by Real Business - Thursday, 30th August 2007

First there were the copies of the his n' hers Nationwide Building Society accounts - each containing £1m. Then later, a Barclays Private Bank statement showing that a family discretionary trust was worth around £11.7m at the end of 1999. In between, a shoal of accountants' letters certifying the value of personal assets at £30m or more. This is just some of the recent evidence volunteered by Britain's multi-millionaires in recent times as proof of their worth for inclusion in the annual Sunday Times Rich List. It's extraordinary that people actually want to appear in such a listing, let alone volunteer this sort of information.
But it's symptomatic of the changing attitudes to wealth and success in Britain that more of this kind of information is being flushed out. Of the 1,000 people featured every year from Britain's super-rich, about 250 now actively co-operate in their valuations - nearly half the self-made fortunes. Indeed, in Blair's Britain perhaps it is cool to be rich and successful.
Yet this is the country where the term "fat cat" has now become part and parcel of everyday language, where the politics and economics of envy were raised to a fine art through the post-war years, and where we still almost glory in the rise and fall of any business tycoon. Twenty years ago, the word entrepreneur was almost non-existent, while the image of the tycoon conjured up an Arthur Daley figure complete with camel hair coat, slightly dodgy business and a predilection to go spectacularly bust.
Critics of the tycoon class were given huge ammunition by the likes of Sir Bernard Docker, whose lavish lifestyle in the fifties was funded at the expense of driving his engineering business to the wall. The slightest whiff of lavish spending does still get hackles rising. Just look at the recent orgy of coverage on the collapse of Boo.com, the internet fashion retailer. The press could hardly contain its glee at the way the company collapsed.
Even as Fleet Street tore into the £90m burned by Boo in its short life, there were signs that a more American attitude to wealth and success is perhaps taking root on this side of the Atlantic. Ernst Malmesten, the 29-year-old former poet and Boo co-founder addressed the 250-strong meeting of all Boo's London staff to tell them of the failure and that they were effectively out of a job. What did they do? Lynch him, pelt him, hiss him or give him a verbal roasting? No. They cheered him and quickly silenced a lone heckler.
This is a refreshing attitude to success and failure. In the States, when businesses fail, it's not the end of the world. People pick themselves up, learn from their mistakes and start again. Tellingly, the British government is now trying to turn Britain's bankruptcy laws into something a bit more enlightened, so that bankrupts are not stigmatised as near-criminals and are instead given the incentive and confidence to start again. The Boo crew - young, smart and hip - seemed to embody this can-do attitude, fortified by the fact that in the still booming internet recruitment market, jobs are aplenty. In the windows opposite Boo's London office, a hand-written poster summed it up: "Dear Boo. Don't Jump! We've got jobs."
Of course, it is all about jobs - and more particularly - new jobs. All parties recognise that real sustainable jobs and prosperity come from the successful (and rich) entrepreneur. The Blair regime, having ditched its old ideological baggage, has taken to the enterprise culture with zeal. Any self-respecting entrepreneur - as long as they're well-known and have a nose for PR - is co-opted onto one or other government task force or committee. It's hard to find a single prominent entrepreneur who is out in the cold. From Sir Richard Branson to Sir Alan Sugar (note the handles) they all have a role in the Blair project. Similarly, any award ceremony lauding entrepreneurs and the like will not be without its obligatory government minister extolling the virtues of the winning entrepreneurs and emphasising just how much the government loves them.
In dealing with the likes of Sugar and Branson, government, Fleet Street and the public at large do not show the slightest envy of their wealth. In fact, we haven't done so for the last decade or more. Sugar may face the odd grumble from Spurs fans over the team's need for some of his cash, but this is trivial stuff.
The term "fat cat" has never been applied to the new rich entrepreneurial class, whose success is the result of their own endeavours. There is a distinction made between the successful wealthy entrepreneur and the director of a former nationalised industry who has done well from a deal or a perks package. Cedric Brown, the former British Gas chief executive, was reviled for his package, despite his heroic efforts in turning the business round. And it's open season on any rail operator director, whose every pound of share option gains raises the fury of the media far more than the appalling punctuality of the trains themselves.
Woe betide those who are on the wrong side of the tracks, as Sandy Anderson observed. The managing director of the Porterbrook train leasing company made some £33m personally from the sale of the company in 1996. Cue outrage in the papers and Parliament. His quiet life was rudely interrupted. "It's not very pleasant having 20 photographers on your front lawn," he recalls of the time. Now that Anderson has metamorphosed into a full-blooded entrepreneur, that criticism has vanished. It all goes back to a very British sense of fair play.
But that sense of schadenfreude has not disappeared entirely from the British press and public alike. We may marvel at the dot.com technology and the brashness of the millionaires being spawned or their absurd youthfulness. But the moment things go wrong - such as collapsing share prices (lastminute.com) or a business failure along the lines of Boo, then every problem is gleefully reported in detail.
Witness the hostility heaped upon "poor" Martha Lane Fox and Brent Hoberman, Lastminute's founders. One minute they are the icons of the new establishment, then after the disastrous float, they are virtually pariahs. Londoner's Diary in London's Evening Standard noted that Hoberman had been seen lunching at Cannes and appeared to be quite relaxed about it. An unnamed Lastminute investor was quoted to the effect that he should not be on a "jolly" but trying to jolly along the sagging share price.
