How much money would you like to earn each year? I’m not talking about a crazy fantasy where you never have to work again and get chauffeured everywhere in a gold-plated Rolls Royce driven at breakneck speed by Justin Bieber, your personal driver.
No, think about how much your household would need to earn to be comfortable. To have somewhere to live, enough money to eat three nutritious meals a day and to shop for clothes when you need them. To be able to afford to run a suitably sized car if you live somewhere where public transport isn’t a reliable way to travel at all times. To have the money to be able to go out and socialise with friends a few times a week and to save up for a couple of weeks in the sun during the summer. To be able to treat your loved ones to something a bit special on their birthdays and at Christmas or Eid or whatever cultural celebrations are important to you.
What figure have you got in your head now?
If the UK’s income from 2022 was divided equally between every member of the population, known as GDP per capita each person would receive $46,125.301. Based on 2022’s average exchange rate, that’s about £37,430. The average household in 2022 was 2.36 people2, meaning the average household income would have been £88,334.
In reality though, the median3 UK household income in 2022 was £32,300.
Looking at the USA, the GDP per capita in 2022 was $76,329.60, so with an average household size of 2.5, each household would have received $190,824. The reality was a median household income of $74,5804.
So, how did your figure for income to live a comfortable life compare to the figure for the average household’s income based on GDP per capita?
It’s kind of irrelevant though. Splitting wealth like this is essentially communism and we know human nature means that system doesn’t work. There will still be those at the top of the pile who want more and will take more wealth for themselves, despite the way the system is meant to work.
Worse than that though, the economy will shrink meaning the GDP per capita figure goes down too. Communist leaders instinctively distrust entrepreneurs and are jealous of them, tending to take what they build and run it into the ground. Remove the reward of greater wealth and status for building businesses, you remove the incentive for new creative entrepreneurs to grow the economy for everyone. Hence communist countries become poorer.
So if the GDP per capita is an unrealistic figure, why did I bring it up? Well, just another reminder about how wealth is so unevenly distributed within most of our societies. In both the US and the UK, even the average multi-person household earns less than the GDP per capita figure.
And it’s getting worse. In both countries, the median household income in 2022 fell in comparison to the previous year. A drop of 2.3% in the US and a smaller drop of 0.6% in the UK.5
Those figures don’t tell the full story though. In the UK, the poorest 20% saw their disposable income drop by 3.8%, but at the same time the richest 20% saw their disposable income increase by 1.6%. So the poor became poorer and the rich became richer. How does that work?
In the US, it wasn’t quite the same story, with most people becoming poorer. The highest earners in the poorest 20% saw their income in 2022 drop by 6.22% compared to 2019, while the lowest earners in the richest 20% saw a decrease of 5.73% compared to their 2019 income.6 For those just making it into the richest 5%, the difference between their 2022 income and 2019 was -4.07%. So, at least most people have been becoming poorer, but the poorest have seen their income drop relatively at a higher rate than the richest.
Again does it seem fair that those who already have the least are the ones who are losing the most? Shouldn’t those who can afford it, make greater sacrifices to ease the pain on the poorest in society?
Magnets For Money
It may feel a little unfair to pick on one family, but I’m going to. It’s a family from the UK that used to be called the Saxe-Coburg-Gothas, but that sounded a bit German-ish back in 1917, when the UK and others were at war with Germany, so they changed it to Windsor. It’s a bit easier on the tongue.
Before we go on, I’m not a fan of royalty and I don’t think the idea of elevating a single family above others fits in with modern societies. However, I genuinely respected Queen Elizabeth ll and think she did serve the people of the UK pretty well. Yes, she was hugely wealthy, but a significant chunk of her life was spent administering official duties. And there was no retirement for her. It all continued right up to the end.
Should any 96-year-old in their last few days have to spend time entertaining Boris Johnson and then Liz Truss? In some countries that would count as cruel and unusual punishment. I’m really not suggesting that we should bring back the beheading of monarchs, but wouldn’t that have been more humane?
I feel that her role was really an act of cruelty. Would you like to waste countless years of your life shaking hands with randos and having the same inane conversations day after day, just with different people? Do you really believe the immense wealth would compensate for effectively losing the greater part of your life and the freedom to do what you want?
Moving on to the following generations, I feel rather less warm towards them. Where Queen Elizabeth largely seemed to try to live a life of decorum in keeping with the role, her children and grandchildren have descended into an unseemly soap opera.
