Never a day goes by, or so it seems, without mention of the cost of living crisis and programmes on the television helping people to make their money go further. And yet according to the new Forbes billionaire list Elon Musk added $373.5billion dollars (or £373.5billion) to his fortune in just one year. That is £3.5bn more than the £370bn it was estimated the entire COVID pandemic cost the UK. And according to the Equality Trust, this is the biggest ever increase in one year with Elon Musk’s total worth now the 22nd largest economy in the world, beating Belgium.
According to Oxfam global billionaire wealth increased by £1.5 trillion in 2024. In contrast according to the Office of National Statistics the median household income in the UK for the year ending 2023 was £34,500. This was a 2.5% decrease on the previous year
Widening income inequality and increasing poverty are the great social evils of our time and the root cause of so many of today’s problems. It will, therefore, be very difficult for the Government to achieve its objectives whilst operating within the present system and abiding by the rules when it is the system itself which needs changing.
Unless Government addresses pay differentials, bonuses and excessive profits within the larger corporations, utilities and banks, chasing inward investment in search of growth will make the rich richer and create low paid jobs for the masses as it has for at least 40 years. There needs to be a fairer distribution of income within organisations so that everyone gets a fair and proportionate return for their hard work. Extensive studies by the Equality Trust have found that people are becoming increasingly aware that the economy is a human-made system that can be changed,
In April 2024 there were 4.5m children being brought up in poverty, 70% of whom had a parent in work. Although the removal of the two child cap on child benefit will help it should never have been imposed in the first place as it is a child and not a parent benefit. And although the provision of free school meals is to be welcomed this will not reduce child poverty. The definition of poverty is an income of less than 60% of median household income. Free school meals are not an income which is available if the child is off school.
There was recently a petition on the Number 10 website calling upon the Government to raise the personal tax free personal allowance from the current £12,570 to £20,000 per year. Although this would help a great number of people it would be a short-term quick fix. How much better to fix it at 60% of median household income (which according to the ONS would currently be £20,700) so that it automatically increases each year and no one living in poverty ever has to pay income tax again.
According to HMRC there were 29,000 people being paid over £1m per year in the UK in 2023 /24 and yet the top 45% income tax threshold (and loss of personal allowance) cuts in at £125,140. Therefore, there should be room for adjustment (or the introduction of higher tax bands) to make this cost neural in the interest of fairness
The removal of the standing charge from energy bills and spreading it across the unit charge possibly increasing the higher the consumption would also help the lower paid.
Britain has one of the lowest State Pensions in the developed world with 2m older people living in poverty. Many of whom, if they retired before the abolition of the “default retirement age” were forced into retirement and condemned to spending the rest of their lives in poverty. Older people got no benefit from the two pre-election cuts in National Insurance, recently lost their free television licence and some their winter fuel allowance but have to pay more income tax due to the freezing of the tax-free allowance. in consequence after ten years of catching up, due to the “triple lock”, older people have again fallen behind their 2020 comparison with earnings.
Given the wealth of empirical evidence into the social determinants of health which has demonstrated the correlation between low income and health unless Government addresses this widening income inequality the NHS will not keep pace with demand and will always be playing catch up. Governments cannot go on throwing more money at the first aid camp at the bottom of the cliff without building a fence at the top. Treating the symptom not the cause.
Older people account for approximately 70% of the expenditure of the NHS. To raise the State Pension to 60% of median household income to lift all older people out of poverty would improve their quality of life, reduce demand upon the NHS and mean that if they did need long term care applying the same financial assessment which has been in place since the 1948 National assistance Act under CRAG they would be able to pay more reducing the cost to local authorities and mean that their capital and house would no longer need to be taken into account.
For decades we have been hearing about the demographic time bomb labelling older people as a drain on the economy when the majority of volunteers, unpaid carers, trustees and unpaid child minders are older people. Older people paid tax and National Insurance in the belief they would be looked after from cradle to grave, supported their parents and continue to support their children and grand children.
In March 2023 there were 107,317 children in the care of the local authority in the UK – the highest number ever. In December 2023 112,660 homeless households were living in temporary accommodation in England with an estimated 4,266 people sleeping rough. According to the Ministry of Housing and Local Government there were 634,453 empty houses in England in October 2018 with 8.4m people living in single person households.
The NHS and social care are in crisis and in need of radical reform, restructuring and cultural change based upon a whole systems approach to liberate the hardworking professionals from the constraining contract culture into an enabling leadership one. According to a survey by The Times in 2025 there were on average 13,600 people a day in hospital awaiting social care.. Social care needs to move from a “minding” to a “mending” service. Social Work is under-valued and social workers misused.