If there is a resentment at their initial success and glee at the later fall, it must be something to do with their age, their obvious intellect and their sheer photogenic qualities. Don't we all feel a rush of secret glee when these exaulted gods turn out to be mere mortals after all.
The lesson is obvious: keep a low profile when building an entrepreneurial business. There is absolutely none of that sense of schadenfreude when a low-key West Midlands metal basher or widget maker goes under. We feel sympathetic about his or her heroic struggle against all the odds: high pound, lack of support in government for industry, the cost of energy or red tape etc. But glee at his demise? Never.
But the furore over the collapse of Boo.com and the plunge in the share price of Lastminute.com has not dented that sense of fair play about the whole dot-com economy. The risk-taking associated with a dot-com start-up wins the respect of a majority of the British public. A recent Mori poll for FT.com found that only 12 per cent of the public envied dot-com millionaires. Half the sample respected them for their risk-taking or reckoned the country needed more creative people like them.
The National Lottery and the TV blockbuster Who Wants To Be A Millionaire? have helped democratise the notion of millionaire status far more than any government "enterprise" measures. With some 100,000 millionaires in Britain (owning assets of £1m or more) and about 2,500 people earning over £1m a year, the mystique associated with millionaire status has vanished.
What effect has the more relaxed public attitude to genuine and above-board personal wealth accumulation had on successful entrepreneurs? They are certainly much less defensive about that wealth accumulation today. Gone are the ostentatious yachts in the Med. Okay, there are exceptions. David Sullivan, the self-made soft-porn king and part-owner of Birmingham City football club, lives in anything but restrained luxury. His £6m mansion - unkindly dubbed the pornbroker's palace - is very much new-Essex in style. But then he is a special case.
The lifestyle of the self-made entrepreneur is also much more low key these days. Few take great long breaks away from the business. Quite simply, if they are running a public company, the punishing demands of the City for profits and earnings growth keep entrepreneurial noses very much at the grindstone. Many are so wedded to their work that family rarely see them during the week. The perception that they have to work punishingly long hours has helped slay public perceptions that the rich and successful are somehow the "idle rich."
Less defensive wealthy entrepreneurs are also good news for society in other areas. As the state withdraws from funding many areas in health and education, the new rich and successful are moving into the vacuum. Every week, there are one or two examples of significant donations to fund public institutions. At the end of May, Tory Party treasurer and billionaire financier Michael Ashcroft gave £5m to Anglia Polytechnic University to help build a new business and management centre. At the same time, Tom Hunter, the Scottish entrepreneur, gave a similar sum to Strathclyde's Entrepreneurship Initiative (which will shortly be re-named the Hunter Centre for Entrepreneurship).
Within their own communities, the new rich enjoy being seen as local role models for the young and school children. John Madejski, founder of the hugely successful AutoTrader magazine, sees this as one of his most important roles, rarely refusing invitations to speak on the role of entrepreneurialism and wealth-creation at local schools and colleges in his native Reading. Totally unfazed by his wealth, he clearly enjoys the recognition that has come with his wealth and success locally.
The Asian community is perhaps the most comfortable with the notion of wealth and success. Until recently, the traditional method of establishment recognition - knighthoods, peerages and the like - were rarely handed out to Asian entrepreneurs. There are still very few with titles and as a result recognition of their business success through their wealth is a matter of immense social esteem in relation to their peers and rivals alike. Muquim Ahmed, a leading member of London's Bangladeshi community, sees the listing of his £10m wealth and achievement as "an inspiration. It makes us want to work harder." Ahmed's hard work has already led him to play a vital role in the regeneration of the whole Brick Lane area of London's East End, where he has built up a number of successful restaurant and business ventures.
And the entrepreneurs themselves are hooked on the drug of business building. In the past, the first thought of an exiting entrepreneur was to head for the Bahamas beach. Very few retire early these days - perhaps ten per cent of all exiting entrepreneurs. Even when they leave with £100m fortunes, the beach holds no appeal. Instead, they start investing in, or starting, new ventures - but this time with more experience, better capital resources and the nous that comes from having done it once (or twice) before.
The government has realised the value of these serial entrepreneurs and is shaping the tax regime to encourage them further. Such measures are timely. The rise of the 20 and 30-something dot-com millionaire who sells up and is left with enough money never to have to work again is becoming quite common. Fortunately for the collective reputation of this breed, it is virtually unheard of for them to become a beach bum. "It's ridiculous to even consider retiring," says one.
Some do try retirement but rapidly find it has no appeal. Cliff Stanford, the founder of the Demon internet business, hold the record for the shortest retirement in history: for just four days after selling Demon in 1998 and netting £35m. "I looked round my holiday home in Spain and I saw lots of people who sold out of their businesses and retired. They were little old men who came to the bar for a drink at lunchtime, had a sleep in the afternoon and then came back to the bar in the evening for more drink. I didn't want to be like that." Stanford has since made another £100m-plus through his Redbus investment vehicle.

Philip Beresford first got interested in wealth 18 years ago. Like a trainspotter, the obsession consumes him but has yet to make him personally rich. He is ever hopeful though. He compiles the annual Rich List that is published by the Sunday Times.

We would be very interested in readers' reactions. Do let us know. Send letters to Matthew Rock, Real Business, Millbank Tower, Millbank, London SW1P 4QP/fax 020 7828 0737/editors@realbusiness.co.uk.

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