Socialist Worker

The rich are living it up under Blair

Issue No. 1796

THE RICH are still sitting on their hoards of wealth after chancellor Gordon Brown's budget on Wednesday. Britain's richest 200 people were worth £69.3 billion in 1997. They are now worth £102.6 billion. Yet one in three children in Britain are still living below the poverty line after five years of New Labour government.

Britain's richest man, the Duke of Westminster, has wealth amounting to £4.7 billion, according to the Sunday Times guide to Britain's richest 1,000 people. 'I'm not interested in material things. It would drive me bonkers if I thought too deeply about it,' says the Duke. Britain's second richest man is businessman Hans Rausing. He would only have to put his £4 billion into an ordinary building society to watch it increase by £1 million every day.

This is the reality of New Labour minister Stephen Byers's claim in 1999 that New Labour stood for 'wealth creation, not redistribution'. The rich in Britain are only required to pay a tiny portion of their wealth in tax. New Labour has left the top rate of tax at 40 percent. It was 60 percent during Tory prime minister Margaret Thatcher's first eight years in government.

If New Labour just reinstated this 60 percent top rate of tax it would raise at least £15 billion to fund vital public services. But it refuses to do this. New Labour even allows the rich to legally avoid paying the meagre tax that they owe.

Hans Rausing was exposed in the Guardian last week as a model for tax avoidance. Rausing is an 'economic migrant', but not the sort New Labour and the right wing press fume about. He left his native Sweden so he could make money in Britain, where taxes are lower.

Rausing can claim he does not live in Britain, even though he moved into his palace in East Sussex 20 years ago. This means he can make millions but does not have to pay tax if his income and profit gains are stashed outside Britain. Britain is the only country in the world apart from Ireland where this tax manoeuvre is legal.

And the government actually handed out more to Rausing than the little he did pay in tax. He paid a pathetic £149,508 in tax in 1998-9. But he got £219,702 in farming grants and VAT refunds!

'I am not going to allow the tax system to destroy our company,' said Rausing. Just four aristocrats control huge areas of land across London, while workers are priced out of homes. Nurses, postal workers, bus drivers and others who do vital jobs cannot afford to buy or rent homes in the capital.

Yet four families who 'earned' their wealth by theft hundreds of years ago own vast acres and buildings across London. The Duke of Westminster, on top of his £4.7 billion, owns 300 acres in London's prime sites, Mayfair and Belgravia. He also owns 150,000 acres in Scotland and an 11,500-acre estate in Cheshire. Viscount Portman is worth over £1 billion. The 100 acres north of Oxford Street in central London have 650 Portman-owned buildings and 900 tenancies.

Property is just one of the luxuries the rich spend their money on. Helicopters, executive jets, luxury yachts and an array of fast cars are also bought for entertainment. More than 500 yachts longer than 120 feet are now being built to order. Their price is in the range of £100 million each.

Businessman Lawrence Stroll, worth £350 million, spends over £200,000 a week to sail a yacht with 17 state rooms and a crew of 48 people. New Labour is tied to some of the richest men in Britain. The Sunday Times list of Britain's 20 biggest individual political donations shows that ten went to the Tories but nine went to New Labour.

  • Blair appointed Lord Sainsbury, Britain's third richest man, as his science minister. His £3 billion fortune came from the family's supermarket business.
  • Bernie Ecclestone, the boss of Formula One motor racing, is Britain's fifth richest man, worth £2.9 billion. He gave £1 million to New Labour in January 1997, four months before Blair was elected. The government then decided after the election to make Formula One exempt from the ban on tobacco advertising.
  • Lakshmi Mittal is the steel magnate worth £900 million who donated £125,000 to New Labour's election campaign. Soon afterwards he got a letter of support from Tony Blair to the Romanian prime minister backing Mittal as a good buyer for a steel plant in Romania.

There is systematic collusion between the people at the top of major firms and ministers. Government departments are stuffed with businessmen. Firms which make big donations to New Labour frequently then get lucrative contracts. New Labour has shown that it is proud to be the party which defends the wealth and power of the rich. That is why it refuses to raise their tax rates.


They didn't work for their wealth

THE RICH did not get their wealth by hard work. The Sunday Times list reveals that nearly 40 percent directly inherited their wealth. This does not mean that the other 60 percent worked their way up from nothing. Most were able to take advantage of family money to build their wealth.

Brian Souter, who is worth £300 million, used his father's money to set up his first bus company. His business partner in Virgin Trains, Richard Branson, built his first business on a tax fraud. His magistrate father and high court judge grandfather put up the family home as security for his bail.

The rich make their money by exploiting ordinary people. The head of the Alfred Marks recruitment agency and the world's largest agency, Adecco Group, is Philippe Foriel-Destezet. His fortune of over £1.6 billion is built from workers frequently placed into insecure jobs with long hours, low pay and no union rights.

Richard Branson, worth nearly £1 billion, has recently sacked 1,200 workers from Virgin Airlines. Brian Souter has waged a ruthless campaign against rail workers on South West Trains. James Dyson is hailed as a clever entrepreneur for his vacuum cleaner business. Part of his £650 million has come from sacking 939 workers in Britain in February to exploit cheap labour in Malaysia.


If you enjoy Socialist Worker, please consider giving to our annual appeal to make sure we can maintain and develop our online and print versions of Socialist Worker. Go here for details and to donate.

Article information

Features
Sat 20 Apr 2002, 00:00 BST
Issue No. 1796
Share this article


Tags



Mobile users! Don't forget to add Socialist Worker to your home screen.