Some of the super rich do a lot of good work

11:52am Wednesday 30th April 2008

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Few subjects are more fascinating to most people than how much money others are reputed to have.

So the publication of the Sunday Times rich list, out this week, has become a major annual event as we ogle the billions belonging to the fabulously wealthy.

Sussex, as an affluent county with many large secluded houses, features prominently in the list.

Hans Rausing, the packaging magnate who has a modern mansion near Wadhurst, is the seventh richest man in Britain with a fortune of £5.4 billion.

Rausing and his family are selfmade men and women. Old money is nicely represented by Viscount Cowdray, owner of a vast estate near Midhurst.

With the appearance of the list comes the inevitable debate over whether it is right that anyone should have so much money while millions of people all over the world live in abject poverty.

Plenty of people, not all of them socialists, think it is particularly wrong that a Labour Government should encourage the super rich to live in London and nearby counties such as Sussex.

It was only about 30 years ago that Denis Healey, then Labour's Chancellor of the Exchequer, promised to squeeze the rich until the pips squeaked.

Although Healey, now happily retired at Alfriston, denied ever using those exact words, the message of old-style socialism was clear - that you taxed the wealthy heavily to provide money for the poor.

The only trouble with that admirable philosophy was that it didn't work. Wealthy people such as Elton John decamped to America and other countries with less punitive tax regimes.

Some put their money into tax havens. The result was that most of the money owned by these wealthy men and women was not there to tax at all.

Meanwhile the poor took matters into their own hands by striking for more pay in a wave of disputes that make the current industrial unrest seem placid.

Denis Healey was forced to plead ignominiously to the International Monetary Fund for more cash.

The economy collapsed and Margaret Thatcher won an election that brought in the Tories for 18 years.

Healey was only following in the financial footsteps of other Labour chancellors who had taxed the rich at up to 97 per cent since the Clement Attlee government of 1945.

Labour in those days was very good at dividing the economic cake fairly. It was less good at ensuring there was much of a cake to divide.

Tony Blair and Gordon Brown did not make that mistake when Labour returned to power in 1997. They encouraged rich people to base themselves in Britain and presided over a thriving economy that is only now faltering.

The result has been unprecedented spending on the public services, although whether this has been done wisely is one of the issues many people will give their verdict on in tomorrow's local elections.

One criticism of this Labour Government and its Tory predecessors is that they have presided over a widening gap between the rich and the poor.

What these critics tend to ignore is that most of the poor have become very much richer during that time.

I can recall completely running out of cash for a few days during the 1970s, which was scary. I never had a bank account until I was over 40 because there was no money to put in it.

Looking at families I know who are on benefits these days, they are not wealthy but they have more cash and possessions than households who were in work 30 years ago.

By taxing the rich at rates that are not punitive, the Government is ensuring that billions of pounds earned by them enter the economy.

My main reservation about the rich is that I fancy many of them have concocted clever and secretive tax avoidance schemes. The tax authorities need to concentrate their efforts on tackling these set-ups rather than taking the easy option of hammering the vast majority of us on middling incomes.

Rich people can make things happen with their money, often to benefit society. In Sussex, developer John Farmer achieved more throughout the 1970s and 1980s with his building schemes than many a cash-strapped council.

It was Farmer who thought of rebuilding the Hollingbury industrial estate in Brighton, creating the Asda superstore and releasing more than £1 million for a community centre and industry.

His firm also initiated the West Hove Sainsbury's, a development that managed to save most of Benfield Valley as open space. Rod Aldridge, the controversial founder of IT outsourcing firm Capita, has agreed to sponsor an academy school at Falmer in north Brighton.

Not far away, Mike Holland has bought Stanmer House, converting it into a modern country house and spending £5 million on renovation work. Without him, the historic home could well have deteriorated to the point of no return.

Mr Holland is also busy renovating the British Engineerium in Hove, another project that might not have survived without his intervention.

For good measure, he has also helped salvage a school at Seaford.

Even millionaires who are rogues can also have their good points.

Robert Maxwell was justly reviled after his mysterious death in 1991 for plundering the Mirror Group pension fund.

But Maxwell was not given sufficient credit before that for saving the Mirror, in those days the main paper supporting Labour, and for paying the staff good money.

He was also lavish with his hospitality as anyone attending his legendary parties in Brighton during the Labour conference could testify.

Dame Anita Roddick, who started The Body Shop back in the 1970s, was also criticised when she sold out to the L'Oreal Empire by people who said she had abandoned her principles.

But she spent millions on charities such as The Big Issue and Children on the Edge during her lifetime and her will, published recently, showed she had left nothing, having given away £50 million.

Her husband Gordon is in the rich list for having given away a further £36 million to good causes.

The Roddicks followed the example of Andrew Carnegie, the millionaire industrialist who founded a network of free libraries a century ago including the fine example in Hove.

Carnegie, one of the wealthiest men there has been, said: "The man who dies rich dies disgraced." He gave away what in today's terms would have been billions of pounds.

I don't envy the money rich people have and would feel uncomfortable with it. I don't even think they are obliged to be philanthropic.

But I do believe they have an obligation to pay taxes at rates that will not squeeze their pips.

Ironically, had he succeeded in his aims, Denis Healey would have been one of those affected by his own policy.

While not anywhere near the rich list, Healey and his wife Edna live in a substantial country mansion that would not disgrace a millionaire.