Create social wealth funds
Redress the imbalance between public and private wealth with commonly owned investment funds.
The UK is still a wealthy country, but we are failing to use that wealth for the benefit of all citizens. Since 1970, net private wealth has risen from 300% of the size of the economy to over 600% today. In contrast, net public wealth (assets minus debt) has fallen steadily from 50% of national income to become negative today.
Social wealth funds can help to tackle this. They are commonly owned investment funds, managed for long-term growth, with the returns used explicitly for the benefit of all citizens, including future generations. These funds have the potential to tackle some of the UK’s most pressing issues, from providing enough affordable housing, to ensuring universal access to social care and strengthening the system of income support.
There has been a rapid growth in the number of sovereign wealth funds, set up by governments to invest the proceeds from natural resources or trade surpluses. However, the majority of these funds lack social goals, transparent management, or public participation.
Social wealth funds would redress the current imbalance between public and private wealth, thus increasing the resources available to all citizens:
- The funds could be structured to address some of the key issues of our time, including the lack of affordable housing, the under-funding of adult social care and strengthening the system of income support.
- The funds would be a form of national savings that shifts resources from current consumption to long-term investment.
- By socialising a growing proportion of corporate and institutional wealth, they would build a pro-equality force into the economy.
- Each of the funds would increase intergenerational fairness by transferring some resources from current to future generations.
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