Gap between rich and poor ‘growing’


Published: Wednesday 29th October 2014 by The News Editor

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The number of dollar billionaires in the world has more than doubled to 1,645 since the financial crisis of 2008, according to a new report which warned that inequality between rich and poor is spiralling out of control.

Despite the austerity affecting ordinary people around the globe in the wake of the recession, the richest 85 billionaires saw their fortunes increase by a total of around £150 billion over the past year – the equivalent of £415 million a day or almost a third of a million pounds a minute, the report by development charity Oxfam found.

Research earlier this year found that these 85 people had access to wealth equal to that of half the world’s population.

If the world’s billionaires were taxed at a rate of just 1.5% on their wealth over 1 billion US dollars, it would raise £46 billion a year – enough to get every child into school and deliver health services in all of the world’s poorest countries – said the report, entitled Even it Up: Time To End Extreme Inequality.

Oxfam’s chief executive Mark Goldring said: “Inequality is one of the defining problems of our age. In a world where hundreds of millions of people are living without access to clean drinking water and without enough food to feed their families, a small elite have more money than they could spend in several lifetimes.

“The consequences of extreme inequality are harmful to everyone. It robs millions of people of better life chances and fuels crime, corruption and even violent conflict. Put simply, it is holding back efforts to end poverty.

“Governments around the world have been guilty of a naive faith that wealth going to those at the top will automatically benefit everyone. That’s not true – it is their responsibility to ensure the poorest are not left behind.”

Oxfam challenged governments to follow a seven-point plan to rein in inequality, by clamping down on tax dodging; investing in universal free healthcare and education; i ntroducing equal pay legislation; a greeing a global goal to tackle inequality; i ntroducing minimum wages and moving towards a living wage for all workers; shifting the burden of taxation from labour and consumption towards capital and wealth; and providing adequate safety nets for the poor, includ ing a minimum income guarantee.

The report found that there are 16 billionaires in Sub-Saharan Africa living alongside 358 million people in extreme poverty, while in South Africa inequality is now greater than it was at the end of apartheid.

If African levels of growth and inequality continue on current trends, it is estimated that the continent’s poverty rate won’t fall below 3% until 2075.

Mr Goldring said: “Extreme inequality is far from being inevitable – it is the result of political choices and economic fashion, kept in place by a wealthy elite whose influence helps keep the rules rigged in their favour. Too often, the ‘invisible hand of the market’ is used as an excuse to pick the pockets of the poor.

“In countries around the world, a wealthy minority are taking an ever-increasing share of the pie. This is not just an issue of fairness, but in a world where people are dying of hunger or because they can’t afford healthcare, it becomes an issue of life and death.”

Responding to the report, Bank of England chief economist Andrew Haldane said: “In highlighting the problem of inequality, Oxfam not only speaks to the interests of the poorest people but also the wider collective interest.

“There is rising evidence that extreme inequality harms, durably and significantly, the stability of the financial system and growth in the economy. It slows development of the human, social and physical capital necessary for raising living standards and improving well-being. That penny is starting to drop among policymakers and politicians.”

Nelson Mandela’s widow Graca Machel said: “The last decades have seen incredible human progress across Africa and the world. But this progress is under threat from the scourge of rapidly rising inequality.

“Addressing the gap between the richest people and the poorest and the impact this gap has on other pervasive inequalities between men and women and between races that make life for those at the bottom unbearable is an imperative of our times. Too many children born today have their future held hostage by the low income of their parents, their gender and their race.

“The good news is that this growing inequality is not inevitable. It can be resolved.”

Published: Wednesday 29th October 2014 by The News Editor

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