My First Million

June 12, 2009 5:40 pm

My First Million: Captain of industry with a pension umbrella

Digby Jones, 53, was director-general of the Confederation of British Industry (CBI) from 2000 to 2006. He then served as the minister of state for trade and investment and accepted a lifetime peerage to sit in the House of Lords, on the cross benches.

On leaving ministerial office in October 2008, he was appointed as a business ambassador for UK trade and investment.

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My First Million

Born in Birmingham, Lord Jones read law at University College, London. He joined Edge & Ellison, the Birmingham corporate law firm, in 1978 and became the senior partner in 1995. In 1998, Lord Jones joined KPMG as vice-chairman of corporate finance.

He now chairs the International Advisory Board of HSBC and is chairman of Triumph Motorcycles. He is also corporate ambassador for Jaguar and JCB.

Lord Jones, who is married to Pat, lives in Marylebone and Warwickshire.

Did you think you would get to where you are?

No. When I joined the law firm at 23, my ambition was to become the senior partner and, in 16 years, I did it. But four years later, it was not turning out as I had hoped. When the headhunter came calling for the CBI, I thought it was a chance to make a difference on a wider stage. It never crossed my mind that I would end up a government minister, sit in the House of Lords or speak in the international arena. I never take one day for granted. I think I have been staggeringly fortunate.

When you realised that you had made your first million were you tempted to slow down?

I think my pension was worth £1m in 2005, and every single penny I have put in has been out of my own earnings.

When I was 23, the law firm’s senior partner put pressure on me to take out a private pension. I started the scheme, contributing £50 a month. Gradually, I paid in a lot more. I have never been in a final-salary scheme.

So, having paid money into my private pension for 30 years, today in bad times the fund is worth more than £1.2m. When share prices and land values rally, I would expect it to increase. I still pay into it today. Thank heavens for the senior partner in 1978 who got me doing it.

What is the secret of your success?

Treat others as you would want to be treated. Never be frightened of asking why. Work hard and have a sense of humour.

What is your basic business philosophy?

I believe in socially-
inclusive wealth creation. Unlike any other agent in our society, wealth creation through business is the only way to generate taxation. Second, business must maximise talent because, in a globalised economy, it is the only way we will win. We must have an education system that guarantees universal literacy and numeracy. Business should reach down to those who can’t and give them a leg up.

Do you want to carry on till you drop?

Definitely. I will leave work in a box. I thoroughly enjoy what I do and I hope I can change people’s lives for the better. I don’t really see it as work. Bad days are just good days in disguise – I learn something new every day.

Have you had time for personal financial planning?

I do it all myself, but a small firm of accountants in the West Midlands does my books. My accountant has got a difficult client in me because I probably know as much as he does.

What was your most prudent investment?

It would have to be the two-bedroom flat we bought near Regent’s Park that we still live in today. It is modern with a balcony, a pool and an underground car park. We bought it off-plan from Barratts in 2001, and got a 10 per cent discount. It is 200 yards from the congestion charge zone, but we weren’t to know that when we bought it. It has gone up in value by 70 per cent.

Have you taken steps to pass on your wealth?

We have no children and, as long as Pat will never want for anything, should I go first (and my 85-year-old still-working mum is comfortable), I will leave the lot to several charities to bring a bit of sunshine into a lot of people’s lives.

Do you allow yourself the odd indulgence?

I am a great fan of military history and I visit battlefields to research military strategy. This includes trips to Rorke’s Drift in South Africa, Gettysburg in Pennsylvania, Blenheim in South Germany and Crimea in the Ukraine. My other indulgence is attending Leicester Tigers rugby matches – I am a director of the club.

Picasso or Art Deco as an investment?

Pat and I have two or three antique bronze figures in the house but we don’t go in for art.

What is the most you have ever paid for a bottle of fine wine or champagne?

I bought a bottle of Mondavi’s Opus One for £300 in the late 1990s in San Francisco to celebrate a deal when I was a lawyer. It is a classic red produced in California.

What is your money-saving tip in the recession?

Retain liquidity but, instead of accepting interest rates of 1 per cent on deposit, consider buying a property at the lowest end of the market. You pay capital gains tax of 18 per cent on the ultimate gain instead of 50 per cent income tax on the investment income. We’ve done it as a place to put our money.

Do you have a commitment to charity?

I rode a bicycle from John O’Groats to Land’s End and raised £218,000 for the Birmingham Hospice, which saved it from closure. Then, in 2005, I ran the London Marathon and raised £191,000 for Cancer Relief UK and Unicef. I do a lot of public speaking for charities – two events a week. One of my most recent was in support of Ovarian Cancer Action.

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