1. 1 ASSETnet: Assets and ethnicity network Dr Omar Khan, Head of Policy Research

2. 2 About Runnymede The Runnymede Trust is an independent policy research organisation fighting for racial justice through:  High quality research and analysis  Engaging communities  Influencing policy

3. 3 About ASSETnet Aim is to spread awareness and raise interest About asset-building policies among race equality and other organisations About ethnicity among those already committed to asset-building Three elements Social media site (please join!) National workshops/events (UK, Germany, Hungary, Spain, Belgium) Policy conference in Brussels (February 2012)

4. 4 Why Assets Matter: Evidence Assets are far more unevenly distributed in the UK than income Anywhere from 10–20% of people have no assets at all Wealthiest 1% owned approximately a fifth of the UK’s marketable wealth... Half the population shared only 7% of total wealth Two-thirds of British households in Britain have less than £3000 in non- housing savings and assets. Housing: 40% of the total wealth in the UK, or £6875 billion, is held in housing. In 2003, half the UK population owned only 1% of non-housing assets. Consequences: less choices, social mobility, ability to provide for children, and social cohesion

5. 5 Why Assets Matter: Ethnicity 60% of Asian and Black British people have no savings at all, twice the rate for white people. Less diverse too.

6. 6 Why Assets Matter: Arguments Social mobility : fair life chances as well as efficient markets require more people to have assets Behavioural : ‘while income feeds people’s stomachs, assets change their minds’ (Sherraden, 1991) Freedom : Expands choices Citizenship ; people hold a ‘stake’ in their society. Integration/Cohesion  Different arguments for asset-building lead to different policies

7. 7 Why Assets Matter: Policies Policies in UK focused on savings and behavioural arguments (start habit). Not redistributive, citizenship or freedom. Child Trust Fund, Saving Gateway : scrapped NEST: auto-enrolled pensions scheme for low-income. Growth and security Housing : shared ownership, other schemes Asset inequality and taxation : No asset-based tax policies for low-income people; tax incentives on ISAs and pensions as asset-based policies for upper income quintiles Inheritance tax and wealth tax? Council tax or property tax? Revenue used to provide assets for all? Shared or collective ownership : a variety of policies for everyone to own in (part-)publicly owned institutions or in public goods. Details important.

8. 8 Ethnicity and asset-holding in the UK Evidence that 60% have no savings Bangladeshi and African with less than one tenth White British asset-holding Following slides explain labour market experience However, might expect migrants to have less No intergenerational inheritance Labour market access: social networks, qualifications, (perceived) language But evidence that British-born BME men more likely to be unemployed than foreign born fathers (Heath and Li)

9. Low income and ethnicity Bangladeshi (65%), Pakistani (55%), White British (20%) Reflects unemployment but also poor quality work Income poverty rate by ethnicity, 2002-5

10. Self-employment and ethnicity Pakistani and Bangladeshi with highest rates Most British-born groups lower than migrants, except above Discrimination as cause? In recruitment (DWP survey), and progression (RfO research) Proportion of working population in self-employment by ethnicity, 2007 051015202530 White All BME Pakistani Bangladeshi Chinese Mixed Indian Other Black Black African Self-employment (%)

11. 11 Ethnicity and self-employment by sector Chinese (72%) and Bangladeshi (63%) much more likely to be in Catering. Pakistani (36%) and Black African (17%) much more likely to work in Transport. Higher income volatility, greater chance of business failure, and no employer pensions contribution or other benefits Industry of self-employment by ethnicity (males), 2001 0%20%40%60%80%100% Chinese Bangladeshi Indian Pakistani White Black Caribbean Black African DistHotelCaterManufacturingTransportConstructionFinanceOther

12. Conclusion: Questions for microfinance Do we want ‘repeat’ customers? Danger is that lose best clients as they build up savings or improve credit score or business skills to get ‘mainstream’ loan. Why people need microfinance: in part because they have no savings or assets Can microfinance institutions develop alternative policies, including short-term AND long-term savings? Should all assets be ‘leveraged’ If focus on self-employment and entrepreneurship, how ensure social protection and rights, in particular pensions? Are we reaching migrants and ethnic minorities, or are they being channeled into particular sectors? 12

13. 13 Contact us To discuss our research and work, please contact Omar Khan omar@runnymedetrust.org 020 7377 9222

14. BME people and pensioner poverty Risk of pensioner poverty by ethnicity, 2007-8 All (18%), Black Caribbean (30%), Pakistani & Bangladeshi (49%)

15. Why are BME people poor when older? WhiteEthnic minorities % with private pension (in employment) 5339 AllEthnic minorities % building entitlement to S2P7565 % with no savings Black or Black British63 Asian or Asian British 60 All 33 Less likely to have pensions… Less able to compensate with other assets – Savings Home ownership (2005-6) (2005)