UK billionaires see personal wealth grow by £25bn during pandemic lockdown

Analysis shows the collective wealth of Britain's richest since five days before the coronavirus lockdown at the end of March has risen from £121.57bn to £146.61bn.

It comes as Britain’s economy shrank by a record 20.4% in April as the first full month of the coronavirus lockdown triggered an economic crash three times greater than the 2008 financial crisis.

The decline was the largest since comparable monthly records began in 1997 and was more than triple the previous record fall of 5.8% in March, when the lockdown was imposed late in the month.

The biggest winner according to a study of Forbes data tracking the wealth of billionaires during the pandemic lockdown is James Ratcliffe, the founder, chairman and majority owner of chemical giant Ineos, which has wide North Sea energy interests.

Mr Ratcliffe, whose net worth has soared from £8.75bn to £13.83bn is one of those who have taken advantage of the government scheme to furlough almost 800 members of staff from his luxury hotel groups Home Grown and Lime Wood.

Under the scheme the State covers up to 80 per cent of the salaries of staff if companies keep them on the payroll. The payments are capped at £2,500 a month for each employee.

Hotel chain chief executive and chairman Robin Hutson, confirmed the move to furlough staff in a letter to Prime Minister Boris Johnson last month which called on the government to give more support to the ailing hospitality industry.

The 67-year-old previously moved the Ineos' head office from Hampshire to Rolle, Switzerland, cutting the amount of tax the company paid by an estimated £100m a year in 2010.

Industry and finance tycoons the Hinduja brothers, Sri and Gopi, whose family wealth of £13bn placed them the second richest behind Mr Ratcliffe furloughed some of their 360 staff at Yorkshire-based transport company Optare.

Gopi Hinduja

They saw their fortune rise slightly from £10.26bn to £10.34bn.

Billionaire brothers David and Simon Reuben, who each saw wealth rise from £5.41bn to £5.8bn over the three months, have furloughed hundreds of UK staff across their horse racing, pub, hotel and aviation businesses.

Simon, 79, has lived in Monaco for about 20 years, while David, 81, moved abroad several years ago and splits his time between the French Riviera and Florida.

Around 650 staff were furloughed in March at the Reuben-owned Arena Racing, a company that operates 16 racecourses, including Royal Windsor, Doncaster and Chepstow. A further 100 staff are understood to have been furloughed across the pubs, hotels and aviation businesses, which includes London Heliport and London Oxford Airport.

A Reuben brothers source said that the furloughed employees had their salaries paid in full in April and May as the companies topped up the difference to the government scheme.

The source said that this month the businesses have commenced reopening and many employees have returned to work.

Sir Richard Branson (above) who has furloughed 8,000 Virgin Atlantic staff has seen his net worth rise from £2.7bn to £3.34bn in the three months.

In April he tried to convince the UK government to give his Virgin Atlantic airline a £500m bailout to help it survive the coronavirus pandemic and the economic fallout of the lockdown.

And former Rangers shareholder Mike Ashley, owner of Newcastle United and Sports Direct, who has also applied to the furlough scheme saw his net worth rise from £1.99bn to £2.47m.

Some one in three working age adults are now estimated to be either unemployed, furloughed, or supported through the self-employment income support scheme, while millions more are thought to be on reduced wages.

Mike Ashley

And John O'Connell, chief executive of the TaxPayers' Alliance, said many businesses should be considering paying back furlough money.

"While understandably the government cast a wide net to catch everyone who could be affected by the coronavirus crisis, it’s great to see some businesses now paying back the support offered to them by taxpayers," he said.

"They should serve as an example for other firms using furlough that have come out the other side in rude health.

"For those companies who can return the money but decide not to, or for those which never needed the support in the first place, taxpayers will have long memories of those that helped in the national effort and those that didn’t."

The analysis based on Forbes' data on billionaires worldwide whose fortunes are tied to public shares between March 18 and June 11, are thought to mirror the pre-lockdown stock market drop and steady recovery. On March 23, the FTSE 100 fell to its lowest point for nine years and a raft of UK firms warned of earnings hits amid the spread of the coronavirus.

The analysis shows that since March 18, none of the UK billionaires saw any dent in their fortunes and 32 out of the 45 had seen a rise.

Aberdeen-based oil tycoon Sir Ian Wood and his family were among 13 that showed neither a gain or a loss during the lockdown, with the analysis showing Scots family retains a fortune of £1.2bn.

Big winners include Tom Morris, the 66-year-old founder of the discount chain Home Bargains, which has been able to remain open to customers during the lockdown. His net worth more than doubled from £1.43bn to £2.94bn.

Also doubling her money is Denise Coates, the founder and joint chief executive of Bet365, one of the world's largest online gambling companies. Her wealth rose from £3.58bn to £7.16bn - an increase only bettered by the Ineos supremo.

Even Ireland-based Celtic shareholder Dermot Desmond made a small gain, with net worth rising from 1.6bn to £1.68bn.

A similar fortunes analysis in the US found that Amazon's Jeff Bezos and Facebook's Mark Zuckerberg had the biggest gains between mid-March and mid-May. Mr Bezos adding $34.6bn (£27.62bn) to his wealth and Mr Zuckerberg added $25bn (£19.96bn).

The government has, meanwhile, been urged to develop an ambitious Plan for Jobs to reverse a record rise in unemployment triggered by the coronavirus crisis.

According to research by the Learning and Work Institute,a rise in unemployment would have been sharper still had it not been for the Coronavirus Job Retention Scheme.

However, the gradual withdrawal of the scheme risks triggering a ‘second wave’ of unemployment, as many of the 8.9m furloughed workers will be unable to return to their jobs, the analysists say.

Researchers felt that even if the economy quickly rebounds, it is likely to be years before employment returns to its pre-crisis levels.

Last week the Organisation for Economic Co-operation and Development said the UK economy would shrink by more than any other developed country as businesses struggled to recover from the pandemic. It predicted GDP would contract by 11.5% in 2020 or 14% if the virus returned and forced the government into a second lockdown.

The Bank of England has estimated GDP could contract by 25% in the second quarter and unemployment more than double, as the country plunges into the deepest recession for more than 300 years.

An Ineos spokesman said: "The hotels business is following Government guidelines and as soon as it is allowed to re-open it will do so. It plans to retain all hotel staff.

"The Group is supplementing wages and has been since day 1 of the lock-down. Those that continue to be able to work in the hotels group maintain the facilities and kitchen gardens, producing food for local people and NHS workers."

The spokesman stressed that none of its 3000 staff working at its UK chemicals sites have been furloughed.

A Virgin Group spokesman said: “The increase in Richard Branson’s net worth is as a result of the rise in the share price of Virgin Galactic since March.

"Over the past month Virgin has sold 37.5m shares in Virgin Galactic. Virgin Group intend to use the net proceeds from this sale to support the Virgin companies impacted by the Covid-19 pandemic."