Who are the Rich? How did they get Rich?
Good news, for some. The rich have got richer. The Sunday Times Rich List 2018 shows that the top 1,000 people in Britain have seen their wealth increase by 10% over the past year to £724bn. Are you 10% better off than last year?
The Sunday Times didn’t bother telling us, but the 6% wealthiest own more than the bottom 40% of the population in the UK. Twenty four million people have just £567bn between them. In fact just the top 20 in the List own £192bn between them, more than the GDP of a majority of the world’s nation states. Grotesquely, the List appeared in print the day after a demonstration organised by the TUC in protest against the background of the biggest squeeze on real wages for ordinary British people since Victorian times. Ten years after the financial crisis real wages are still £24 a week less than in 2008.
For the Sunday Times the 2018 List “marks a milestone.” Out is “old money and inherited wealth.” At the top of the List, the Sunday Times droolingly informs us, is “Jim Ratcliffe, born and initially raised in a council house in Lancashire.”
The Sunday Times runs the classic apologia for capitalism. It “applauds those entrepreneurs who create goods, services and livelihoods for millions as well as the tax receipts needed to educate our children, provide health care and support the less well off and less fortunate.”
Jim Ratcliffe’s main asset is chemical giant INEOS, which employs 18,500 people. Ratcliffe is ‘worth’ £21.05bn, up from £15.3bn last year. Actually INEOS is a privately owned company, and its finances are opaque.
In 2013 INEOS encountered a little cash flow problem. How did Ratcliffe respond? He began by victimising union convenor Stephen Deans at Grangemouth oil refinery in Scotland and then escalated the dispute by imposing a lockout on 1,400 workers. He threatened to close the plant down and demanded a wage freeze, cuts in shift allowances and the tearing up of the company’s final salary pension scheme. Ratcliffe claimed then that the plant was losing £10 million a month; yet he could afford to bribe workers who broke ranks with Unite with bungs of up to £15,000 each. Unite reported that INEOS’s “finances are a mystery”. All the same, Ratcliffe won, and imposed his will on the workers.
Ratcliffe is evidently a successful capitalist. The Sunday Times claims entrepreneurs on their List are creating “the tax receipts needed to educate our children,” etc. In fact Ratcliffe moved INEOS’ HQ to Switzerland to avoid paying tax in Britain. And, as the Independent commented (27.10.13), “INEOS is a corporate giant that has legally saved millions from the greedy clutches of schools and hospitals by operating in up to six tax havens.”
The accounts may be smoke and mirrors, but the assets he has derived from it are real. Ratcliffe owns not one but two yachts. Hampshire II cost $100 million, is 258 feet long with a crew of 23, has a helicopter deck which can be converted into a playing field and a wine cellar with an underwater sea viewing area.
How come Ratcliffe is so successful, apart from dodging tax and busting unions? What do entrepreneurs in the Rich List actually do? According to the Sunday Times panegyric they “create goods, services and livelihoods for millions”. In fact it’s the workforce that creates the goods and services. The owners are only interested in profit.
Dodgy accounting is another way of getting super-rich. INEOS didn’t buy Grangemouth with its own money. Ratcliffe issued a pile of junk bonds and loaded the firm with debt. One fact that does seem to stand out is that the company was more than $7 billion in debt in 2013 according to Moody’s credit ratings. This is the classic style of the new generation of capitalists – load companies with debt and then scream that they’re in trouble. The next step is to cut costs by blaming the firm’s difficulties onto the workforce and going after them.
The Sunday Times editorial praises Ratcliffe as a risk-taker. So that's how he gets all that money! He is a risk-taker all right. He risks working people’s jobs and livelihoods in his gambles. Heads he wins, tails we lose.
Others from the List have more traditional sources of wealth. In at number ten is the Duke of Westminster and his family. He owns £9.964bn. What enterprise and superhuman skill did he show to acquire that much? He inherited it. The Duke is a remote descendant of one of “the banditti that came over with the bastard”, as Tom Paine called William the Conqueror. In the eighteenth century one of his ancestors made an advantageous marriage and acquired Belgravia. Simples.
Up at number six is Charlene de Carvalho-Heineken with £11.1bn. If you thought you recognised the surname Heineken, you were right. She inherited a controlling interest in the Dutch brewer.
In at number 66 with a mere £2bn come Sir Philip and Tina Green. We have catalogued their misdeeds before: https://labourrep.com/blog/2018/4/1/melrose-takes-over-gkn. The pair took over the department store chain BHS in 2000 and ruthlessly ran the firm down. They relieved it of £422m in dividends over the next 15 years, sucking it dry. Apparently this is entirely legal. Owners can do what they will with their own and workers’ livelihoods can go to blazes.
In addition to 11,000 employees BHS had 20,000 people dependent on their company pension. The pension fund was in surplus when the Greens took over. After they sold BHS in 2015 it had a deficit of £571m. They both live in Monaco, described by Somerset Maugham as “a sunny place for shady people”. Tax dodging is de rigeur for these ‘top people’. They own a Gulfstream private jet and a 295 feet long yacht called Lionheart – so they’ve got a bigger one than Jim Ratcliffe!
One thing is for sure. Ratcliffe’s two yachts and all the rest of his ill-gotten gains come from the unpaid labour of the working class. Likewise with the Greens’ yacht and private jet. Where else could it all come from?
Do we need these people? No, they are pure parasites. The LRC stands for socialism, where the associated producers will own and control the means of production.