The great Russian takeaway

That the rise of a powerful coterie of Russian billionaires overlapped with Britain’s transformation into an offshore tax-haven is unlikely to escape the notice of both countries’ future historians. Indeed it is entirely plausible that had successive British governments in the 1990s been less amenable to foreign wealth, this book would have been entitled Genevagrad rather than Londongrad.

Mark Hollingsworth and Stewart Lansley raise interesting questions about how the rocketing price of property, contemporary art and even private school fees of early Noughties Britain, fuelled by a steady supply of roubles, contributed to the bubble preceding the bust. While there are several excellent studies of the impact of the oligarchs on post-Soviet Russia, few have examined in detail how their arrival on our shores has shaped the UK.

Identifying a turning-point in 1996 with John Major’s government introducing an ‘investor’s visa’, allowing permanent UK residence after five years to those able to invest £750,000 in government bonds or UK companies, the book notes that by 2007 the IMF ranked London as an ‘offshore financial centre’ alongside the Cayman Islands and Bermuda.

Thus London became the location of choice for Russia’s best-known oligarchs — Mikhail Khordorkovsky, before he was imprisoned in Siberia, Chelsea football club owner, Roman Abramovich, the anti-Putin exile, Boris Berezovsky, and the aluminium magnate, Oleg Deripaska, now famous for entertaining Peter Mandelson and George Osborne on his yacht in Corfu.

Such was the competition among the new oligarch community for the trophy assets of ‘super prime’ houses that London overtook New York in 2007 as the most expensive residential property market in the world. As non-domiciled UK residents, Russia’s super-rich could use offshore vehicles to avoid capital gains tax and stamp duty payments, making the squares of west London an attractive way of storing their wealth.