Sunday Times Rich List 2009: Bonfire of the billionaires wipes out £155bn fortune
From The Sunday TimesApril 26, 2009
THE recession has wiped £155 billion from the fortunes of Britain’s richest 1,000 people, equivalent to more than a third of their wealth.
The unprecedented collapse, revealed in the 2009 Sunday Times Rich List, published today, is the biggest annual fall since it was first compiled 21 years ago.
In a bonfire of the billionaires, the number in this year’s Rich List has fallen from 75 to 43. Between them, people ranked in the top 100 lost £92 billion. Only three saw their wealth increase.
As the not-so-rich complain about tax rises announced in the budget, new figures this weekend suggest the government will have to introduce even higher taxes that will further deplete their fortunes.
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Economists have calculated that public spending in Britain is set to rise to more than 50% of national income, more than when the Labour government had to be bailed out by the International Monetary Fund in the 1970s.
Analysis of the small print of the budget also revealed that the government will need to find an extra £1.1 billion to pay the pensions of retired civil servants and other state workers over the next two years. The cost of providing such final salary schemes will have doubled to £4.6 billion by 2011 in just three years.
The Rich List’s biggest loser, Lakshmi Mittal, has seen £16.9 billion evaporate from the collapse of the world steel market this year. Now worth £10.8 billion, Mittal remains the richest person in Britain.
He has sustained losses of more than three times the level of Roman Abramovich, his nearest rival in the downshifting stakes, who was down £4.7 billion. The Russian’s surviving £7 billion makes him the second richest person in the UK.
The Duke of Westminster is the richest Briton and continues to occupy third position overall with a fortune of £6.5 billion. The duke’s property assets, centred on Mayfair and Belgravia in London, have shrunk more slowly than others, losing £500m in value. Thirty-eight people in the Rich List have lost in excess of this amount.
While some billionaires have slipped into mere millionaire status, others have disappeared from the list altogether. Sir Tom Hunter, worth £1.05 billion last year, has seen his investments in housebuilding, garden centres and retail turn sour. Coupled with his pledge to give his fortune away — he has donated £23.3m in the past year — Hunter no longer makes the Rich List.
Over the past five years the bottom line required for a place in the Rich List has risen from £30m in 2003 to £80m last year. Now a fortune of £55m is sufficient to make the top 1,000.
The Rich List’s combined wealth adds up to £258.27 billion, compared with £412.8 billion last year.
Faced with such harsh economic conditions, the business community has reacted badly to Alistair Darling’s budget announcement of a 50p top rate of tax. Two well known entrepreneurs have today announced their intention to leave Britain as a result.
Hugh Osmond, whose business interests span insurance to pub groups, said he was moving to Switzerland. Peter Hargreaves, who co-founded Britain’s biggest firm of financial advisers, has said that he is planning to leave for Monaco or the Isle of Man.
Tim Waterstone, founder of the Waterstone’s bookshop chain and a former Labour donor, attacked the 50p tax as a “spiteful political move” and described it as a “disincentive to entrepreneurs”.
There is speculation that Labour may lose many of the well-heeled donors it attracted during the so-called “prawn cocktail” offensive of the mid-1990s, when many City types pledged money and support to the party.
Derek Tullet, the City businessman and Labour supporter, said he would not have changed tax rates. “The problem is it is a disincentive to working here and we don’t want disincentives at this time. I think we will lose people as a result,” he said.
In last week’s budget Darling said the size of the state would peak at 48.1% of gross domestic product next year, its highest since the early 1980s. But calculations by economists for the Policy Exchange think tank, using the IMF’s growth forecasts rather than the Treasury’s, show a rise to more than 50%, exceeding the 49.7% crisis level under Denis Healey in 1976.
“We are heading for a frightening situation where the government controls the majority of our national income,” said Neil O’Brien, the director of Policy Exchange.
“All the evidence suggests that this will be very bad for growth and jobs and we run the risk of a crisis. Public spending must be reduced as quickly as possible to put us back on a sustainable path.”
A Treasury spokesman said: “The government’s long-term liabilities, including pensions, are fully affordable each year now and into the future.”
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