Inside Story

The plutocratic city

How London’s “haves” and “have yachts” are reshaping the city

Peter Mares 16 December 2022 3715 words

Rich or super-rich? Kensington Church Walk in London’s west. In Pictures/Corbis via Getty Images

Are Mike Mulligan and his steam shovel alive and well in London? Virginia Lee Burton’s classic children’s book recounts how Mike and his hard-working steam-powered sidekick, Mary Anne, are threatened by a new generation of diesel-powered diggers. Refusing to consign Mary Anne to the scrapheap, Mike bets they can excavate a cellar for the new town hall in just one day — or do it for free. The cellar gets dug before sunset, of course, but in their haste Mike and Mary Anne forget to create an exit route and find themselves stranded in a deep pit.

The story came to mind while I was reading Serious Money: Walking Plutocratic London, sociologist Caroline Knowles’s perambulatory new book about how wealth shapes the English capital. Inspired to tread some of the same streets myself, I soon came across one of the spectacles Knowles documents: a “basement conversion” more accurately described as a large-scale excavation to create extra rooms under an elegant Kensington terrace. Sometimes, Knowles tells us, builders find it’s not worth their while to crane a mini-digger out of a multimillion-pound project, leaving “dozens of them… buried in the foundations of houses.”

It sounds like an urban myth, though Knowles says she spoke to builders who confirm it. Either way, the extravagance of efforts to create what have been labelled “iceberg homes” makes the tale credible. On the project I came across, the planning approval posted on the builder’s hoardings said the owners had allowed ninety weeks for construction.

It’s not hard to imagine why. Some excavations go down as many floors as the original house went up, and then extend under rear gardens to create space not just for wine cellars but also for gyms, cinemas, swimming pools and car parks.

Not surprisingly, basement conversions are the source of bitter neighbourhood disputes. Led Zeppelin guitarist Jimmy Page and pop star Robbie Williams engaged in a five-year stoush over Page’s fear that excavations for a pool under Williams’s £17.5 million (A$32 million) Holland Park mansion might weaken the foundations of his own £12.5 million pile next door.

Williams won out in the end, but no mechanical diggers will be buried in the basement of his Woodland House — building approval is conditional on the cavern being hollowed out by hand to minimise vibrations. Avoiding cracks in the stained-glass windows of Page’s French Gothic Tower House will add £1.5 million to Williams’s renovation bill, but this is small change for the singer and his wife, Ayda Field. They recently sold estates in Switzerland and Britain worth more than £30.75 million and splashed out US$50 million on another spread in Los Angeles.

The clash between a 1960s rock star and the lead singer in a 1990s boy band might not qualify as a contest between old and new money, but it could well be an example of the conflict between the “haves” and the “have yachts.” The “haves,” in Knowles’s terminology, are the merely wealthy. The “have yachts” are super-rich. Also known as UHNWIs (ultra-high-net-worth individuals), they can afford to keep fully crewed multimillion-dollar boats moored in Monaco in readiness for the occasional Mediterranean jaunt.

As for yachts, so for cities. In the words of sociologist David Madden and planner Peter Marcuse, when housing enters global investment circuits “its use as a living space barely registers.” The built form becomes “a tangible, visual refection of the organisation of society” and global wealth is “congealed” into bricks and mortar — or indeed underground swimming pools.

As a writer, Knowles places herself in a literary tradition that takes in Virginia Woolf, Walter Benjamin and Teju Cole, figures whose work “exposes politics, like a sediment in the landscape.” As a social researcher, she upends the established focus on poverty and the poor to turn the same “unforgiving framework” of research on the very rich. She walks and talks her way across London, trying to understand how very rich people shape the city, and how they live in it.

She struggles to meet many actual billionaires. Russian oligarchs who use “complex financial instruments provided by London firms” to hide their riches from Moscow prove to be a reclusive bunch. She does meet a lesser billionaire she calls Sturgeon (she gives all her informants pseudonyms), who is investing some of his excess wealth in an “experimental sustainable caviar business” (anaesthetising and milking the fish to harvest the eggs instead of killing them). But Sturgeon is reluctant to discuss the source of his wealth, his compatriots’ lives or any security concerns wealthy Russians may have.

The same goes for the art collector and philanthropist she calls Soviet, who is only a multimillionaire anyway. Middle Eastern oil royalty, British aristocrats and other UHNWIs who moor their wealth in London’s safe financial harbour are no more forthcoming.

