Londongrad Calling

The United Kingdom's Dangerous Dependence on Russian Money

A banker in the City of London, June 19, 2013. Luke MacGregor / Courtesy Reuters

In March, a tongue-in-cheek online referendum in the eastern Ukrainian city of Donetsk proposed to resolve the standoff between Kiev and Moscow by joining the United Kingdom, given the Welsh roots of the city’s nineteenth-century founder, the industrialist John Hughes. The referendum, which took the name of the British national anthem, “God Save the Queen,” received a few thousand votes, as well as a good deal of exposure in the foreign media. A rather more plausible scenario, of course, is that this Russian-speaking city will drift into Moscow’s sphere of influence.

Although the Union Jack is unlikely to fly over Donetsk anytime soon, some observers worry about a Russian flag flying over London, at least metaphorically. Wealthy Russian expats seem to wield substantial political influence over the British government, particularly in its approach to the Ukraine crisis. The evidence: on March 3, a government briefing paper, which a foreign policy adviser carelessly brandished to a phalanx of photographers outside No. 10 Downing Street on his way to a meeting, revealed that Prime Minister David Cameron’s government would oppose any sanctions that closed off London’s financial center to Russian money. Russian billionaires currently own two of Britain’s leading newspapers, a couple of its top football clubs, and a large slice of prime London real estate.

In fact, the Ukraine crisis has crystallized a broader trend in British politics: the increasingly subordinate attitude of the government toward the capital’s super-rich, many of whom are not even British citizens. The City of London has long wielded disproportionate influence over Britain’s elected leaders, stemming from the capital’s historic status as the hub of the world’s financial and trading system. Even at the height of social democratic politics in the United Kingdom in the 1960s and 1970s, when the prime minister received trade unionists at No. 10 and the government owned major industries, the City retained decisive influence over British politics. The financial community was able to win favors from

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