LONDON (Reuters) – Britain’s Office for National Statistics says as many of the country’s residents were born in Mauritius and Cyprus as in Russia.
The fact British newspapers haven’t coined Mauritian or Cypriot equivalents to “Londongrad” and “Moscow-on-the-Thames” to describe the capital underlines the special social and economic impact Russians have had on Britain in the past decade and a half.
The importance of Russia to British businesses means the cost of imposing tough sanctions against Russia after its troops took control of Crimea could be higher than British Prime Minister David Cameron is willing to pay.
“Amidst all the calls for action on Ukraine, there will be voices cautioning on the need to look more at interests closer to home, and to weigh them in the balance” said Nicholas Redman, Senior Fellow, at the International Institute for Strategic Studies think-tank.
Soviet-born billionaires occupy three of the top five slots in The Sunday Times newspaper’s Rich List, Britain’s most read ranking of wealth, and are prolific buyers of trophy assets such as 100 million pound ($170 million) mansions, soccer clubs and newspapers such as London’s Evening Standard.
One of London’s most visible Russian oligarchs, Roman Abramovich, spent 59 million pounds to buy Chelsea Football Club in 2003 and the Daily Mail newspaper calculated last year he had spent 713 million pounds on players since then.
Abramovich bought a mansion in Kensington Palace Gardens – also known as Billionaires’ Row – for 90 million pounds from hedge fund manager Pierre Lagrange in 2011.
BRITISH ASSETS
More Russians have received special “Tier-1 investor visas”, whose award is tied to investing at least 1 million pounds in British assets, than citizens of any other country since the visas were introduced in 2008, Home Office data shows.
Such links have been a boon to Britain’s real estate agents, luxury goods purveyors and more importantly, its strategically important financial and professional services industries.
Some British allies including France and Poland have vocally backed economic sanctions on Russia if it does not pull back its troops from Ukraine. President Barack Obama has imposed an asset freeze and travel ban on those involved in the Russian military intervention in Crimea.
Cameron has warned Moscow it will pay “significant costs” but an official document unwittingly exposed to a photographer’s lens this week suggested London opposed trade sanctions and shutting its financial capital to Russians.
The Foreign Office declined to say what role, if any, commercial interests were playing in Britain’s approach to sanctions but analysts said they were a key factor.
“We’ve got more to lose than the Americans. Kerry is happy to push for sanctions because it won’t cost them as much,” said Ruben Lee, CEO of financial markets consulting firm Oxford Finance Group.
Analysts predict that Cameron will at most back token measures such as visa restrictions on a small number of senior Russian officials, rather than bar a wider range of possibly Kremlin linked billionaires.
“When someone says ‘I’m coming to see my lawyers who I pay 5 million a year to and stay in my 10 million pound house in Surrey,’ are the British government really going to refuse a visa?,” said Andrew Wordsworth, partner at London-based risk consultancy GPW, which has Russian clients.
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