich while pounding the rest. It reminded people that only the state, collecting taxes, can protect us in emergencies, staving off economic disaster by supporting families and companies. Only the state could cushion us against shock energy bills, still about 59% higher than in the winter of 2021 and 2022. Britain is the worst for homelessness in the developed world, according to the FT’s number-cruncher John Burn Murdoch, partly because it is building fewer homes than most other developed countries. That is just one state failure among many. People want more state action, not less.
There were only 29 rich-list billionaires in 2010 when Labour left office. Labour’s task to create and distribute wealth will be much harder now than it was in the 90s, but every Labour government has left the poor better off and public services improved. Keir Starmer and Rachel Reeves can see as well as everyone else the vast riches swashing around in Britain, while a third of children go poor and hungry. The archbishop of Canterbury joins Gordon Brown in calling to end the two-child benefit cap, the great motor for child poverty – spending £2.5bn to abolish it would lift half a million children out of poverty. My guess is Labour will announce this before the election – something that was hinted at this weekend, when the shadow health secretary, Wes Streeting, said he didn’t like the cap and Labour would return to its target of eradicating child poverty.
Reeves should be able to find that £2.5bn easily now she has created a tax avoidance advisory committee with James Murray, the shadow financial secretary, Edward Troup, the ex-head of HMRC, and Margaret Hodge, scourge of avoiders – they are tasked with closing the £36bn gap between taxes owed and taxes paid. Once into the territory of avoidance, off-shoring and tax reliefs, Hodge has told parliament she could recoup £100bn in missing tax.
The rich list is always morbidly fascinating, a yearly reminder of Britain’s grotesque inequalities. To have a prime minister in the list whose fortune, with his wife, rose by £120m in a hardship year is another hole in the Tories’ sinking ship. This might not matter if he decided to champion the have-nots. Instead, Sunak pledged yet more cuts to benefits, claiming they had become a “lifestyle choice” for some. Expect Labour’s lifestyle choice to be clipping benefits for the rich and raising those of the poor.