What really gets my goat is the fact that the British people have to fund a big wedge of this soap opera. The Royal Family received £86.3 million through The Sovereign Grant in 2023.7 At the same time, King Charles may possess personal wealth of £1.8 billion.8 I say may possess as I’ve also seen estimates that the poor soul could have as little as £750 million, but either way, by any standards, even those of the British PM Rishi Sunak, he’s seriously minted.
Why should the British public have to waste any money funding a family with wealth beyond most of the public’s imagination? They afford them the ultimate status – Posh and Becks don’t get treated that well. Shouldn’t that be enough? Why should we pay for them?
Well, here’s the good news, I don’t. I reside in Spain. A country where the royal family is paid a relative pittance in comparison. I still feel that the role of the royal family is cruel, but they don’t even get showered with money to compensate for it here.
Whenever they do public events, I’m amazed that anyone can look them in the eyes. I just imagine if I ever found myself facing the Spanish king, I’d have to ignore his enquiry of if I’d come far and try and palm him a 10€ note, while whispering “there you go Felipe, get yourself a sandwich and a hot drink, actually here’s another, no, really, go on, take it, get the girls a couple of Kinder eggs on the way home”. Okay, I’m over-egging the pudding a bit, with the king apparently receiving €269,296 per year and the queen €148,105 out of a total budget of €8,431,1509, but relatively speaking, they’re an absolute bargain compared to the Windsors.
In most Western countries with royal families, they serve a ceremonial purpose only. They don’t need to be or do anything special. Why rely on a bloodline to decide who becomes the head of state?
Big Brother, I’m a Celebrity, Get Me Out Of Here, Love Island, The Great British Bake Off, RuPaul’s Drag Race and The Masked Singer are just a few examples of the popular genre of reality TV shows.
The blueprint has been created. Once a year, the public gets to vote for the new king and queen from a mix of popular celebrities and fun normies. Society gets 12 weeks of prime-time entertainment and then the public vote to pick the new king and queen for the year. And we both know the most entertaining years will be when the mischievous public pick a royal couple who don’t get on, like in the good old days, but there’ll be no Henry Vlll style beheadings as an easy way out.
Throw in advertising revenues and overseas resale rights and this would work out much cheaper than funding a royal family out of public money and be a fairer system for everyone. Fairer for the people in the society as they’re no longer being told that this one family chosen by a twist of fate is better than them and fairer to the royals who no longer get born into a fish bowl that condemns them to a Truman Show life.10
Of course, the British people might not want to replace the Windsors, though might it also be possible that the Windsors could choose they no longer wanted to be the royal family?
The Sovereign Grant pays a significant amount of money to the royal family, but that money kind of comes from the royal family. The royal family have wealth estimated in excess of £20 billion11, largely from the Crown Estate that owns a vast amount of land and property across the UK. That Crown Estate is held in trust and the income from it is paid to the British government, who then pay back an amount through the Sovereign Grant that replaced the Civil List.
The Civil List came into being back in 1760 when George lll gave control of the Crown Estate’s income to the government in return for an annual grant. Why would the king in 1760 agree to do that? In fact, why would the king in 2022 agree to do that? Particularly considering that in the 2022-23 year, the estate reportedly generated £312.7 million in profit12, but the Sovereign Grant only pays about a third of that.
The agreement that first came into being with George lll removed a number of financial duties from the king, including the requirement for him to cover the costs of the civil service. Since then, every new British monarch has signed a similar agreement on taking the throne, including King Charles lll in 2022. I can certainly see the attraction for the new king to sign. In 2022 alone, the salaries of all civil service workers totalled £16.6 billion.13
Now, I’m not an unreasonable person, honest. It would feel a bit unfair to expect the king who serves a ceremonial role only, to have to pick up the tab for the whole civil service. Only, it seems that it’s not quite true that he only has a ceremonial role.
Based on an article from 2021, the British monarch has the power to withhold consent for laws that affect the interests of the crown.14 Apparently, a similar power exists for the Prince of Wales too. So both individuals effectively have the power to block any potential new law being passed if it may affect their interests.
Wouldn’t you like that power? You could block any new tax increases that would affect you.
But no, as is so often the case, the wealthiest and most powerful in society are the ones who get special treatment.
It’s Not What You Know, It’s Who You Know
The death of Queen Elizabeth ll offered what could have been a good opportunity to ask the British people how they felt about the role of the Royal Family in a modern Britain. A time for frank and open discussion about whether a monarch as the head of state still makes sense in a country that has changed dramatically in the many centuries since James l styled himself as the first king of Great Britain.
