Outside the marginals

a commentary on the politics that followed the UK 2010 & 2015 elections

All in it together

A personal fortune of £100m is now required to become one of the 1,000 richest people in the country, up £15m compared with last year’s entry point of £85m.

In 1997 it took a fortune of just £15m to join Britain’s richest 1,000 people.
BBC News Website 26 April 2015 : Music boss Len Blavatnik named as Britain’s richest man

What does this annual reporting of the Sunday Times Rich List?

It tells us that the very (very) rich seem to have done very well during the post crash period of austerity.

It also tells us to be very wary of politicians who tell us that “on average” we are better off. (They are probably being truthful for once – but utterly misleading as usual!)

If we have 10,000 people with modest wealth of £20,000 and one rich person with wealth of £85,000,000, the average wealth is about £28,500! Then if that rich person’s wealth increases to £100,000,000 (and everyone else stays the same) average wealth increases to about £30,000. “On average” wealth has increased by £1,500! But your “average person” does not have wealth of £20,000 + £1,500, they still have £20,000!

Before After Increase Percent
No of “normal” people 10,000 10,000
“Normal wealth” (!) 20,000 20,000 NIL NIL
Total “Normal wealth” (!) 200,000,000 200,000,000 NIL NIL
One person’s super wealth   85,000,000 100,000,000 15,000,000 ~21%
Total Wealth 285,000,000 300,000,000 15,000,000 ~21%
Average Wealth (approx) 28,500 30,000 1,500 ~5%

That’s how the maths works – and unfortunately how the economy seems to work!

 

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