Lord Bamford’s £300m family windfall from JCB raises questions amid potential wealth tax
Lord Bamford and his family have made a £300m fortune from their JCB business empire, following a strong year for the construction equipment manufacturer which saw profits rise 44% to £805m by 2023, according to the latest accounts.
This big budget payment was accepted by Bamford in late May, shortly after the recent general election that brought in a Labor government. With the Budget set to be released next week, speculation is mounting about possible tax changes aimed at the UK’s wealthiest, as Labor aims to remove the tax burden. Sir Keir Starmer said the policy was focused on ensuring “those with the broadest shoulders bear the brunt of the burden”, suggesting that changes to capital gains and estate taxes could be on the table.
Labour’s plans include a commitment to freeze taxes on “working people” – except those who hold large investments, such as stocks or second homes. This policy direction has caused concern among Britain’s wealthy families and business owners about a potential wealth tax.
Lord Bamford, one of Britain’s most prominent industrialists and a known supporter of Brexit, has long been a major contributor to the Conservative Party, supporting former prime ministers including David Cameron, Boris Johnson, and Liz Truss. JCB, the Staffordshire-based manufacturing giant, remains wholly owned by the Bamford family, now one of Britain’s richest with a fortune of £5.9bn.
The Bamford family has a long tradition of business: Lady Bamford founded the Daylesford Organic Farm chain of stores, while Jo Bamford, their son, owns the Wrightbus bus company. Since inheriting JCB from his father, company founder Joseph Cyril Bamford, Lord Bamford has grown the business into a global player with a popular product range that includes the iconic 3CX Sitemaster backhoe loader, American rivals Caterpillar and John Deere.
As Labor Chancellor Rachel Reeves faces growing pressure from her party to introduce a “wealth tax”, some MPs are calling for a 2% tax on people with assets over £10m. Critics, however, say such a policy could stifle investment and stifle entrepreneurial growth, potentially pushing high-value businesses and individuals away from the UK.
The latest £300m dividend payment to the Bamford family came from JCB Services Ltd, the group’s majority shareholder, after it increased its dividend to £6,159 per share, from £5,312. Despite this strong financial performance, JCB is looking to decline next year. Recent reports show that JCB has already cut more than 230 jobs in the UK agency due to lower than expected production demand.
JCB’s chief executive, Graeme Macdonald, gave a cautious outlook for 2024, citing challenges in the UK and European markets, particularly the slowdown in housebuilding and the slowdown in German economic activity. With the manufacturing sector under pressure, JCB and similar companies may face an uphill battle in the coming months.
