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The Sunday Times Rich List 2010
Fortunes in Britain are soaring as the world recovers from the 2008-09 crash. Stock markets are up, the banks are back from the brink and economic confidence is blossoming. As a result, the collective wealth of the 1,000 multimillionaires in the 2010 Sunday Times Rich List has climbed to £335.5 billion, up £77.265 billion on 2009. This is a 29.9% increase, easily the biggest annual rise in the 22 years of the Rich List.
This sharp improvement comes ahead of a general election looming in just 11 days. With hefty public spending cuts and tax rises needed to cut government borrowing — whichever party wins power — the notion of the rich recovering so quickly from the near meltdown could become a potent political issue in the final days of the campaign.
The Labour party’s class warriors have already been attacking the Tories as the party of wealth and distancing themselves from the new Labour years when, in the words of Lord Mandelson, the party was "intensely relaxed about people getting filthy rich" provided they paid tax. The first decade of new Labour was in fact a golden age for the rich in Britain. When the Blair administration came to power in 1997, the wealth of the then richest 1,000 stood at £98.99 billion. By 2008, it had risen to nearly £413 billion. After a savage bust in 2009 it is clearly heading northwards again rapidly. This year’s £335.5 billion is nearly 239% higher than in 1997.
The speed and scope of the turnround in rich fortunes has been remarkable. Take our No 1, Lakshmi Mittal, the steel tycoon. A year ago, the share price for his ArcelorMittal operation was languishing and his fortune was £10.8 billion. The shares have recovered sharply and he is now at £22.45 billion, more than double.
It is the same for the other richest of the rich. Last year we could muster just 43 billionaires. This year it is 53. The wealthiest are also commanding a bigger share of the cake: last year our top 100 were worth just over £131 billion, or 50.8% of the total fortune of the Rich List 1,000. This year, the 100 are worth £182.8 billion, nearly 54.5% of the total.
Strong gains have also been recorded by the world and European rich. The wealthiest 50 in the world are worth £755.4 billion, up £149.5 billion, a healthy 24.7% rise on a year ago. Europe is doing nearly as well: the 50 richest there are worth £419.8 billion, an £88.3 billion rise, and up 26.6% on last year.
The British rich may be recovering quicker than in Europe or the world on average, but that has not made them any more enamoured with government policy in Britain. Recent research from the Institute for Fiscal Studies shows that the incomes of the wealthy have been hit hard by tax in recent years while the poorest sections of society have seen a growth in incomes.
A host of measures has been introduced aimed at the rich and the hefty gains they have made in recent years. Naturally, this has resulted in efforts to protect wealth from the taxman.
There has also been talk of a flight of the rich and their capital to more benign tax regimes. Barely a week has passed without a London hedge fund threatening to move its staff to Switzerland. It may be more threat than reality for the moment, but it is not just the hedgies who are thinking of upping sticks. Jim Ratcliffe announced this month that the headquarters of his Ineos chemicals operation was moving to Switzerland. About 20 executives are setting up shop in Lausanne, on the shore of Lake Geneva, and the company hopes to save £100m tax a year as a result.
Ratcliffe has re-entered the Rich List this year, albeit at a much reduced value — £150m against £2.3 billion in 2008 — after a difficult period when the future of Britain’s largest private company was in doubt because of heavy debt. Talks with its banks saved the day, but at a huge cost in debt repayments, hence the need to save every penny possible on costs.
Guy Hands, founder of Terra Firma, the private equity group, has swapped his personal base to avoid giving more to the exchequer. He moved from Sevenoaks, Kent, to Guernsey and will not visit the mainland except in an emergency. "I have not set foot in the UK since I left permanently... and have no intention of doing so until I have been out of the UK for at least three years," the financier said in court documents that claimed he faced a top tax rate of 64% on earnings from employment from this month.
Others who are far from the City of London may also be thinking of leaving the UK. Paul Sykes, the Yorkshire entrepreneur, has been investing the fortune made from building the Meadowhall shopping centre, near Sheffield, and the like into New Zealand forestry. He could follow on a permanent basis. Sykes is reckoned to have created £1 billion of wealth in Yorkshire and paid more than £300m of that to the Treasury in tax over the years.
Yet for all this talk of flight, foreign tycoons still flock to London as a base. Of our 53 billionaires this year, 24 are foreign-born but based in London and the southeast for at least part of the time. Some of the foreign tycoons who were hit badly last year have come back strongly, thanks to the commodities recovery. Last year, for example, Anil Agarwal, the Indian-born but London-based mining to metals tycoon, saw his fortune fall to £600m. He has stormed back this year with the share price of his Vedanta Resources at an all-time high. As a result, Agarwal’s fortune is up to £4.1 billion.
Not all the rich have emerged unscathed from the global crash. Earlier this month it was reported that Simon Halabi, the property tycoon, had been declared bankrupt over a £56.3m loan he received from the Icelandic bank Kaupthing. Halabi, who was last in the Rich List in 2008, valued at £2 billion, is perhaps our biggest casualty of the economic crisis we have seen thus far.
Property values may now be stabilising, and indeed the sector continues to provide the largest contingent in the Rich List. This year we have 204 entries in property and land, down on last year’s 224. They are led by the Duke of Westminster, the richest British-born person in the list, who still comes in at No 3 with a fortune that we have increased by £250m to £6.75 billion. Housebuilding has yet to recover to its pre-crisis levels and we have not yet seen any increase in construction tycoons. This year, as least, we have 42.