However, when you move in the right circles, you get treated a bit differently.
The saying that it’s not what you know, but who you know, goes a long way to explaining how it is that those who are born into poor families are more likely to become poor adults, while those born into rich families are more likely to become rich adults.15
This stagnation of wealth means that contrary to what many believe and claim, just working hard isn’t a guaranteed pathway to wealth. Wealth doesn’t automatically flow to those who work hard and provide the greatest value to society. On the contrary, one brilliant, ruthless or lucky entrepreneur can generate wealth that gets passed on for generations, even if the descendants couldn’t organise an orgy in a brothel.
In addition to just having access to family wealth, wealthy individuals will mix with other wealthy individuals and wealthy families will mix with other wealthy families. When you know people, people will open doors for you.
The pandemic gave us some fine examples of this in the UK. The British government led by Boris Johnson instigated a “VIP Lane” to allow people to recommend companies that could help with supplying personal protective equipment and other items required in bulk to face up to the challenges of the pandemic. When I say people, I don’t mean people like you and me, of course, I mean people like government ministers and peers.
In fairness, I guess we can expect these people to mix in more privileged circles than Joe Public and they’d be much more likely to have an address book filled with contact details of the kind of experts and professionals you’d need to source vital supplies during an international catastrophe.
Imagine, how lucky was the UK to have such a visionary Health Secretary as Matt Hancock who was able to see that the landlord of his local pub would be an ideal supplier of surgical masks?16 Someone at the Ministry of Health must have had even greater vision, realising he wasn’t the man to supply masks, he’d be a much better supplier of test tubes for testing kits, even though apparently he had zero experience of supplying medical supplies. That’s probably why they limited his contract to just a reported £30 million, you know, in case it turned out the skillset of a pub landlord doesn’t transfer across to medical goods supplier as well as we’d all expect it would.
To be clear, I don’t believe there are any concerns over how that contract was fulfilled, which is refreshing considering the UK parliament’s own site claims that in the first year of the pandemic, £4 billion of purchased personal protective equipment (PPE) will be destroyed without being used, at least some, if not all, because it didn’t meet requirements.17 About a quarter of that junk PPE was reportedly supplied by businesses that had been referred through the VIP Lane and what makes this worse is the claim that VIP Lane suppliers were paid 80% more per unit than suppliers sourced through more conventional routes.18
But why give such a large contract to a pub landlord? Someone seemingly with no relevant experience? Okay, there is something that makes him more qualified than being a pub landlord suggests. He’s also the director of a plastic products manufacturer that reportedly normally supplies the catering industry, but perhaps the move to plastic test tubes isn’t a big step. But why should being pals with a senior government minister give one business a foot in the door that other businesses wouldn’t have had?
At the start of the pandemic the government had the attention of the whole country. Couldn’t they have easily listed all their requirements online and offered all suitable British businesses the opportunity to put themselves forward for those contracts?
Did they have a civil servant spend a few hours on Alibaba, GlobalSources, DHGate or any of the other directories of off-shore suppliers to see if they could source them more cheaply? Maybe they could have found their own supplier and kept the supply in-house.
At least one person in a position of power felt keeping things in-house was the way to go.
No doubt many people in government could learn from the conduct of the Conservative peer Michelle Mone.
Or could they?
It’s reported that in May 2020, Mone introduced a company called PPE Medpro, that had only been incorporated that same month19, to the minister Michael Gove and the peer Lord Agnew.20 The company was awarded two contracts to supply PPE for a total of £202.5 million, which the government has acknowledged resulted from a VIP Lane introduction.
Despite journalists finding evidence suggesting that Mone and her husband Doug Barrowman were both involved with PPE Medpro, Mone’s legal representatives initially denied she had any connection to the company. Barrowman went on to be paid at least £65 million by PPE Medpro, £29 million of which was reportedly transferred to an offshore trust that benefits Mone and her children.
In late 2023, after several years of denying any connection to PPE Medpro, Mone changed her tune and admitted involvement with the company.
The National Crime Agency has been investigating Mone and Barrowman since May 2021 and in late 2022 the UK government sued PPE Medpro for £122 million plus costs for supplied medical gowns that were rejected earlier that year.
Why should someone like Mone and her husband, who already had great personal wealth, be given the opportunity to bid for and profit from contracts simply because she had access to members of the government?
