I help rich people tackle inequality. How to solve the cost of living crisis | Stephanie Brobbey

l spent nearly a decade advising the UK’s wealthiest families on how to preserve their wealth. As we witness extraordinary rises in the cost of living, we need to talk about the elephant in the room: wealth inequality.

The UK is the fifth largest economy in the world. Still, Britain is the second most unsustainable of 36 major economies, according to recent research by L’Atelier BNP Paribas, an independent research subsidiary of the French bank. Depressed salaries coupled with high housing and childcare costs have been a persistent problem in the country for decades, and now, according to the report, extreme wealth inequality threatens to spark civil unrest.

Families already under significant financial pressure face the prospect of a cost of living tsunami as prices of daily groceries rise by 50%. At the same time, the wealth of billionaires has soared in the past year. The UK now has a record total of 177 billionaires, according to the Sunday Times rich list 2022.

I have a particular sensitivity to platforming extreme wealth without criticism, due to my past life as a private wealth attorney. An intellectually stimulating field of practice, I planned to continue my career indefinitely until one day a friend told me there were more food banks than McDonald’s branches in the UK. I was shocked to find out that the gap between rich and poor was so extreme. In my opinion, this represents something incredibly disturbing about the economic health of this country.

I had already begun to reflect on the critical role of taxes for investment in public services and felt an increasing level of discomfort related to wealth disparities, as well as the existence of harmful tax stories. Somewhat inconveniently, giving advice on how to “reduce” taxes on wealth was a fundamental aspect of my day-to-day role. When I realized I was in a cognitive dissonance over the issue of wealth inequality, it became clear that I was part of the problem. As a player in the global economy, I operated in a system that exists primarily to preserve and accumulate assets, and to minimize taxes on the rich. There had to be some connection between my professional role and the increasing degree of wealth concentration revealed to me.

I came to the conclusion that our economic system, in its present form, is perpetuating wealth inequality by design. Economic profits are concentrated in a very small part of the population and political choices have been made to prevent these profits from being distributed more fairly. After a dramatic change of course, I now work with a growing number of wealth owners who recognize that wealth inequality is destabilizing our economy and endangering the fabric of our society. They advocate higher taxes on wealth so that ordinary families and low-paid workers are not burdened with a disproportionate financial burden.

An increase in billionaire wealth should not be a cause for celebration at a time when many people in the country cannot afford to heat their homes and put food on the table. While inflation, which effectively becomes a tax on ordinary people, spirals out of control, the wealthiest remain largely tax-sheltered. Many of those in the top 10 of the Sunday Times list are not on the Sunday Times Tax List, a list of the 50 biggest taxpayers in the UK. Contrary to what this administration claims, the impact of the rise in the cost of living is not just due to inflation, and it reveals the true magnitude of a serious long-standing economic imbalance.

While it is encouraging to see the introduction of a temporary windfall tax as part of the £15bn cost of living support package targeting low-income families, the measures do not provide an adequate long-term solution for our most vulnerable. In addition to these measures, what is urgently needed is a fundamental redesign of our tax system so that wealth is taxed more effectively and those with the most resources contribute their fair share.

We should start by telling the whole story about the economy and why the sudden rise in the cost of living is having such a disastrous impact on ordinary people. Wealth is not created in a vacuum and choices about how we generate income are political. We need to have an honest conversation about how extreme wealth is generated and amassed, and force this government to recognize that the most equitable way to redistribute that wealth is through a fair system of progressive taxes.

  • Stephanie Brobbey is a former private wealth attorney who is now the founder and chief executive of the Good Ancestor Movement

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