(posted 7642 days ago)Times
May 18, 2003Fame & Fortune: Shamed MP made £5.60 a week in jail
Jonathan Aitken says he learnt more about money as a prison toilet cleaner than he did as a millionaire banker. By Natalie GrahamJONATHAN AITKEN, 60, is best known as the Tory MP who lied on oath in a libel action. He pleaded guilty to charges of perjury and served an l8-month prison sentence. He then spent two years studying theology at Wycliffe Hall, Oxford. He now speaks and writes on the Christian faith.
In the 1960s, Aitken was a journalist and worked as a war correspondent in Vietnam, Biafra and the Middle East. He then went into business and became chairman of a merchant bank in the City of London.
In l974 he was elected Conservative MP for Thanet, spending l8 years on the back benches until his appointment as defence minister in l992. He joined the cabinet as chief secretary to the Treasury in l994.
He is the author of six books, including Nixon: a Life (l993), which won the International Churchill Society prize for political biography. Aitken is now working on the biography of Charles Colson, the American prison reformer and Christian leader.
Aitken is divorced from his first wife, Lolicia. Next month he will marry Elizabeth Harris, a travel consultant who was formerly married to Richard Harris, the late actor.
He has four children — twins Alexandra and Victoria, 23, Petrina, 22, and William, 20. He lives in Kennington, south London.
How much money do you have in your wallet?
I don’t actually have a wallet. In my pocket I have about £40. I have just spent some of it on two Cokes and a sandwich lunch for me and my mother. She is 92 and lives nearby. The rest of my petty cash will last me for three to four days, with the congestion charge taking up half of it.
Do you have any credit cards?
No — that’s a legacy of having been declared bankrupt in l999, though my bankruptcy was annulled in December 2001.
My bankruptcy was a very unusual and rather hysterical one. I only had two creditors: one was a newspaper, the other a television company. When the bankruptcy was annulled I was left with nothing. For a long time I had no bank account, but you are allowed to earn £300 to £400 a week as a bankrupt’s living allowance.
I was able to save some of the allowance, so by the time of the annulment I had about £2,000.
Are you a saver or spender?
I used to be a fairly flamboyant sort of person. In financial matters I was never reckless, but I did have an expensive lifestyle.
I had no outrageous extravagances except for entertaining friends at dinner parties and paying school fees. All that seems a long time ago.
During the years I was bankrupt it was difficult to live on just £300 to £400 a week, but it was not stressful.
The reason for this lack of financial stress was that I spent two years studying at Wycliffe Hall, a Church of England theology college. It is about the only environment where someone with an income of £15,000 or so a year is richer than most of his contemporaries.
I earned my living by freelance writing, lecturing and broadcasting.
How much did you earn last year?
For most of last year I was still a student at Oxford. My earnings were below £20,000. This year I hope to earn more, depending on my book contracts and after-dinner speaking engagements.
Have you ever been really hard up?
I was hard up during my two and a half years of bankruptcy. I had no home, just a college room in Oxford, and I used to stay with my sister when I was in London.
For seven months of that time I was in prison. I was the prison lavatory cleaner for wages of £5.60 a week, but almost every week I used to get a bonus of £1 for doing a good job. I spent that money extremely carefully. My great luxuries were miniature pots of Marmite and packet soups from the prison canteen.
The financial point about prison was that I learnt how to budget down to the last 2p, which made a change from my spending habits in the days when I was chairman of a City merchant bank.
What is the most lucrative work you have done? Did you use the fee for something special?
I suppose being a merchant banker in my thirties and early forties, though my income bore no relation to salaries today. Adding up all my earnings, maybe it was £100,000 a year, but in the early 1970s that was big money, before the City paid telephone-number salaries.
A lot went on school fees, but I also bought an eight-bedroom house in Westminster, with a small mortgage.
Do you own a property?
No. I live in a small basement flat in my sister’s house in Kennington. I will move to Fulham after I get married.
Do you invest in shares?
I used to be an active investor. I was chairman of Aitken Hume, a merchant bank in the City of London. It had banking and fund-management licences and at its peak managed six or seven billion pounds.
We employed 40 or 50 fund managers, so you heard a lot of inside analysts’ reports and market views.
I would talk to the best fund managers, then make my own investment decisions.
Do you have a pension, or other retirement plan?
Yes, I have a pension that I started in my early 30s. I also contributed to an MP’s pension for 23 years.
My parliamentary scheme has just started to pay out. After tax I get £1,600 a month.
I will receive my occupational pension at 65.
Do you believe pensions are a good thing?
Yes I do. I think everyone should try to provide for their old age. Until recently pensions seem to have been managed very prudently by pension fund managers, but obviously there are problems now.
What has been your worst investment?
The libel case i l999, which cost me, in round figures, roughly £4m.
With hindsight I should never have started it. I took myself too seriously and told a foolish lie.
And your best?
Before my bankruptcy my best investment was my home in Lord North Street, Westminster, which cost me £225,000 in l980. My bankruptcy trustee sold it for £2.5m.
Do you manage your own financial affairs?
Yes, but they consist of me just putting money into the bank and taking it out.
What aspect of our taxation system would you change?
I would do more to encourage the institution of marriage and the family. I also think the 40% top rate of tax starts much too low down, at about £30,000.
It should hit people earning £50,000 a year, not middle-income earners.
What is your financial priority?
Balancing my personal budget, by getting my income to equal my expenditure.
Do you have a money weakness?
I like dining out more than I can afford. I have quite simple tastes in food and would be happy eating breakfast three times a day. Sausages and mash or fishcakes are among my favourite dishes.
What is the most extravagant thing you have ever bought?
When I was 23 I bought a turquoise MGC sports car, which cost about £2,000. I was just back from reporting in Vietnam and had earned some bonus money, so I wanted to splash out on a new and very high-powered car.
Do you play the lottery? What if you won?
I do from time to time, though not in any systematic way. If I had £2m at my disposal I would give most of it away, some of it to charities and some to my children. The remainder I would use to give myself a better pension.
What is the most important lesson you have learnt about money?
I don’t think possessions are important, and travelling light is not only the cheapest but the happiest way of living. I can honestly say that having had a luxury lifestyle followed by a frugal one, I have been more contented living the frugal life, though I still enjoy the odd flash of luxury. Even in my high-income days I was more interested in politics and writing books. Now I have a low income by businessmen’s standards but I am spiritually and personally very happy. So life has given me a good deal.