One cannot resolve whole-systems problems with component level solutions. Perhaps Government could do an income inequality and poverty audit on all it does to ensure it is reducing and not increasing them
* Chris Perry is a former Director of Social Services for South Glamorgan County Council, a former Director of Age Concern Hampshire, a former Non-Executive Director of the Winchester and Eastleigh Healthcare NHS Trust and a former presenter of an award-winning public affairs programme on Express FM.
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24 Comments
Citing the wealth of a CEO American company isn’t going to make diddly squat of difference to someone in the UK topping there electric up from the local corner shop by £10.
“The removal of the standing charge from energy bills and spreading it across the unit charge possibly increasing the higher the consumption would also help the lower paid” That would penalise heavily a family with children already struggling. Across Europe you have stagnating flat lining growth, and February’s borriwing figures painted a very grim picture. Debt interest payments are eye watering. Governments race to net zero is crippling our competitiveness and the added employments costs on top make that elusive increase in growth near impossible. No amount of Robin Hood fantasy politics is ever going to fill that gap.
#Craig Levene. Please explain how renewables, which are by far the cheapest way to produce electricity (ignoring the geopolitics of Trump / Gulf etc) and the move towards Net Zero of which they are in the Vanguard, is crippling our competitiveness.
It seems like the repeat of a reactionary / Right wing attack, which is not only without substance, but factually incorrect.
It is the attempt to continue to rely on fossil fuels and abandon renewables that is the problem, It is not and never will be, the solution.
Excellent article from Chris Perry. Lib Dems do not say or do enough about fighting poverty, unfortunately, or promote the changes needed to achieve it.
So, we define people as ‘living in poverty’ if their incomes are less than 60% of the median income of one of the highest income countries of the world. This is not poverty as is understood the world over, where poverty is struggling to pay for the absolute essentials of life. Therefore, there is a need for more honesty – campaigning to reduce those ‘living in poverty’ is really just a campaign for a more equal distribution of incomes.
My dad used to say that being well-off was not just about what you earned but about what you spent. We seem to have forgotten that.
As an aside, I went shopping yesterday and bought two turnips for 16 pence (8 pence each) and a bag of potatoes for 8 pence at Tesco – an Easter special. I was told that Lidl was selling the same items for 4 pence each. I hope those running food banks were bulk buying so they could give them to those in our society who lacked the 12 pence to buy their own.
Mick; My Grandkids stopped believing in fairytales at around the age of 8/9 – sadly some grown adults do believe that Britain is going to have an economic renaissance on the back of wind and solar is utter claptrap. We are committing economic suicide in this fantasy attempt towards net zero – and it’s those at the bottom who will pay for the price for that illusionary goal.
And yet according to the new Forbes billionaire list Elon Musk added $373.5billion dollars (or £373.5billion) to his fortune in just one year. That is £3.5bn more than the £370bn it was estimated the entire COVID pandemic cost the UK.
This is a false comparison. Mr. Musk’s wealth is almost entirely in his stock (share) holdings – it’s just paper wealth. He famously draws no salary from any of his businesses and none of them pay dividends. He describes himself as “cash poor” and funds his lifestyle from occasional loans taken out against those stock holdings. To buy Twitter he sold some of his Tesla shares, but borrowed most of the money (with X carrying $12.5bn of the debt). By contrast, Covid spending was almost all cash.
Agree with @Chris Perry about the need to deal with poverty, but also with @Joan Summer’s point that 60%-of-median-income is not a sensible definition of poverty. It’s really telling that Chris uses this definition to claim that free school meals ‘will not reduce child poverty‘. Free school meals is of course one of the most effective ways that we can improve wellbeing of children. If our measurement says it doesn’t reduce poverty, then there is something very wrong with our measurement! We do need to think here: Is our purpose to improve people’s quality of life or is our purpose to hit an arbitrary target based on an artificial definition?
I’m also a bit disappointed to see another article repeat the usual misleading claim about one of the lowest state pensions. Reality: Pensioner incomes in the UK are fairly typical of the developed World. Our pension system is deliberately designed with a higher component of private pensions than some other countries, which obviously means the state portion of the pension is smaller. But talking about the state portion in isolation doesn’t give a true picture of incomes.
“Widening income inequality and increasing poverty are the great social evils of our time and the root cause of so many of today’s problems. ”
Absolutely.
What do you think is the ratio of the average CEOs salary to the wages of their workers?
The answer is in the link below. Hint: It’s probably much higher than you think.
https://blogs.lse.ac.uk/inequalities/2025/10/08/far-right-voters-and-support-for-redistribution/
@ Craig Levine @ Mick Scholes,
The renewables have their place and can be the cheapest form of energy when the wind blows and/or the sun shines but often we have neither. That’s the problem. The introduction of battery storage can help but the technology to make it a sufficiently inexpensive option isn’t there yet. This is why we still burn gas and the supposedly greener option of wood in our power stations.