Much has been made of how City bankers and the like are seeking the return of huge bonuses as profits roar ahead. Certainly there are more bankers and hedge fund managers in our ranks on the back of a strong 2009. The financial contingent stands at 170, against 160 last year.
Encouragingly, the one area that seems to have emerged unscathed is industry. The news may be dominated by factory closures but we have 125 industrial fortunes this year against 113 last year.
Industrial entrepreneurs such as Tony Langley are proving that British industry still has life. In 2009, his Nottingham engineering group, Langley Holdings, turned in a 15.4% profit margin. It’s just a pity there are not more like him.
In the regional stakes, still no area can match London and the southeast for wealth creation. Of the top 1,000 entries, 513 are from there, four more than last year.
Scottish wealth is showing a healthy recovery from 2009, with 67 Scots in the top 1,000 against 64 last year. Perhaps the biggest casualty is Sir David Murray, whose Murray International and Rangers football club operations are weighed down by debt. He will bounce back but for now we have clipped him to £110m. In all, our 100 richest Scots, are worth £16.15 billion, up 15.1% on last year’s £14.03 billion. Of the top 100 Scots, 16 are drawn from the Aberdeen area, largely in the oil services sector. They are led by Sir Ian Wood, Scotland’s second richest man, with a £962m fortune.
There are 24 Welsh tycoons in our top 1,000, one more than last year, led by Michael Moritz, the California-based but Cardiff-born private equity man who backed Google with a timely early investment. That helped him to a £977m fortune, just pipping Sir Terry Matthews, the Welsh electronics and telecoms tycoon. The Welsh comprise those based in Wales and others born in the principality but working in London and the like. The overall wealth for the 24 Welsh rich has risen 33% this year to £6.57 billion.
The British rich may be feeling more prosperous but across the Irish Sea, the outlook is still bleak. Ireland’s economy went from turbocharged boom to acute crisis in a little over a year. Not for nothing is Dublin dubbed Reykjavik on the Liffey, such is the parallel with Iceland’s collapse.
The Irish list is a unique look at an all-Ireland economy and recognises no borders. We are able to keep the list at 250-strong thanks to the numbers from Northern Ireland and the Irish-born tycoons beavering away in Britain or elsewhere in the world. Our Irish No 1, Hilary Weston, remains at the top with a family fortune that has stood firm at £4.5 billion on the back of a recession-proof food operation based in Canada.
The overall wealth of the top 250 in Ireland is down from £36.21 billion last year to £34.55 billion. The number of Irish billionaires has also decreased, from five to four. Despite the drop in total wealth, the threshold for entry to the Irish rankings has risen slightly, from £30m last year to £31m. However, 40 of the top 250 in 2009 have not come through the turmoil with sufficient wealth to make this year’s Irish Rich List.
The number of women in the top 1,000 has fallen back by one to 99. These include the Norwegian sisters Helene and Marianne Odfjell, with an £875m oil and drilling fortune, who spend much of their time in Britain. Dame Mary Perkins, the driving force at Specsavers opticians, is up from £500m to £810m this year, putting her well on the way to being Britain’s first self-made female family billionaire.
Just outside our top 100 women is Natalie Massenet, who combines fashion and technology in Net-a-Porter, the internet retailer. Our £54m valuation last year was confirmed with the recent sale of the fast-growing business, which netted her more than £50m. Massenet, who will continue to run the operation, makes our top 2,000 list, which will appear next week on the internet. The fortunes of the richest 100 women add up to £37.70 billion.
Our Young Rich List is confined to just 50 names as we are producing a Sport Rich List next week where many of the highly paid Premier League football stars will feature. This year’s list of the richest aged 30 and under is as a result dominated by fashion, film and music. The total wealth of our junior rich is £1.05 billion.
It is encouraging that we have also found some young entrepreneurs, such as Andrew Michael, who has built his £130m fortune on the internet, and Sean O’Connor, who is worth £33m on the back of green investments. These are the technologies of the future and we must hope that others take encouragement from their success.
The youngest person on the list is 18-year-old India Rose James, who inherited a property empire with her elder sister from their grandfather, the Soho tycoon Paul Raymond. The oldest is Sir Bernard Schreier, born in 1918, whose interests stretch from heavy plant to hotels.
While the rich have seen their fortunes recover fast, grim times remain in the wider economy. Crucially, we find that the rich are still opening their wallets for charitable activity. Our annual Giving List shows that the top 100 charitable givers donated £2.493billion last year, down £324m from £2.817 billion the year before.
Although this represents an 11.5% fall, most of the charity accounts relate to the year to April 2009 — a period when the fortunes of the super-rich were plummeting by the day, leading to the 37% fall in their wealth reported in the 2009 Rich List. So, relatively speaking, philanthropy remains buoyant, with several windfall donations establishing foundations that will generate huge sums for generations to come.
Whatever hue of government emerges from next week’s general election, it will lean heavily on Britain’s rich to provide the jobs of tomorrow and the tax revenue needed to pare down national debt. For the continued prosperity of us all, let’s hope the wealthy can rise to that challenge and not opt for a safe life of selling up and marching into tax exile. That would be a pity.