A greater role for inheritances, and wealth in general, will be a central feature of 21st century Britain, shaping the lives of generations young and old.”

Jack Leslie, senior economist at the Resolution Foundation

Hats off to Michael Gove, who made a cracking good start in launching his levelling-up White Paper last week. Bearing in mind the short-term horizon of most politicians, his twelve-point mission statement for a fairer society represented best efforts for state-intermediated and funded solutions.

But, as some commentators reflected, there are issues of individual empowerment which need addressing. Writing in The Times the following day, a consultant paediatrician Anthony Cohn wrote “Any levelling up efforts are to be lauded but as well as thinking on a population-wide level we need to consider more individual issues”. Meanwhile Rev. Dr. Peter Mullen wrote “Sound policy ought not to be the application of poultices from above to alleviate perceived social inequalities, but rather to encourage people to help themselves”.

These comments point to two aspects missing from the mission statement: direct participation in wealth creation, and inter-generational rebalancing: a strategy for inheritance.

There was an interesting irony in the simultaneous release of an inheritance survey from the Resolution Foundation, whose senior economist (quoted above) pointed to the need to look much closer at inheritance for medium/long term solutions.

So in this commentary we build on these observations in order to show how the move to a more egalitarian form of capitalism could provide a real backbone for the levelling-up agenda.

There are some refreshing new lines of thought in the levelling-up approach announced by Michael Gove, many of which feature the more effective outcomes assessment process which has been a consistent and welcome feature of Government since the coalition took power in 2010. The measures proposed to track success in levelling up reflect this: for example, there's at last a welcome move from using GDP per capita (something we called for nearly two years ago), and life expectancy has also been highlighted as one of the key indicators of regional success.

Education and skills feature heavily in the mission objectives, with a real focus on reading, writing and maths. It is planned that 90% of young people should achieve the expected standard, and the percentage of children meeting the standard in the worst performing areas should increase by a third. At present, 35% of young people leave school without the basic qualifications of a grade 4 (C grade) GCSE in English and mathematics.

And as if to make a direct riposte to Bank of England Governor Andrew Bailey, the proposals envisage pay and living standards rising across the UK.

But much of the strategy is understandably looking at a ten-year horizon, whereas the move to a fairer and more equitable society means looking seriously at inter-generational rebalancing - and that means a putting in place a new Strategy for Inheritance.

One of the great, arguably redeeming, aspects of humanity is our life cycle: the fact that eventually we all die, and new generations take our place. This gives us a wonderful opportunity to re-imagine inheritance: because at present, as the Resolution Foundation survey shows, it is primarily focused on cementing-in wealth polarisation. Meanwhile inheritance levies are swallowed up by central Government, and used for current expenditure.

Our proposals for inter-generational rebalancing need to be taken on board by Michael Gove's levelling-up team. The Share Foundation’s work, showing how starter capital accounts such as the Child Trust Fund can transform opportunities for young people to help them achieve their potential, should be a key part of that new strategy.

HM Treasury's antipathy towards hypothecation is a long-running part of their thinking, but it’s high time for dropping it in the area of Inheritance Tax, which currently raises over £5 billion pa.

Capital built up by individuals for the future should not be used to fuel current public expenditure: rather, we should use such levies to establish starter capital accounts such as the Child Trust Fund for young people from disadvantaged and low-income families. This would ensure that young people from all walks of life will enjoy the benefit of inheritance, combined with training and life skills on an incentivised basis, in order to help them to achieve their potential.

That's the first element of a medium/long-term strategy for levelling up, but it should be accompanied by individual, disintermediated equity participation in the wealth-creating enterprises with which almost all people engage as customers - the tech giants. There's a simple way to achieve this by co-ordinated global regulation; requiring the issue of equity shares in these businesses in return for giving them the right to hold and harvest our data.

It is concepts such as these which the SHARE research project will develop when it gets underway in Cambridge later in 2022. But, in the meantime, we invite Michael Gove's team to start looking at them with a resolve at least to include inter-generational rebalancing into their current proposals. Mass equity participation via shares for data, which will enable people across the world to transition steadily from wages to dividends, will take longer: but it will happen.

If you feel strongly that the UK Government’s levelling-up proposals would benefit from this additional long-term strategic perspective please write in and support these proposals, if possible copying me in at [email protected] 

Gavin Oldham OBE

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