This doesn’t mean we don’t need to try to prevent the global catastrophe of runaway climate change. I can’t see any alternative to more nuclear power. More fission in the short term and fusion reactors in the longer term.
@Peter Martin
“The renewables have their place and can be the cheapest form of energy when the wind blows and/or the sun shines but often we have neither.”
But we do have tides
https://www.marineenergycouncil.co.uk/marine-energy/tidal-stream-energy
@Craig Levene. You haven’t answered the question. How does moving to a cheaper form of electricity generation (in this case Renewables, that also help massively with Net Zero) reduce our competitiveness?
Mick – help massively with net zero ! We’ve outsourced our emissions to the far east and import them back through goods and products. They are literally off the books – all for a feel good factor.
Chris is right that inequality is the root cause, not a side effect. But most of the discussion here, and most political debate, focuses on income. The real story is wealth.
UK household wealth is now over £16 trillion. The top 1% hold more than the bottom 50% combined. That concentration shapes everything from housing costs to political influence, and income tax doesn’t touch it.
Jeff’s point about Musk’s wealth being “just paper” is one you hear a lot, but it doesn’t survive scrutiny. Stock holdings are routinely used as collateral for loans, they confer voting control over major corporations, and they can be liquidated at will. Calling that “paper wealth” is like calling a house worthless because you haven’t sold it yet.
Several countries already levy annual wealth taxes. Switzerland has done so for over a century. Norway and Spain have functioning systems. The administrative challenges are real but soluble, and the rates involved (typically 1-3%) don’t require fire sales or mass liquidation. They’re met from income, dividends, or marginal asset disposals.
The deeper point is this: when we only tax income, we ask people who work for a living to fund public services while those whose wealth grows through ownership pay little or nothing. That’s not just unfair. It’s a structural choice that guarantees inequality widens.
If we’re serious about the problems Chris describes, we need to talk about wealth, not just wages.
@ Nonconformistradical,
Yes we do have the potential to generate about 10% of our electricity needs from tidal power. There would, though, be high environmental costs in the loss of mudflats which are important for both aquatic and bird life. Many Lib Dems would no doubt be opposed when it came down to the details.
The energy available will be approximately sinusoidal in nature, meaning that it will be zero approximately four times a day on the high and low tides. What is needed is source of stable base line power. Everything else is just an add-on.
@ Mick Scholes,
The economics of the transition to renewables are somewhat more complicated than a simple comparison of costs assuming relatively ideal conditions for both wind and solar. Wind turbines need to be disabled when the wind is too strong. So they can only be classed as intermittent sources of power.
The true economic comparison has to be between systems which rely to a greater or lesser extent on the renewables. The more the reliance the greater the need for back up power generation which can be expensive.
Existing grids have been designed for centralised generation of power. They are particularly suitable for a more distributed power inputs. There a many articles on the net on the question. Wiki is usually a good place to start.
This is not to say it couldn’t be done on a wider scale but it would need substantial capital investment to overcome the difficulties and would not be cheap.
FWIW my opinion is that we need everything including both the renewables and nuclear power to be able to effectively tackle the climate issue. In fact we should classify nuclear power as a renewable energy source.
https://en.wikipedia.org/wiki/Renewable_energy
Might the problems of the socio-economic destabiling of our society be an inevitable consequence of the policy of Neoliberalism/Austerity?
Might the current government’s prioritising of restrictive money management over resource care and development be a serious error?
Might our children be our most important resource?
Might the cessation of Russian gas and oil be worsening the socio-economic contexts of so many?
https://www.google.com/search?q=effects+of+loss+of+russian+gas+and+oil+on+uk+economy&oq=effects+of+loss+of+russian+gas+and+oil+on+uk+economy&
@Peter Martin: Tidal power does not necessarily have a major impact on the area of mudflats. It largely means that there the area is fully exposed for longer and fully under water for longer and the tide comes in and out faster. That impacts eco-ststems but not necessarily for the worse. If neighbouring areas are unaffected, bio-diversity can be increased. Sea levels are rising and unless we sacrifice enough land, this will remove far more mudflat area.
The output is variable but predictable and there are possible sites around the coast which would generate at every phase of the tide. The variations are on a sufficiently short cycle that pump-storage and batteries can cope.
There is also tidal flow generation which has an even lower environmental impact and operates at a slightly earlier phase of the tidal cycle.
@Peter Martin: A large part of the increase in working poverty has been among those with no gap between the CEO salary and the workers salary, i.e. the self-employed. In general, workers in big organisations (with well paid CEOs) are better paid than those in small ones. It’s a fact of life rather than something to be encouraged. That means that the inequality between the top and bottom salaries in individual organisations will be less than that between CEOs and workers as a whole.
To follow on from Tanya’s earlier point, if you earn your income from work you have to pay National Insurance as well as income tax.