One last stir of the spoon on COVID, go and download a copy of Private Eye’s Profits of Doom report21 – they offer it for free. If you read it all, it should make your blood boil, but if you’ve not got the time, just head to the last page. Look at that table that shows how some businesses became much more profitable while fulfilling contracts early in the pandemic.
Of course, we should be grateful to those who stepped up and helped supply PPE and other essential items that were fit for purpose.
But compare the vast wealth that some people gained with what the National Health Service’s nurses and other essential workers got. Remember how earlier we saw many nurses had used food banks and had difficulty paying to heat their homes? During the pandemic, they were working harder than ever, in jobs that were already demanding. Some had to separate themselves from vulnerable family members for months and some even lost their lives to a virus they knowingly surrounded themselves with on a daily basis.
How were they rewarded?
A weekly session of clapping and banging on pots and pans22, while others were being rewarded with immense wealth.
Does that feel right? Does that feel like a government that has its priorities in the right order?
- https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=GB-US&name_desc=false ↩︎
- https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/families/bulletins/familiesandhouseholds/2022 ↩︎
- In case, like me, you forgot your lessons on different types of averages, we tend to think of mean averages first. An example, if we had 20 people earning 15,000 spondoolix, 43 earning 25,000 spondoolix, 26 earning 55,000 spondoolix, 10 earning 100,000 spondoolix and one earning 10 million spondoolix, the mean average income for those 100 people is 138,050 spondoolix. That figure suggests everyone is golden and doing great. The median average is what the person exactly in the middle of the 100 earns. In this case we need to calculate the mean average of the 50th and 51st people, which is 25,000 spondoolix. So, 138,050 spondoolix vs 25,000 spondoolix – those figures are quite different aren’t they? Perhaps demonstrates how a few super-rich people can make our societies appear to be fairer and more prosperous than they really are. ↩︎
- https://www.census.gov/library/publications/2023/demo/p60-279.html ↩︎
- https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2022 ↩︎
- Table A4-a https://www.census.gov/library/publications/2023/demo/p60-279.html – the calculations use the figures that mark the boundary between percentiles ↩︎
- https://britishheritage.com/royals/royal-family-cost-british-taxpayer ↩︎
- https://www.theguardian.com/uk-news/ng-interactive/2023/apr/20/revealed-king-charless-private-fortune-estimated-at-almost-2bn ↩︎
- https://www.theguardian.com/uk-news/2023/apr/05/windsors-v-borbons-comparing-the-public-pay-of-european-royal-families ↩︎
- https://www.youtube.com/watch?v=dlnmQbPGuls ↩︎
- https://www.investopedia.com/ahead-of-king-charles-coronation-here-is-the-british-royal-family-s-net-worth-7486580 ↩︎
- https://en.wikipedia.org/wiki/Crown_Estate ↩︎
- https://www.nao.org.uk/wp-content/uploads/2023/11/civil-service-workforce-recruitment-pay-and-performance-management-summary.pdf ↩︎
- https://www.theguardian.com/uk-news/2021/feb/07/how-queens-consent-raises-questions-over-uk-democracy ↩︎
- https://www.wilsonquarterly.com/quarterly/_/why-rich-kids-become-rich-adults-and-poor-kids-become-poor-adults ↩︎
- https://www.dailymail.co.uk/news/article-9753299/Pub-landlord-won-Covid-contract-lobbying-pal-Matt-Hancock-buys-1-3-million-manor.html ↩︎
- https://committees.parliament.uk/committee/127/public-accounts-committee/news/171306/4-billion-of-unusable-ppe-bought-in-first-year-of-pandemic-will-be-burnt-to-generate-power/ ↩︎
- https://goodlawproject.org/vip-lane-contracts-inflated-by-925m/ ↩︎
- https://find-and-update.company-information.service.gov.uk/company/12597000 ↩︎
- https://www.theguardian.com/uk-news/2023/dec/17/how-the-michelle-mone-scandal-unfolded-200m-of-ppe-contracts-denials-and-a-government-lawsuit ↩︎
- https://www.private-eye.co.uk/special-reports/profits-of-doom ↩︎
- Okay, British nurses also received a one-off award in their 2023 pay settlement that was in part to recognise their work during the pandemic, but it still doesn’t compare to the wealth of those business people – https://www.nursingtimes.net/news/workforce/more-nurses-to-receive-government-funded-covid-bonus-25-03-2024/ ↩︎