Some staggering statistics greeted Smarta when it opened its copy of The Sunday Times Rich List on Sunday morning. According to Philip Beresford, who compiles the list, the overall wealth of the 1,000 richest people in the UK is £258.27bn – 37% lower than last year which, according to Beresford, is ‘easily the worst performance in the 21 years of the Rich List’.
What else has befallen the nation’s wealthy during the recession? Well, the number of billionaires has fallen from 75 to 43, a drop of almost 43%. Beresford adds the UK’s rich are feeling the effects of the recession harder than those abroad – mostly because our wealthiest have made their money in the financial services, retail and property, ‘which have all taken a fearful pounding in the last year’.
Lakshmi Mittal, the richest person in the UK for the second year running, has seen his wealth drop by 61% over the last 12 months, while mining tycoons Vladimir Kim and Oleg Novachuk have both seen their assets devalue by more than 80%.
“Egad!” Smarta hears you sob. “The nation’s multi-billionaires have had a zero knocked off their colossal fortunes! How will they survive without their superyachts? And more to the point – how will they afford Alistair Darling’s 50p income tax?”
Cue grumblings from Bristolian finance entrepreneur Peter Hargreaves (number 237 on the list with a wealth of £375m) , who folded his arms, stamped his foot and told The Sunday Times: “I won’t pay. I’ll leave.”
Such protest doesn’t exactly come as a surprise from one of the country’s highest earners, but Smarta isn’t entirely convinced the assertion by Hargreaves and other entrepreneurs including Waterstones founder Tim Waterstone that the tax, which will affect anyone earning more than £150,000, is a ‘disincentive to entrepreneurs’ is entirely accurate.
Almost three-quarters of businesses in the UK are sole traders which make just 8% of the national turnover. During a recession, we’re pretty sure the number of business owners able to pay themselves more than £150,000 will be insignificant - most will just be trying to stay afloat.
Credit, then, goes to Yo! Sushi founder Simon Woodroffe who told The Times paying taxes is the responsibility of the rich. “Does it stop an entrepreneur? I think not. I met very few people who did it for the money. I’ve met a lot who did it for the fear of not having any money.
“The 50% tax rate is the right thing to do. It’s our faults. Anyone who is earning more than £150,000 is very rich and ought to spend more.”