In this morning's video, I argue that although the UK looks to be a wealthy country, with £15 trillion of financial assets, that wealth will very rapidly be undermined if we do not invest in our children and young people, in climate change, and in preserving our democracy, and most of our politicians appear quite uninterested in that.
The audio version is:
This is the transcript:
The UK is worth £15 trillion. That, according to the Office for National Statistics, is the total financial value of wealth in this country.
Now, let's split that down a little bit. I'm looking at a chart. Five and a half trillion pounds - that's £5,500 billion, or £5,500 thousand million is private property wealth.
Most of that is people's houses. Some isn't, of course. Some is land and buildings used for other purposes. But most is houses.
Net financial wealth, that's the money that individuals own in cash and in shares and savings and so on, is in comparison surprisingly small. It's just under two trillion pounds.
In comparison, pension funds are worth a lot more. They're worth six and a half trillion pounds.
And our personal assets everything from our cars to our works of arts or, more likely, the things lying around our homes, well, they're worth £1. 3 trillion.
So, add that all up and the UK is worth £15 trillion. Most of which is in some form of asset, which is saleable. And that's really important because that means that we are, without a shadow of a doubt, a wealthy country.
That figure of £15 trillion, by the way, estimated in 2020 and now out of date, and not updated by the Office for National Statistics since then, so please don't blame me, blame them.
That figure is roughly six times the UK's national income. Again, that gives you some indication of the scale of the UK's financial wealth.
And yet at the same time, all of it is utterly useless if we don't do certain things. One is if we don't educate our young people, if we don't care for them, if we don't provide for them, if we don't make sure that they can become fit and proper members of our society in the long term, by feeding them, for example, when at present maybe 20 percent are in poverty and literally having to skip meals.
The contrast between £15 trillion and children going hungry. is almost hideous and ridiculous to think about. Ridiculous because it should just not be there.
There's also the question of, of course, climate change. Most of that wealth would disappear if we had to suffer the serious consequences of climate change.
Why? Well, vast quantities of our property would be underwater.
Large amounts of the money held in pension funds will disappear in terms of value because the companies creating that supposed wealth won't be able to do so because they won't be able to get hold of the resources that they need or there will be flooding or something else preventing their access to markets.
So that wealth which looks to be phenomenal, is entirely conditional on the decisions that are made by politicians to secure our well-being in the long term.
The well-being of our young people, their education, their fitness, their health. Literally what they eat.
The fitness of our planet, its ability to survive climate change.
And the fitness of our democracy even to uphold the rule of law and to maintain the rights that people have and have taken for granted. To claim that assets are their own and the law will protect them.
All of those things could be at risk if we have governments that do not care about them. And I would suggest to you that we have the potential for such governments in this country if we haven't already got them in some cases, for example, with regard to child poverty.
So £15 trillion, it's a number, but it's nothing more than that. There's nothing real about our financial wealth if we don't continue to invest in our well-being, because that wealth is rooted in the well-being of the people of this country. And that is what we need: governments willing to invest in it.
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I would argue that financial wealth is not necessarily a good indicator the the country’s wealth due to inequality.
A better indicator would be how people feel about their lives: job security, health security, energy security, etc, or our standard of living.
The well-off have most of the financial wealth, and the rest of us are feeling that our standard of living is much lower than it used to be.
That transition from ‘wealth-being’ to ‘well-being’ is long overdue, and is part of permanently changing the dismal GDP growth mindset, as well as the consumer consumption imperative that drives industrial capitalism.
Something is only worth what someone else will give you for it.
Clearly my house has ‘worth’ in the sense that you can live in it and it has a decent sized garden that you can grow food in. You can also work out what it would cost to rebuild it.
Similarly my 15 year old Kia Rio with 153000 miles on the clock has value to me because because like Old Man River it keeps on rolling.
By comparison I have an (unissued) P&A Campbell Share Certificate upstairs (Operators of Paddle Steamers, never a lucrative trade but one that made profits for its suppliers) which is now only valueable as a nice historic document.
I suggest that as others have pointed out most of this ‘value’ is what someone else might give you for it and a lot of th evaluations these days are artificially inflated – agricultural land anyone, nobodys buying it for whagt they can make farming it.
Well said.
“maybe 20 percent [of young people] are in poverty and literally having to skip meals.”
When do we start naming this correctly?
I “skip a meal” when there’s food in the cupboard but I choose not to eat.
A prisoner in the gulag is *starved of food* when he is given no midday meal.
Maybe 20% of our young people are being **starved** of at least a third of their daily food needs, because even “hard-working families” don’t have enough money to feed them.
Accepted
There’s no mention of public infrastructure such as roads, railways, water, electricity, telephone, ports and airports, public buildings (medical facilities, council offices etc.) so I assume this would be additional to the £15 trillion?
This is private financial wealth
£5,500 bn property. This only has value because of the services supplied to it.
Housing estate – block the drains for a month – hell block them permanently. Value of the property? not much. However, successive governments have been treating the services that give property value as a “sort of” piggy bank. Selling them off via the fig leaf of shareholder democracy.
The climate disaster, your house floods – insurance pays up, it floods again (2 years later) maybe insurance pays, 3rd time – nope. Value of property? perhaps as a mooring? etc.
The UK, thanks to the politicos, is sleep walking to disaster & neither the politicos nor the electorate understand that..
Exactly….
Some 30 years ago I moved to Ireland to take up a job at Galmoy Mines and I made a list of thing I wanted to consider when buying home. As a bit of a joke the last item was to be at least 80m above sea level. This was the predicted rise in sea level if all the ice melted.
