Review: UK corporate workers neglect their mansion

0

Workers walk to work during the morning rush hour in the financial district of Canary Wharf in London, Britain January 26, 2017.

Join now for FREE unlimited access to Reuters.com

Register

LONDON, March 11 (Reuters Breakingviews) – It’s been a tumultuous week in London. With much of the world’s attention focused on the war in Ukraine, it was easy to overlook the significance of the British government’s decision on Thursday to belatedly freeze the assets of a handful of oligarchs, including Roman Abramovich, the owner of Chelsea Football Club. Given the UK’s status as a favorite destination for global plutocrats, anyone who thought the UK capital was still a safe place for dubious wealth will have noticed.

Russian President Vladimir Putin’s invasion has sparked a long-awaited review of Britain’s welcome to its wealthy compatriots over the past three decades. Many politicians, bankers, lawyers and other professionals who served the oligarchs quietly distanced themselves from their former masters. Yet despite all the headlines about the cleanup of ‘Londongrad’, there is less talk about what has made the UK such an attractive destination.

Oliver Bullough has spent years considering this question. His 2018 book “moneylandportrayed the global network of tax havens, shell companies and private banks as a country whose borders were open only to those with enough cash. In “Butler to the World: How Britain Become a servant of oligarchs, tax dodgers, kleptocrats and criminals,” he deploys an equally vivid metaphor to describe the lackey who opens those doors.

Join now for FREE unlimited access to Reuters.com

Register

For Bullough, Britain’s transformation into a janitor for the global elite began with the loss of its colonies after World War II, culminating in the humiliation of the 1956 Suez conflict. He explores the ways in which the country and its old offshoots found a new role: the City of London facilitated the trade of US dollars overseas; the British Virgin Islands have turned into a tax haven; Scots law permitted the formation of limited partnerships; etc

In the process, writes Bullough, Britain has become “an amoral facilitator, enforcer for money, hiding the reality of what it does behind quaint traditions, literary allusions, immaculate stitching , references to the Second World War and in a haughty way”. The consequences of this globalized system are felt elsewhere: the victims of fraud and crime are found in countries such as Moldova and Ukraine, while whether the profits end up in Scottish legal entities or real estate in London’s wealthy South Kensington.

The transformation was not the result of some malicious government plan. Instead, it was born out of a realism about the limits of British influence, a reluctance to exercise too much control over small offshore territories, and an obsequious attitude towards wealthy foreigners. Above all, there was a reluctance to do anything that might make London less attractive to foreign capital or give rival financial centers an advantage.

Britain’s departure from the European Union only reinforces this defensive momentum. There is a deep irony that activists who saw Brexit as a way to revive the country’s glorious past are enthusiastically involved in subservience to wealthy foreigners. Even the so-called bureaucratic European Union has been more ruthless in seizing the yachts of sanctioned oligarchs than the so-called buccaneers of global Britain.

The backlash against Russian wealth could still lead to a broader judgement. However, there is little evidence that Britain is ready to overhaul the system that has made it so attractive to the likes of Abramovich. A more realistic outcome is that the tycoons of Brazil, China or the Middle East will buy up the mansions and country estates evacuated by the Russians, install the same former government ministers in their advisory councils and set up charitable foundations to facilitate their entry into the UK. establishment.

It is telling that even though Abramovich is looking to offload Chelsea, Saudi Arabia have bought football club Newcastle United in a deal that required the Premier League. accept the fiction that the country’s sovereign wealth fund is not under government control.

Trouble is, a grand house once occupied by a helpful butler looks beyond its best. Britain’s appeal largely depends on a stable democratic government and a well-functioning legal system. But tycoons have undermined the legitimacy of democracy with large financial donations and political favours, while their lawyers are using the British courts to bully business rivals and investigative journalists. The global rich will always be able to find another, more docile corporate servant. British foundations will be more difficult to repair.

To follow @peter_tl on Twitter

(The author is a Reuters Breakingviews columnist. The views expressed are his own.)

BACKGROUND NEWS

– “Butler to the World: How Britain Become the servant of oligarchs, tax dodgers, kleptocrats and criminals” by Oliver Bullough was published by Profile Books on March 10.

Join now for FREE unlimited access to Reuters.com

Register

Editing by Swaha Pattanaik, Karen Kwok and Pranav Kiran

Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and to www.breakingviews.com. All opinions expressed are those of the authors.

Share.

Comments are closed.