Lord Bamford and his family have received a £300m windfall from their JCB business empire, after a strong year for the construction equipment manufacturer that saw profits rise 44% to £805m in 2023, according to latest accounts.
This large dividend was approved by Bamford in late May, shortly after the last general election that led to the formation of a Labor government. With the Budget due next week, speculation is growing about potential tax reforms targeting the UK’s richest, as Labor aims to shift the tax burden. Sir Keir Starmer has indicated a policy focus on ensuring that “those with the broadest shoulders bear the brunt”, suggesting that changes to capital gains and property taxes could be on the table.
Labour’s plans include a commitment to freeze taxes on “working people” – specifically excluding those with large investments, such as shares or second homes. This political trend has raised concerns among wealthy families and business owners in Britain about a potential wealth tax.
Lord Bamford, one of Britain’s most prominent industrialists and a well-known Brexit supporter, has long been a major donor to the Conservative Party, having supported previous prime ministers including David Cameron, Boris Johnson and Liz Truss. JCB, the Staffordshire-based manufacturing giant, is still wholly owned by the Bamford family, who are now among Britain’s richest families with an estimated fortune of £5.9bn.
The Bamford family has a long tradition of entrepreneurship: Mrs Bamford founded the Daylesford Organic Farm store chain, while their son Joe Bamford owns the bus company Rightbus. Since inheriting JCB from his father, company founder Joseph Cyril Bamford, Lord Bamford has expanded the business into a global player with a popular product range including the popular 3CX Sitemaster backhoe loader, which competes with US giants Caterpillar and John Deere.
While Labor Chancellor Rachel Reeves faces mounting pressure from within her party to introduce a “wealth tax”, some MPs are calling for a 2% tax on individuals with assets exceeding £10 million. However, critics argue that such a policy could deter investment and stifle entrepreneurial growth, potentially driving companies and high-net-worth individuals away from the UK.
The latest £300m dividend has been distributed to the Bamford family through JCB Services Ltd, the group’s main division, after raising its dividend to £6,159 per share, up from £5,312. Despite this strong financial performance, JCB is preparing for a downturn next year. Recent reports indicate that JCB has already cut more than 230 jobs at UK-based agencies due to lower-than-expected global manufacturing demand.
JCB’s chief executive, Graeme MacDonald, gave a cautious forecast for 2024, citing challenges in the UK and European markets, especially the downturn in housebuilding and a decline in economic activity in Germany. With the manufacturing sector under pressure, JCB and similar companies may face an uphill battle in the coming months.