For the vast majority of British people, the notion that this country is the global capital of what we might term the international “billionaire community” is a startling one. Most of the UK, even most of London, where the majority of the super-rich are based, are unaware of the existence of such vast wealth co-habiting with the average family.
For most of us, living standards struggle to return to pre-recession levels; public services are more stressed than they have been in decades; much of our energy supply and transport infrastructures are approaching breakdown. Looking through the keyhole at the United Kingdom, so to speak, we might well wonder: who’d want to live in a place like this?
And yet the super-rich obviously do; 104 human beings who are worth more than a thousand million pounds each like it here, for at least part of the time (they are also, naturally, liable to have multiple homes from New York to Hong Kong). These leviathans of wealth make our overpaid corporate bosses look like paupers.
The reasons the super-rich are attracted to the UK are not hard to discern – prominent among them our almost uniquely generous tax treatment of non-domiciled individuals. For those arriving from emerging economies where the traditions of democracy and the rule of law are not yet fully rooted, Britain’s political and (relative) economic stability are also obviously prized. Plus they like London itself, with different nationalities gravitating towards certain already affluent districts.
That billionaires might live in a mansion or penthouse flat only a short limo ride from some of the most deprived districts in Britain is not something they can do very much about. Besides, every great world city has its homelessness and poverty. Statistically, the presence of so much wealth in the same small geographic area as so much deprivation does increase the scale of inequality; but it would be a grave error to think that poverty would be relieved by the forced expulsion or heavier taxation of globally mobile billionaires. They may be a tempting target for a tax attack, and a morally compelling one, but they are swift to flee if they sense danger to their assets.
Some of the super-rich invest in football clubs, in media companies (including the owners of this newspaper) and other concerns.
They employ people, have driven a remarkable construction boom in the capital, and make work for lawyers, accountants, bankers and, of course, tax professionals. The single biggest problem the arrival of the billionaires has exacerbated is the shortage of affordable housing for families, particularly in and around London. Here is the trickledown effect in reverse; a general outbidding of the local population. The inflation of house prices reverberates across much of the rest of southern England and the wider country.
We could do nothing about this: housing in London has always been comparatively costly, and we have been through booms before. This one may burn itself out. No doubt if emerging markets stumble, then the billionaires would find even their finances stretched and the capital’s property bubble would duly burst, which should ease the pressure, albeit with a great deal of disruption.
Yet this is hardly an ideal solution, if it even qualifies for that title. Housing policy, especially in London, defined as supplying sufficient accommodation for those who need it, is perhaps the greatest long-term social failure in Britain. The arrival of the billionaires and the absurd prices they pay for a pad merely draws attention to the mess, and provides scapegoats. Finding a solution has so far eluded the Mayor of London, the Bank of England, the Treasury and other interested parties. Maybe they should ask one of those clever entrepreneurial billionaires for some ideas.