On 21 March last year, Professor Kevin Anderson of the Tyndall Centre for Climate Change Research wrote:
‘British people alive now are almost certain to experience life with little or no access to fossil fuels. We care about our children. It is time to cut our usage as much as we can – as soon as we can.
For the majority (even in wealthier nations) I see genuine responses to climate change IMPROVING [emphasis added – JB] not degrading their well-being & quality of life.”
(https://climateuncensored.com/what-would-serious-climate-action-look-like/
A few examples:
An immediate moratorium on airport expansion and a plan to deliver a fair 80 per cent cut in all air travel by 2030.
No new internal combustion engine cars would be built from 2025, and there would be a huge shift away from private cars in cities and urban environments coupled with a shift towards public transport and active travel.
Maybe rural communities would continue to use EVs, but with a rental rather than ownership model.
Retrofit existing homes, not just a pilot scheme, but actually rolling it out street by street at mass scale. Passive house standards would be required.
All new properties to have a maximum size threshold. Why are we building homes that are 200 to 400m2? Cut this to a maximum of 100 to 150m2 – still large homes – but with much less resource and material use, and of course less land! And when we sell existing very large houses, have them carefully and creatively divided into normal-sized homes.’
This last proposal, Richard, cuts into your estimate of ‘£5,500 million million is private property wealth’. You already mentioned ‘vast quantities of our property would be underwater’. In addition, too many existing properties are underused while too many are priced out of a decent place to live.’
Twenty months ago, you drew attention to these issues (https://www.taxresearch.org.uk/Blog/2022/11/28/ed-balls-seems-to-think-balancing-the-books-is-more-important-than-tackling-climate-change/#comment-914889 ‘Ed Balls seems to think balancing the books is more important than tackling climate change’) [At least he’s been consistent.]
In response, my comment included (November 28 2022 at 1:27 pm)
We could have:
* a national speed limit of 50 mph from midnight tonight (as in the OPEC crisis of 1973) … with all signed limits to be cut by 10 mph: 50 becomes 40, 40 becomes 30, 30 becomes 20.
* Energy rationing to be introduced asap (Petrol rationing took only 2 weeks in September 1939).
* No fossil-fuel powered racing ever again (No limits on using muscles, oars or sails).
* Abolition of standing charges for water, electricity and gas (maybe for electronic communications as well.) Affordable rates for minimum necessary usage – then exponentially rising charges.
* No tax allowance for any advertising or marketing costs.
* Stringent restrictions on advertising
* No outdoor lights except for safety and security (UK 1940, Ukraine 2022 because of fear of explosive missiles)
* A programme of relocalisation of shops, schools, clinics, government and more. Live in the town where we work (Most people until about 1950)
* Facilitation of walking, cycling and frequent, reliable (but not necessarily fast) public transport.
* Heavy taxation of second (or more) homes and for larger than necessary homes.’
Adding to this now, how much of our wealth is invested in (beautiful to look at) cars that will be redundant and what about fewer road accidents, less pollution, more walking and safer cycling, healthier people ?
Thanks
Where do I sign up to this ? All things our ruling classes should have been suggesting many years ago now. Instead of which they continue to deny our unfolding increasingly brutal climate catastrophe reality. Of course they have always been aided, abetted and funded by ignorant wealthy individuals who now pay vast sums to tech companies (used to be actual academics & journalists) to create and control the content and reach of mediated information. Perhaps of interest is this attempt to create a socially democratic alternative social media, very much in its early stages: https://m.youtube.com/watch?utm_source=substack&utm_medium=email&v=8z694FOLKyg&feature=youtu.be
Sadly you don’t get to sign up Sara. Policies and politicians must be paid for.
We’re living in Donocracies now, where the 99% get to enjoy the theatre of fake inter party contests, and play with the toy steering wheel of voting. Meanwhile the oligarchs buy the politicians and policies they desire (not least those permitting Israel to press on with its ethnic cleansing).
Neoliberalism is well-embedded in the political class and has mostly succeeded (public health and social services are hanging by a thread, ripe for privatisation or elimination) and I fear it will only be shaken by major catastrophe.
When “the centre left” continues the policies of “the centre right” you will no doubt see in the UK what you do in Australia – where Labor aims for a budget surplus, the central bank keeps interest rates up, the Liberal Party (Tories) gets increasingly deranged and increasingly popular – and in NZ where Labour stuck to tight fiscal rules and was rejected for a nightmare coalition of “the centre right”, the far right and the ultra right which has already driven the country into recession and is rapidly tearing up environmental and social protections while cutting taxes for the rich.
Correction/typo: “£5,500 billion, or £5,500 million million” should read £5,500 thousand million.
I’m old enough to remember when there was a dispute as to whether a billion
should mean a million million or a thousand million, but the latter (American usage?) won out.
£5,500 thousand million works out at about £80,000 per head (for the UK).
Apologies
That came from working from a transcript of what I actually said – which spelt it all out
David Byrne says:
We need to understand the context of.climate change.
The UK , as is often stated, is responsible for approximately 1% of the problem on a global scale. Therefore, whatever action the UK takes, we will still end up submerged.
At the moment, the USA, China, Russia, the Middle East etc appear to be wedded to fossil fuels.
Ergo, we in the UK must learn to swim in our polluted waters.
I have to disagree David. China is making big changes. I accept others are not. But does that mean we must abandon hope?