Socialist Worker

Tough times? Spare a thought for the wealthy

Issue No. 2118

Are you feeling the pinch as the credit crunch bites hard? Is Gordon Brown holding down your pay below inflation?

Well, spare a thought for a much-overlooked group who are also suffering – company executives.

A report by accountancy firm Deloitte found that the salaries of the bosses at Britain’s biggest 350 companies rose by a mere 6.2 percent over the past year – down from 7 percent last year.

With captains of industry on an average annual salary of just £1.08 million, a 6.2 percent rise amounts to paltry £66,960 extra a year. Just how is your average company director supposed to cope?

Luckily salaries form only one part of their “total remuneration package”. Bonuses, share plans, pension contributions and “long-term incentive arrangements” mean that fortunes are continuing to soar.

Sam Laidlaw is the chief executive at Centrica, the parent company of British Gas, which last month announced half-year profits of almost £1 billion.

As a reward for arranging a 35 percent increase in gas prices, this year Laidlaw is expecting to be awarded an extra £1 million on top of his earnings last year.

In addition he will be given £366,000 in lieu of pension payments and £64,000 in perks including a company car and medical insurance.

In total, Laidlaw will pocket some £4.8 million.

But it’s not just the energy bosses who have found a way to survive these tough times.

A TUC study entitled Do The Super Rich Matter? compares the fortunes of Britain’s wealthiest today with those of each decade since the 1850s by looking at the size of estates left when they die.

It shows that today’s super rich today are far wealthier than any of their predecessors.

Privilege

In real terms, the biggest fortune until the 2000s was the £36.5 million left by Sir John Ellerman in 1933 – which would be worth around £12 billion today.

Next was the £14 million estate of the Duke of Westminster in 1899 – equivalent to £10.6 billion today.

But the richest man in today’s Britain, steel magnate Lakshmi Mittal, is worth a staggering £27.7 billion.

The report points out it was necessary to be worth £50 million in today’s money to be among Britain’s 200 wealthiest people in 1990, but that now you would need more than £400 million.

When the celebrity rich are excluded, it becomes clear that most of today’s super-rich have made their money not through “enterprise and hard work” but from the difficult job of being born into privilege.

Do the super rich matter? by Stewart Lansley is available from Bookmarks priced £10.99. Phone 020 7637 1848 or go to » www.bookmarks.uk.com


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Tue 9 Sep 2008, 18:55 BST
Issue No. 2118
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