The rise and rise of Britain’s billionaires
Do billionaires make their wealth at the expense of others? Yesterday, The Sunday Times published its annual Rich List, including a record 151 billionaires. Where does their money come from?
There were some famous faces; some new records broken; some rising stars; and some falls from grace.
For 31 years, The Sunday Times has been compiling an annual list of the 1,000 wealthiest people in the UK. Yesterday, it published the rankings for 2019.
Those at the top are still getting richer. The combined wealth of everyone on the list is a record £771.3 billion. You need £120 million to be included, and there are now a record 151 billionaires in the UK. (However Top Shop’s Philip Green, whose fortune has halved in the last year, is no longer among them.)
But where does all this money come from? Many people on the list are entrepreneurs who have built successful businesses — like number five on this year’s list, the inventor James Dyson. Others are entertainers like Ed Sheeran, now the richest young musician in the UK.
They have earned money the way most people do: through work. They have drawn on their talents to create something people want — whether that’s vacuum cleaners or pop songs.
But there are other ways of getting rich. Britain’s youngest billionaire is also its wealthiest aristocrat: 28-year-old Hughie Grosvenor, the 7th Duke of Westminster, who inherited a £10.1 billion fortune from his father.
And scanning the list for the source of people’s wealth, one word appears over and over: property.
This falls under the second way of earning money, as explained by the historian Rutger Bregnan: through being a “rentier”. He defines this as: “Leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit.”
In the past, this might have meant building a tollgate on a bridge, and forcing people to pay to get across. Today, he says, rentiers are bankers, property moguls, or Silicon Valley executives whose platforms generate huge amounts of money using other people’s content. They do not make anything new, but their wealth soars anyway.
Get rich quick?
This is unfair, say some. Those at the top of society use their wealth to generate even more money for themselves. It rarely trickles down to ordinary people. The Sunday Times wrote that many of the rich are preparing to move their money abroad if Jeremy Corbyn is ever elected, to avoid paying taxes. The system is broken.
But is there really anything wrong with protecting and increasing your own fortune? Surely most of us want to do the same, regardless of how much we have? Besides, the same people being slammed as “rentiers” are often working hard to create jobs for others. This helps to drive economies (and societies) forward.
- Is it immoral to be a billionaire?
- Are there good and bad ways of earning money?
- Imagine you have sold an app you created for £1 billion. What would you do with the money? How much would you spend, and how much would you save? Work out a plan and share it with the rest of the class.
- Research more about how one of the people in this article made their money. Write a case study which draws lessons for those who might want to follow in their footsteps.
Some People Say...
“Wealth consists not in having great possessions, but in having few wants.”Epictetus
What do you think?
Q & A
- What do we know?
- The list is based on the journalists’ estimates of the minimum wealth of Britain’s richest 1,000 families. “We measure identifiable wealth, whether land, property, racehorses, art or significant shares in publicly quoted companies,” the paper explains. “We exclude bank accounts — to which we have no access — and small shareholdings in a private equity portfolio.”
- What do we not know?
- How much money the people on the list really have. “The actual size of their fortunes may be much larger than our figure,” the paper admits. We also do not know if there are any people missing from the list. The paper invites you to get in touch to suggest names for next year’s rankings.
- At the very top of the list are Sri and Gopi Hinduja, worth £22 billion. Their family’s business has interests in oil and gas, banking, IT and property. It is the third time the brothers have topped the list.
- Philip Green
- The chairman of the Arcadia Group, which includes high street shops like Topshop and Miss Selfridge. He was forced to pay £363 million into the BHS pensions fund after the business collapsed. He was also accused of bullying, racism and sexual harassment by The Telegraph last year.
- James Dyson
- Worth £12.6 billion (up £3.1 billion from last year). Although he is most famous for inventing vacuum cleaners, Dyson is currently working on electric cars, robotics and AI. He caused controversy by announcing he was moving his company’s operations to Singapore, despite being a vocal Brexit supporter.
- Last month The Guardian reported that half of England is owned by less than 1% of the population.
- Rutger Bregnan
- The historian caused a stir at Davos in January when he criticised billionaires for not paying taxes. (See Become an Expert.)