“We are all prostitutes.”
The Pop Group, obscure late 1970s agit-pop band.
A few years back, I suggested that if you wanted to picture the London of the future, think of a City inhabited by 20,000 of the mega-rich and 15 million serfs to service their every need. I was in part joking, I think. It is not so funny now.
An extraordinary, excoriating piece in the New York Times, titled London’s Laundry Business, says the UK is happy to betray the US, and by extension the free world, to protect the City’s supply of dirty Russian money.
Obviously, the context is Ukraine. And the Americans seem to be going through one of their periodic bouts of anti-British sentiment. But the piece has a point. London has become the first choice for some extremely dubious people who are trying to find a safe haven for money which they have stolen, misappropriated or otherwise embezzled.
This has always been the case. London, with its impressive shopping, posh hotels and gracious housing in some parts of the City, has attracted petro-dollars since the oil first came out of the ground in the Middle East. But what has driven house prices to their current, mad levels – and what will keep them there, believe me – has been the arrival of not just the oligarchs, the obvious face of the Russian economic upheaval, but their hangers-on and the not quite so rich further down the scale.
Joining them are the wealthy Chinese and other south east Asians, some of whom have an equally tenuous right to their newfound wealth. Some of those huge towers of flats being built on the Thames, or those luxury apartments in Chelsea or Belgravia, are not even marketed in London. They go up for sale in Singapore or Hong Kong and are bought off plan, unbuilt. No point in selling to the locals – they can’t afford it.
There is an obvious reason why you would want to buy into the London property market, even if you had little wish to live there from one month to the next. Putin has already shown a propensity to fall out with several of those newly enriched oligarchs. It is not inconceivable that he, or any subsequent Russian administration, perhaps one more concerned with social equality, might not one day come after those ill-gotten gains. But not if they are converted into a five million pound flat by the Thames.
The arrival of the super-rich has created an entire eco-climate of services to keep them in the comfort to which they are accustomed, from stupidly priced fashion boutiques for their wives and mistresses and interior designers who will convert their hideous taste into gold-plated reality to high class hookers. The City has a role to play in this. As the New York Times piece points out, there are more than 50 Russian companies quoted on the Stock Exchange.
When they first started to arrive, along with companies from countries that had earlier been part of the Soviet empire but broken away, some of which have appalling human rights records too, there was a genuine debate. Given that some were highly suspect, in terms of how those who controlled them acquired those holdings, should we risk the reputation of one of this country’s greatest assets, the London Stock Exchange?
The counter-argument was, if London turned them down, they would go elsewhere, to another domicile’s benefit. This is the same argument, by the way, that fuels the arms trade. If we don’t sell it, someone else will.
Some of them were allowed to bend the usual rules of corporate governance, which are designed to ensure all shareholders are treated equally. In some cases, this has subsequently done a disservice to those investors who bought in when the companies floated, though those investors will have known what they were buying.
Now there are plans to charge a million pounds or more for British residency, and a visa. What once had to be earned of right is now up for sale, at the right price.
Some years back I had the chance to interview someone who had made rather a lot of money in Russia. He lived in a gated compound in… well, probably better not to say. He was affable enough. But the place was genuinely scary, a small piece of my home town I was allowed into on sufferance by guards who may, or may not, have been armed. You had to ask yourself just why the residents needed quite such heavy-handed security, and why they were obviously prepared to pay so much for that peace of mind. What were they afraid of?
Money talks, and everything is for sale.