Just 1% of the British population has snared a quarter of the country’s wealth since the turn of the century, according to a new report from charity Oxfam.
The charity says the UK’s wealthiest individuals have increased their fortunes by £4 trillion since 2000.
Oxfam is calling on the government to stop the wealthy avoiding tax and to crackdown on tax havens.
The charity estimates the wealthy have £170 billion held in secret in tax havens such as the Cayman Islands and Bermuda.
And that hidden cash is losing The Treasury £5 billion in taxes every year and costing the world’s poorest countries £43 billion in uncollected taxes.
Tax avoidance thrives on secrecy
Oxfam chief executive Mark Goldring argues too many less well-off people in Britain have to resort to food banks to feed themselves and their families and cannot afford to heat their homes while billionaires are becoming wealthier.
“It’s not right and the government should do something to put a stop to this travesty,” he said.
“Secrecy let’s tax avoidance thrive and rob governments of their fair share of vital revenue that could make such a big difference to those struggling to stay alive.”
Oxfam says 600,000 people in the UK picked up 26p in every pound of increased wealth in the country, while only 7p was shared among the poorest 50% – which amounts to 30 million people.
Comparing the figures
In response, think-tank Adam Smith Institute believes Oxfam is playing with numbers and the problem is not as desperate as the charity says.
“£120 billion sounds like a lot of money, but you have to compare it to some other figures to see the scale of the problem,” said Tim Worstall.
“With a global economy of $70 trillion and global tax revenues of $23 trillion, even with generous exchange rates, the amount is less than 1% of government budgets.
“Our view is such a small amount of extra money wouldn’t solve a lot of problems, but that doesn’t make tax avoidance OK. You just have to put things into perspective and the money might help but would not make an awful difference to many.”
