A remarkable fact of international life today is the emergence of London as one of the foremost capitals of the super rich. It ranks fourth in the world with 45 billionaires. (Moscow is first with 88, but it seems there’s nary a one of them who doesn’t have a home in London.)
A chief reason London attracts the very rich is security. Nobody’s going to be arrested, executed, imprisoned or have his or her fortune confiscated simply because of pique. Another factor is the successful stewardship of Boris Johnson, who has twice been elected London’s mayor. Boris, as he is universally known, exudes glorious optimism, business savvy and sheer charm. As long as he is in charge, billionaires living in London can be sure that no legislation—national, regional or local—will be allowed to mitigate against the making of money.
Britain’s ambivalence towards the EU might be construed as a handicap in attracting the rich. Not so. There’s always the possibility that Britain will strike a profitable deal with Brussels, and over the last decade London has strengthened its financial position in relation to Frankfurt, Paris, Berlin and Amsterdam. The fact is, London is the best centre in which to do business of the highest class. Every conceivable financial outfit, literally, is within call. To set up a multibillion-dollar deal costs noticeably less in London, takes far less time and, if sensibly managed, is far more likely to succeed than in any other financial centre.
London also has a marvellously flexible, comprehensive and (pretty much) honest legal system, which explains why the super rich often prefer to litigate in London, even if they don’t actually live there. And they increasingly prefer to divorce there, as well. The US used to be where the rich went to have their marital settlements decided because of the easy divorce laws and the courts’ generous financial awards. But compared with London’s 45, Dallas has only 17 billionaires, Los Angeles 19, and San Francisco 20. New York is the exception with 71.
Looked at from a global perspective, London’s position appears to be secure, provided it maintains its prudent attitude towards wealth. Its largest rival is Moscow, with its special—and highly precarious—treatment of Russian oligarchs. Paris now has only 21 billionaires—and is fast losing those, thanks to François Hollande’s 75 percent tax regime. Mumbai, which, given the general wealth of India, ought to have scores of billionaires, also has 21. Beijing, with its fierce restrictions on capital movement, preventing its highly successful exporters from expatriating their profits, has 36, and Taipei, whose economy is about 5 percent of mainland China’s, has 20.
Two of the most noteworthy refuges for the super rich are Hong Kong, with 46 billionaires, and Singapore, with 18. As these former British colonies have financial institutions modelled on City of London lines, it’s easy for the rich to move capital among the three financial centres.
Getting it right
London has also become one of the world’s top cities to live in. Properties, though expensive, are excellent, and values tend to increase steadily. The food, in quality and variety, rivals that in Paris. As a travel centre, London is probably the best-placed major city in the world. It also has a glamorous and stable royal family, notable for its teeming young princes and princesses—an aristocracy who live in historic homes accessible to the public. And its artistic, musical and, above all, theatrical richness make New York, Paris and Rome, its only rivals, seem inferior.
But London’s attraction is always precarious. It takes only one wayward leader to make an almighty mess of things. However, should Boris Johnson decide to take over the prime ministership from David Cameron—which seems increasingly likely—then the Tories look set to run Britain for some time. That means a safe haven for the very rich, for security is what they prize above all things.
Paul Johnson is an eminent British historian and author