If you earn your income from savings and investments you don’t, you just pay income tax. It is patently unfair to apply a higher effective tax rate to work income than investment income, and this is another way the tax system favours those who have already accumulated or inherited wealth.
The Labour Government is adding an extra 2% on income tax on earnings from renting out property from next year. Again this will hit smaller landlords harder than those with large property portfolios held via a limited company.
@ Peter,
A fair point about the variation of tidal phases. I happen to live near Morecambe Bay which could be utilised for tidal power by building a barrage across the bay between Heysham and Barrow. The environmental change would be significant, though, and I’m sure there would be substantial opposition from the Green lobby!
I’m not totally against the idea but would prefer the construction of a new nuclear power station in Heysham or Sellafield, if allowed a choice.
” A large part of the increase in working poverty has been among those with no gap between the CEO salary and the workers salary, i.e. the self-employed. ”
I’m surprised you should make this argument. I haven’t come across it previously.
It’s not as if everyone has a choice to take up a well paying job in large organisations. They don’t particularly want older workers, for example, so setting up to work on a self employed basis can be the only real option for some.
Also you’ll find it difficult to convince many self employed plumbers and electricians that working at Tesco is a a better option even if there are jobs available there! They seem to do OK. I’m sure many who may well be working on the checkouts, some will be graduates from universities, would wish they had instead spent time doing an apprenticeship in either trade.
https://www.theguardian.com/business/article/2024/may/14/tesco-ceo-near-10m-pay-a-slap-in-the-face-for-struggling-workers-union-says
>”To follow on from Tanya’s earlier point, if you earn your income from work you have to pay National Insurance as well as income tax.
If you earn your income from savings and investments you don’t, you just pay income tax.”
[Nick Baird]
It’s an often made point, but not entirely accurate. Whilst employment requires the payment of NI and thus accrual of pension benefits, those living on income from savings and investments, need to make voluntary NI contributions if they desire an improved state pension.
@Peter Davies -“ A large part of the increase in working poverty has been among those with no gap between the CEO salary and the workers salary”
An interesting take. From my experience the increase has been driven more by part-time and zero hours contracts than self-employment – although not saying the self-employed are well off(*). We should remember the raw data is very simple – if someone is on zero hours they will be classed as “in employment”, even though the amount of time they may be actually earning could be minimal.
(*) Aside: should probably look to see if ONS has published any income analysis for those registered as self-employed.
Tradespeople such as plumbers selling to consumers are generally doing OK. It’s the people who are self-employed because they can’t get jobs I’m talking about. You can pay yourself less than minimum wage so employers are increasingly giving work to them instead of employing people on minimum wage with workers’ rights.
Serving evenings in an independant takeaway, you may be making a higher hourly rate than the owner even on minimum wage with no overtime rate. It doesn’t make you better off than a Tesco till worker (above hourly rate and overtime) however well paid their boss.
>” The removal of the standing charge from energy bills and spreading it across the unit charge possibly increasing the higher the consumption would also help the lower paid.”
If we really want to focus on those struggling, we need to address the comparative high costs those on prepayment meters pay for energy compared to those able to pay on monthly direct debits with advantageous contracts. Perhaps, it would be better for government monies be targeted at underwriting the risks and increased administrative costs of these arrangements , just as we have “social tariffs” for broadband. Additionally, given the energy efficiency levies being paid by all, perhaps Ofgem need to change the focus of these so as to favour households in deprived areas.
@Peter Davies- “ Serving evenings… It doesn’t make you better off than a Tesco till worker (above hourly rate and overtime)”
We do need to try and avoid assumptions – which your full comment is sort of implying. A big complaint I’ve seen among my teenagers (now young adults) and their friends has been getting meaningful amounts of work from employers – with many (big name) shops whilst giving good hourly rates don’t give good amounts of hours: a local out-of-town shopping centre is always wanting staff as the shops will tend to only offer 2 hour shifts, with very limited extra hours available so as to ensure staff don’t cross any thresholds which might cause them to gain any employment rights or for the employer to incur additional costs, which once you’ve deducted transport costs and time is effectively 1 hours pay for 3~4 hours of time.
If I look back to the time I was doing general shop work, the key difference was the staff were much more local ie. Within 5~10 minute walk and thus doing a couple of hours wasn’t a big issue and work was largely assured ie. You were employed to work every Saturday morning/afternoon for a 4 hour shift, not just be in the pool of staff that will be randomly dipped into each week…
Inequality on the scale the uk experiences is like a virus destroying the very fabric of our society. Unless this Labour government goes some way to tackling it, it will cause social dysharmony and make creating a stable society near impossible. Some people do cheat the system and should be treated harshly. The vast majority however are just trying to make ends meat and deserve the government’s help and compassion.