Boom has turned to an almighty bust for Britain’s super-rich. Plunging stock
markets and confidence, banking crises and talk of a full-blooded recession
turning to depression have destroyed wealth as never before. Collectively,
the 1,000 multi-millionaires in the 2009 Sunday Times Rich List are worth a
mere £258.27 billion, down a staggering £155 billion on last year’s record
total. This represents a 37% fall, and is easily the worst performance in
the 21 years of the Rich List.
The first 10 years of Labour government under Gordon Brown as chancellor and
then as premier proved to be a golden age for the super-rich. When the Blair
administration came to power in 1997, the wealth of the Rich List 1,000 then
stood at £98.99 billion. By last year, it had risen to nearly £413 billion.
But the bust has proved particularly hard as it is embracing every sector of
the economy. All regions have been hit hard, from north to south by way of
London, long regarded as the one area that could drag the rest of the
country out of recession. Nobody is immune, whatever their wealth or status.
Every figure related to the list this year is heading down. The number of
billionaires has fallen from last year’s record 75 to 43, a near 43% drop.
The bottom line for entry has also fallen sharply, from £80m to just £55m.
The biggest loser of all is our No 1, Lakshmi Mittal, who drops nearly £17
billion from £27.7 billion to £10.8 billion.
Last June, the share price of Mittal’s Arcelor Mittal steel company hit an
all-time high and his valuation rose to about £35 billion. But in the
autumn, the world economy suffered a financial heart attack and simply
stopped. The Arcelor Mittal share price, in common with virtually all
others, dropped like a stone and Mittal saw billions sliced off his wealth.
Sir Philip Green, Britain’s top retailer, may have enjoyed huge success with
the recent opening of his first Topshop in Manhattan, but even he admits
that the value of his Bhs and Arcadia brands has taken perhaps a £500m knock
this year.
The pain has also been felt by the international rich. The richest 50 in the
world are worth £605.9 billion, down £117.5 billion, which represents a
16.2% fall on a year ago.
Europe is doing even worse: the 50 richest there are worth £331.5 billion, a
£101.6 billion drop, and down 23.5% on last year.
That the British rich are suffering much harder than their peers abroad should
come as no surprise. The wealthiest in Britain have been concentrated in
financial services, retailing and property, which have all taken a fearful
pounding in the past year. Also, London became home to many billionaires
from abroad attracted by the lifestyle, the welcome offered by the
government, and the sophisticated financial services infrastructure. The
government has introduced tax measures that have hit these so-called
non-domiciles, and some responded by returning abroad.
Some of the foreign tycoons have also hit their own turbulence, which has led
us to cut them out of the list or severely downgrade them. Roman Abramovich,
the Chelsea owner, keeps his position of second on the list although his
fortune has fallen by more than 40%, from £11.7 billion, to £7 billion on
the back of collapsing share prices in his steel and other investments.
Other Russian or Icelandic rich have just about been wiped out or are locked
in talks with banks or their governments over bailouts.
Property prices may have plunged but we still have a hefty contingent with
their asset wealth concentrated in bricks and mortar or land. This year we
have 224 entries in property and land, down slightly on last year when it
was 231. 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 we have
clipped back by £500m to £6.5 billion.
The collapse of housebuilding in the past 18 months is hitting what was once a
phalanx of rich construction tycoons. Two years ago, the 1,000 richest in
Britain included 64 housebuilders. Last year it fell to 50 and this year we
have had another lurch downwards to 42.
