Britain's 157 billionaires now hold wealth equivalent to more than a fifth of the country's entire GDP, according to analysis by the Equality Trust. The figure represents a fivefold increase since 1990 and has been described as a 'ghost GDP' that highlights the growing disconnect between headline economic growth and the reality for most people.
Ghost GDP: A Growing Disconnect
The Equality Trust, which based its analysis on data from the Sunday Times rich list, said that the trend shows how economic growth is increasingly disconnected from everyday life. 'Every year politicians point to GDP growth as proof the economy is working. Ghost GDP shows us what that ambition has done to the rest of us because for most of us, it doesn't feel like the economy is working at all,' said Priya Sahni-Nicholas, co-executive director of the Equality Trust. She added that 'ghost GDP and the hollowed out economy it creates, tells you what the rest of us have lost as a direct result.'
Historical Context and Current Figures
When the Sunday Times first published its rich list in 1989, there were 15 billionaires with a combined wealth of £27 billion, representing about 4p in every pound of GDP. Today, the Equality Trust calculates that 157 billionaires hold just under £670 billion, which accounts for more than 22p in every pound. Globally, billionaire wealth has grown from 2.5% to 14.1% of GDP since 1990, but Britain's trajectory from 4% to 22% is even more extreme.
Expert Opinions on Wealth Inequality
Gabriel Zucman, an economist at the University of California, Berkeley and the Paris School of Economics, noted that while in the postwar decades GDP growth numbers broadly reflected income growth for most people, 'today, there is a total disconnect between macroeconomic indicators and the reality of income gains for most people.' He pointed to 'the upsurge of income and wealth among the super rich – and the accounting manipulations of multinational companies in Ireland – are distorting macroeconomic numbers.'
Simon Pittaway, a senior economist at the Resolution Foundation, said that as total wealth has grown, so have the absolute gaps between typical households and those at the top. 'Today, if someone with typical levels of wealth miraculously saved all of their earnings throughout their entire working life, it would no longer be enough to move them up to the top of Britain's wealth ladder,' he explained.
Workers' Pay Squeeze and Wealth Concentration
'Workers have endured the longest pay squeeze in living memory,' said Sahni-Nicholas. 'But the richest 50 families now hold more wealth than the poorest 34 million of us combined.' The rich list, which once tracked the top 1,000 wealthiest people in Britain, now covers just 350 individuals, with entry requiring wealth of at least £350 million.
Sources of Billionaire Wealth
The trust's analysis found that while in 1990 three billionaires were primarily linked to wealth from property, inheritance and finance, today finance accounts for about 30% of all billionaire wealth. Sahni-Nicholas described this as 'rentier capitalism: sitting on appreciating assets, collecting rents, charging fees for moving money around,' adding that it 'extracts value from the economy rather than creating it.'
Broader Social Implications
Data from other organisations highlights the wider social outcomes of wealth disparity. Last month, the Health Foundation found that healthy life expectancy in Britain had fallen by two years over the past decade to under 61, placing the UK, the sixth-largest economy in the world, second to last among comparable wealthy nations. This week, Unicef ranked Britain 24th for child wellbeing, 28th for mental wellbeing, 35th for income inequality and 25th for child poverty among wealthy countries.
