The established rich also include quite large numbers of households that are wealthy if not spectacularly so. Many have lived in London’s alphahoods for several generations, sit well within the 1 per cent in terms of wealth, and resent many of the changes brought about by new money. This is a privileged group bordering the upper-middle and upper class, often having bought property in the 1960s and ’70s, and for whom the massive tide of wealth arriving in the city represents both a symbolic and real challenge to their quiet enjoyment of the city. For this group the major anxieties are the increasing cost of property, the excessive noise pollution from cars and parties, and the question of why the new wealth elite don’t seek to become more integrated in the everyday life of the neighbourhood. A frequent complaint of this patrician elite is that areas which were once relatively diverse and lively urban communities now have the feel of ghost neighbourhoods. This is a group that has been and still is privileged, but which now feels threatened by new money and the sense of an overdevelopment of the city exemplified by its new high-rise and luxury developments.
The ‘new’ new rich
The alpha city has seen its traditionally wealthy groups joined by those who have grown rich in a time of global financialisation, kleptocratic capitalism and the use of new financial instruments and rent-seeking tech platforms as effective methods for making massive personal fortunes. London has been keen to lure this group and, more particularly, their cash.
Changes in the sources of the wealth among the city’s rich offer a barometer of changes in the global economy. Those changes, from the dominance of coal, steel and cotton in the nineteenth century to the role played by finance, tech and media today, can be mapped onto the city’s alphahoods and the architecture of new waves of development that show distinctive contemporary displays of taste and untrammelled money power. Over time these displays and the rich themselves appear to have become more privately oriented, whereas many among the wealthy of a hundred or so years ago would signal their standing through social and political contributions.
The idea that a crusty, outmoded and undemocratic elite has given way to the benefit of ‘self-made’ (the scare quotes are important!) money belies the many contributory factors such as good fortune, selection processes in major corporate outfits (based on schooling or social networks), the use of leverage from monopoly rentier positions, or indeed criminal acts that help to game or infiltrate the system. The rich often occupy a structural position that must be filled while believing no one else capable of doing what they do. Many of them come from a kind of vampiric cluster whose wealth is primarily generated by their ability to draw massive income from their control over capital, property and intellectual property. This group is unchallenged, untaxed and over here. A small coterie of alpha cities are engaged in a competition to attract them, driven by a number of enabling political and economic groups and key individuals.
How might the social location of London’s new money be best described? The traditional class types – working, middle and upper – feel increasingly quaint and unsuited to making sense of the long tail of riches that now extends celestially upwards. Certainly any sense of class or identity founded on traditional measures of occupation, political affiliation or income will not get us far in understanding the gulf between the social top and bottom, and, critically, the ways in which massive advantage and money power are becoming concentrated among the rich. One way to gain some purchase here is simply to follow the money, looking at the sources and systems that deliver such pronounced benefits to such a small group.
Dead Space
This means tackling two key issues head on: first, the question of power captured in the idea of an elite itself; second, how we understand its influence on the urban settings in which it is located. Clearly there are numerous overlaps here, as money connects with other affiliations, institutions, identities and industry sectors. None of this answers the question of whether an upper or ruling class, or an establishment, still exists, or if it does whether it remains influential. However, we can see is that in many cases old money has become adjunct and facilitator to the new capitalists. In some respects the landscape of established groups and interests has been circumvented by the way that new money has again bulldozed to one side the closed doors of class.
While the idea of an establishment is not redundant, it has in many ways been refashioned by the presence of a newer, internationalised and cosmopolitan group whose wealth is akin to that wielded by the belle epoque capitalists of the late nineteenth and early twentieth centuries. The wealth of those groups was eroded and straitened over the last century by massive wars and the partial triumph of labour and social democratic governments. But a resurgence of class and capital interests can be observed in the way that London in particular has been managed as part of a strategy to restore and maintain power among the wealthy. This restoration and the growth in numbers of the rich themselves have been enabled by a deregulated land and labour market, cuts to the public sector, fewer border constraints or taxes on capital, as well as an enabling environment for international investors and buyers of property. These regulatory aspects of the city, designed to lure the rich, have been supplemented with what amounts to a kind of recorded welcome message from a series of mayors (such as Boris Johnson’s claim that London is to billionaires what the jungles of Sumatra were to orang-utans) and other influencers that is played to anyone with bags of cash looking to invest or live in the city.
The key formations seeking to attract the rich are embodied by central and London government (including the thirty-two London boroughs, many of which either by choice or necessity have welcomed international capital) and the City, which sits at the centre of massive corporate flows (including enormous illicit wealth channels) and has sucked in capital via the post-colonial development of the world of offshore finance. Whether during apparent booms or periods of economic crisis, the power of finance has been assured through the ingestion of the logic of money by government.
One important means by which wealth has been retained by potentially footloose wealthy individuals is known as the non-domicile, or non-dom, tax rule. Where trusts have proved useful as a key vehicle for protecting old money, money from overseas or inherited wealth (the tax code can be inherited) was encouraged on the promise that it would remain largely untaxed. It remains possible to live in Britain and hold enormous wealth overseas, with only a very partial tax applied to income brought to the UK. This can get very complicated very quickly. The non-dom tax rule itself goes back to 1799, when the measure was brought in to help rebuild state resources following a series of wars and enormous losses. At the time many wealthy British citizens were living abroad and the question arose of how to tax their foreign holdings of estates, wealth and business operations without putting them off from returning to the UK. To encourage their return the government proposed that so called non-doms be exempt from paying tax on their assets and foreign income.
The rules changed in 2017 when non-doms were asked to pay income tax on their earnings in the UK, but they could still avoid paying any tax on their foreign assets and income as long as these were not paid back to them in the UK. The point here is that one might choose to retain operations overseas and build up a war