We’re told that there is yet another problem in our green and pleasant land. The racial wealth gap:
According to a recent report by the Runnymede Trust, Black African and Bangladeshi households have only 10p of savings and assets for every £1 of white British wealth.
About which it is necessary to point out just a few things.
Mass immigration is a comparatively recent thing in the UK and we find ourselves entirely unsurprised that recent immigrants are not at the top of the societal, income or wealth distributions. We tend to think that’s not how immigration works, not in the first generation. We would go on to agree that seeing such a pattern in the second and or subsequent generations would be worthy of investigation and possibly rectification.
It is also true that wealth increases with age. Household wealth is largely - actually, outside the top 10% of the population almost entirely - made up of pensions and housing equity. These are things which skew with age. None of us are surprised that a 20 year old has none of either, all understanding that both are built over a lifetime. The Black African and Bangladeshi populations trend very much younger in average age than the white. Whether the gap is purely explained by this we very much doubt but any examination which doesn’t control and correct for it is valueless.
There is a much more thorny problem here as well. Yes, there’s a significant gap in housing equity. We also have a system which subsidises people not to build housing equity. Part of this system is Housing Benefit, part is the system of social housing. These are both - not exclusively, but near entirely - aimed at the poorer sections of the population and at those who rent.
Leave aside entirely whether such should exist or not - we think that some system of subsidy to those who cannot afford housing is entirely fine, even if we argue with aspects of this one - and concentrate just upon the effects.
For what is the complaint here? That people poorer in income are not gaining housing equity. Yet we have a substantial system - Housing Benefit alone was something like £40 billion a year last time we bothered to look - which deliberately subsidises people not to build housing equity. For if you buy you don’t gain the subsidy, if you continue to rent you do.
So, why do the poorer among us not gain housing equity? Because we’re paying them not to do so. Which makes complaining about the absence of housing equity among the poor somewhat obtuse at best.
Of course, there is a solution to this, sell the social housing to the poor at whatever discount makes it financially viable for them to buy it. That produces, over time, the equity and reduces the cost of the subsidy as well. In fact, it solves the wealth gap problem entirely. It’s just that we can’t help feeling that someone has tried this before and the same people doing the current complaining didn’t like that at all.