What does it mean to be “wealthy”? It is perhaps this question more than any other that haunts British society. The public’s definition can be glimpsed in the reaction to Labour’s mansion tax idea for properties worth more than £2m in 2015, or its proposal for a 45p tax rate on earnings over £80,000 in 2019: a revolution of polite but pushy well-to-do Britons (and a Conservative election victory) never seemed to take long to follow.
Like expensive Swiss clockwork, it’s happening again. At the time of writing, more than 70,000 parents of private school pupils have signed a petition to stop Keir Starmer’s plan to charge private schools VAT. Tony Perry, an NHS data analyst on a £60k salary and leader of the Education Not Taxation: Parents Against School Fee VAT campaign – who sends his 10-year-old son to a £21,000-a-year school in Berkshire – describes himself as “a non-wealthy parent”. Go through the comments on the petition and many others chime in to protest just how wealthy they aren’t.
In reality, the median salary in the UK before tax is £34,963. And from simply the school fees perspective, beyond special educational needs places (which Labour’s VAT charge would exclude), there is no need for anyone in the UK to send their child to a private school. If parents feel so cash-strapped, they should just use our state education system, where 93% of pupils in the country are educated.
But the fact remains that many in the top 10% of earners – those on £59,200 and above – do not feel rich, and that has major societal consequences.
First, the feelings of this group matter because they are simply more likely to vote, to trust in political institutions, and to influence our laws, as the academics Gerry Mitchell and Marcos González Hernando found in their 2023 book about the top 10%, Uncomfortably Off.
Second, the nuances in public attitudes towards wealth, salary and class must be understood by our politicians because they make it very difficult for parties to pitch wealth taxes, raise taxes on higher incomes, or land attacks on wealthy individuals in public life – and they are also key to understanding something profound about the British psyche.
Question Time viewers may remember the case of an irate audience member in 2019 earning above £80,000 who assumed he wasn’t in the top 5%, or even the top 50%. Since then, I’ve been fascinated by our perceptions of wealth and have been doing my own research for the New Statesman magazine with the Redfield & Wilton Strategies polling firm on these questions. We’ve uncovered some stark views: 60% of those on £80,000-£100,000 believe they are “about average” on the income scale, for example, and a quarter of Britons paid £100,000 or more identify as “working class”.
But more generally, we have found that no matter where you sit on the scale, you generally tend to underestimate how much you earn compared with the average, and you are more likely to feel your social circle is “better off”, and yourself “worse off”. This makes particular sense in the case of the top 10%, who are often working in jobs – as lawyers, consultants, recruiters and financiers – that expose them to people far richer than themselves. In the scheme of the haves, have-nots and “have yachts”, they see themselves as the “have not yachts”. Perry voices this very bias in his interview with the Telegraph: “Charging VAT won’t hurt the wealthy students attending public schools like Winchester, where Mr [Rishi] Sunak studied. It will hurt many others, however.”
Yet perception isn’t the only thing at play. There is real inequality high up the income scale. While certainly not the most egregious economic divide in our country, the top 1% are pulling away from the top 10% at a drastic rate.
The Uncomfortably Off authors reveal that even those in the top 5% (earning £82,200 and above) are much closer to the national median than to the top 1% (£183,000 and above) – where wealth is rapidly accumulating. The Labour MP Liam Byrne’s new book, The Inequality of Wealth, details how the average wealth of an individual in the top 1% of Britain’s richest increased 31 times more than that of those in the bottom 99% between 2010 and 2021. Overall wealth in the UK rose £4tn in the same period – nearly a quarter of which went just to the top 1%.
However you feel they should spend their money, it is little wonder, then, that the Tony Perrys of Britain feel as if their lifestyle is slipping away from them. The challenge for politicians aiming for a fairer Britain is to make this section of society care about inequality in general, rather than simply who gets to afford which private school.
Anoosh Chakelian is Britain editor of the New Statesman
Britain’s richest 10% don’t think they’re wealthy – and that’s disastrous in the fight against inequality
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24.01.2024
What does it mean to be “wealthy”? It is perhaps this question more than any other that haunts British society. The public’s definition can be glimpsed in the reaction to Labour’s mansion tax idea for properties worth more than £2m in 2015, or its proposal for a 45p tax rate on earnings over £80,000 in 2019: a revolution of polite but pushy well-to-do Britons (and a Conservative election victory) never seemed to take long to follow.
Like expensive Swiss clockwork, it’s happening again. At the time of writing, more than 70,000 parents of private school pupils have signed a petition to stop Keir Starmer’s plan to charge private schools VAT. Tony Perry, an NHS data analyst on a £60k salary and leader of the Education Not Taxation: Parents Against School Fee VAT campaign – who sends his 10-year-old son to a £21,000-a-year school in Berkshire – describes himself as “a non-wealthy parent”. Go through the comments on the petition and many others chime in to protest just how wealthy they aren’t.
In reality, the median salary in the UK before tax is £34,963. And from simply the school fees perspective, beyond special educational needs places (which........
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