Since the Second World War, attempts to deliver the social democratic goal of a more equal society have centred on a more comprehensive benefit system paid for by progressive taxation. It was a strategy that contributed to the peak equality achieved in the mid-1970s. Since then the strength of such “income redistribution” has been steadily weakened. The tax system has become regressive, taking a bigger slice of low than of high incomes, while working-age benefit levels have been sharply eroded. Alongside these changes, a series of shocks, many self-inflicted – from ever deeper recessions, deindustrialization and a decade of austerity to accelerating automation, Covid-19 and Brexit – have played havoc with family finances, livelihoods and pay. Today we have a mean and patchy benefit system pitched against a greatly heightened risk of poverty.

Britain needs a more equalizing tax/benefit system. But even a more progressive system of income redistribution would not be enough to tackle today's entrenched drivers of inequality. An effective anti-poverty and pro-equality strategy requires new measures of “asset redistribution” aimed at sharing the rising pool of wealth more equally. Wealth – which plays an increasingly central role in what the French economist Thomas Piketty has called a “force for divergence” – has long been the elephant in the room of anti-inequality policy.

Britain is an asset-rich nation, yet the revenue from capital taxes has been steadily falling and now raises a fraction of the total tax take. Outstripping the growth of incomes, the total level of national wealth has surged from around three times the size of the economy in the 1960s to approaching seven times today. Official data put personal wealth holdings at some L14. trillion, holdings that are increasingly concentrated at the top, reversing the long-term trends prior to the 1980s. They are a primary driver of today's institutionalized inequality. This is because the considerable returns from ownership (in the form of profits, rents and dividends) – returns that have for decades exceeded the growth rate of the economy – accrue disproportionately to the already rich. A tenth of UK households own 45 per cent of the nation's privately held wealth, while the least wealthy half own just 9 per cent.