The Times rich list – What do they do with their money?


Lord Snooty, or Jacob Rees-Mogg as he is now known, would be appalled at this article. Perhaps that is a good reason for reading it!

Every year when the Times Rich list comes I always ask myself the same question, “What the hell do they do with all that money?” This year it is apparently important because the people at the top of the list are ‘self-made’ and not inheritees. This, apparently is to be lauded because of all the jobs that they have created and the opportunities that they have created for all of us.

That may, or may or not be a good thing. I still do not know, however, why they need to earn 100s of £millions every year or acquire £20 billion+ in wealth which is far beyond the total asset value of some middle-sized Countries.

I have always made it clear that I am a very lucky person. I am now semi-retired and own (jointly with Erica) our own house, car, belongings. We have nothing on tick, owe nothing to anybody, own our own (small 5 year-old) car and can afford to treat both ourselves and our children and grandchildren occasionally. Others have worked as hard as we have and not been so lucky. Increasing numbers of good hard-working people are in debt. Sometimes it is just circumstances; sometimes its their own stupidity but mostly it is because they have never had the breaks in life to give them a better start in life and an economic system which rewards one type of work much more than other types of work.

So, let me return to my original question, what do they do with all that money. Despite what is often said about me by the Labour Party even when I was at my earnings peak I never earned anything like £100,000 a year and most years didn’t earn anything like half that (even adjusting for inflation). So, what would Erica and I do if we had a lot more money than we do now? Nothing different at all. When you have a house that you love, a reliable car, can afford holidays and have a bit put by for a rainy day what does more money actually achieve for you?

Well we could get a bigger or better house. We have already got four bedrooms for two of us and we really only need one bedroom unless we have visitors or one of us is snoring! We could get a bigger, more powerful car but our current car (yes, we only have one small one now) only does 7,000 miles a year mostly around the City. I have seen recent adverts for £250,000 BMWs and regard them as obscene. We could help build up organisations which help create jobs, money and security. We have spent all our lives doing that we worked to provide better education, schools, environments, housing, transportation etc both in our public roles and in our private jobs.

We could give more money away but already do give to worthy causes. That of course, is what the super-rich do. They choose which worthy cause to support. That is their choice which meets their preferences and not necessarily the wider views and needs of society as a whole. Look at the amount give to ‘good causes’ like the Royal Opera House and you will see that a lot of big donor charitable giving goes to things that are desirable but not essential. Much of it goes to causes in London and the South East where many of the rich live albeit that much of their earnings comes from delivering goods or services in the rest of the UK.

The best way to ensure that all available money is used for genuine good causes is firstly, to tax people fairly, properly and at the appropriate level. I actually believe in a higher rate of taxation. Tax is a fair way of redistributing available wealth. I don’t believe in huge taxation or going back to the 95% income levels which the rich simply side stepped but I certainly believe that the 50% income tax rate should be returned to and a review of tax breaks for individuals, partnerships and companies should be reviewed.

In particular we should take on the Googles, Facebooks and UBERs of this world who, legally, avoid tax by moving money around the World in complex transactions in far flung Countries in an attempt to reduce their tax liability where their profits are earned.

We could also exercise far more constraint in earnings. When I chaired a housing association we had a rule that our most senior member of staff would only earn 8 times the earnings of the lowest paid worker on a full-time equivalent basis. Perhaps that is a little harsh for wealth generators. Perhaps we should make it a multiple of 15 that would mean a top salary of about £225,000 a year. With a pension that is a good amount which would keep almost everyone content.

It would also deal with the problems of investment. You would not need rich people to invest because money would be kept inside companies to enable them to invest themselves.

I would suspect that if Lord Snooty (or Jacob Rees-Mogg as he is now known) saw this he would be appalled and think I am some sort of common Commie chappy! Well, I am not. I believe in a caring capitalist system of the type we see in the Nordic Countries and Germany where wealth creators are well but not opulently rewarded and where the difference between bottom and top earners is much less than here. Germany is the most successful business-oriented Country in Europe so we can show clearly that the links between high pay and high performance in commerce and industry are, at best, tenuous.

As a liberal I believe in fairness but have a particular understanding of what that means. It means equality of opportunity; it means a reasonable distribution of assets and wealth created and it means creating a society in which every single citizen gets a better life.

These are the principles that have kept me in politics for the past 51 years and will, doubtless, keep me going for a few more years yet!!

About richardkemp

Leader of the Liberal Democrats in Liverpool. Deputy Chair and Lib Dem Spokesperson on the LGA Community Wellbeing Board. Married to the lovely Cllr Erica Kemp CBE with three children and four grandchildren.
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2 Responses to The Times rich list – What do they do with their money?

  1. Tim says:

    Taxing the high earners is not going to touch the super rich who hold wealth. How to tax wealth when money is so fluid, moving from tax haven to tax haven with fluidity?
    A difficult problem.

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