Instead, the bulk of Knowles’ insights are gleaned from those who work or live within the gravitational orbit of extreme wealth, like the retired civil servant she calls Officer.

Officer “patrols” the streets of Kensington, keeping an eye on basement conversions and other developments in case the residents’ association can intervene to prevent the worst excesses. Officer himself doesn’t have “serious money” and is disdainful of those who do. He says many of his super-rich neighbours rarely spend much time in the mansions they acquire. That’s if they hang on to them — others buy, renovate and move on.

The super-rich might purchase a terrace house divided into apartments and consolidate it into a single multi-storey home, or knock through the walls of adjoining terraces to create a mansion. As Officer’s friend Historian points out, the next buyer will also have to be super-rich to afford what’s now an even more expensive property, and the neighbourhood will be forever changed.

When Officer’s “ghost neighbours” are in residence, they swim in their private pools, watch films in their private cinemas, work out in their private gyms, and use the vehicle lift to enter and leave their mansions in luxury cars. They don’t frequent neighbourhood cafes or pubs, let alone walk to the corner shop, contributing nothing to the viability of local enterprises or a sense of community. “It spoils things for people who do live their normal lives here,” says Historian’s wife Opera. “Rich people,” Knowles decides, “are poor neighbours.”

Knowles gains further insights into the lives of the rich from Wig, a barrister. One of Wig’s clients wanted advice on whether to seek a divorce in London or go to the considerable expense of shifting his wealth overseas. Advising on the latter course, Wig saved his client tens of millions by avoiding English courts, which are “comparatively generous to partners who are not directly involved in generating the money.”

These manoeuvres don’t always go so well. In another case Wig represented a woman whose husband tried the same trick. Wig stymied the multimillionaire’s claim that he lived offshore by proving that he was still London-based. He had a British shotgun licence, which is only legal if the owner lives at the British address listed on the certificate, and he had a Transport for London seniors card that is only available to residents.

Alerted that divorce proceedings are public documents, Knowles does her own digging. It may be voyeuristic, but it’s also revealing. One divorcee, seeking a settlement that will enable her to live in the manner to which she is accustomed, asks the court for an annual travel budget of £2.1 million, and half as much again for fashion and jewellery — enough to cover a yearly fur coat, fifteen cocktail dresses, fifty-four pairs of shoes, eighteen handbags and much besides.

In this world of extravagant display, domestic staff adorn already elaborate homes. Butler is one of an estimated two million people who work in domestic service in Britain, “the highest number since the Victorian era.” Butler acknowledges that he “looks good in a suit,” which means he can be employed on day shifts and seen by visitors.

He also knows he is easily disposed of. He recounts how a colleague was fired after twenty years’ employment for being “a bit too old.” He witnessed another boss bawl out a valet because he didn’t know how to wind his £250,000 watch, and he saw a team of butlers draw the wrath of their employer at the end of a sixteen-hour day because they failed to serve tea in a Meissen porcelain cup. Money gives the rich the authority “to humiliate those who serve them.”

Money rises early and retires late, and Knowles follows its arc from east to west. Her walks begin amid the glass towers and brash nightclubs of Shoreditch and the City of London, where the finance machine “churns, expands and skims,” redistributing money “into ever fewer hands.” This is where “the building blocks of the plutocratic city” are manufactured, to be reinforced by bespoke advice on estate planning, tax shelters and family trusts.

She moves through Mayfair, Belgravia and St James, where new and imported money mixes with inherited wealth in places that have “the sort of hush which only lots of money can buy.” Hedge funds, private equity firms and family offices hide discreetly behind brass plaques — no names, only numbers.

She examines domestic life in Kensington and Chelsea, discovering that men still mostly go out and make the money while women mostly stay home to manage the household, staff and children who live in a triangle between city residence, country estate and elite boarding school. After hanging out with twenty-year-old Bags and her boyfriend Barbour in Sloane Square, Knowles observes that their lives mimic those of their parents, “heavily prescribed by gender and tradition” with “little room for imagination and manoeuvre.”

Knowles concludes her journey by following the “vortex of extreme wealth” upstream along the Thames to Richmond, home of Kew Gardens, then further west beyond the city fringes to Virginia Water, a London commuter suburb described by the local real estate agent as “the most expensive village in Britain.”

At the heart of Virginia Water is the Wentworth Estate — 1100 large homes built in the 1920s Arts and Crafts style. This is where Chilean dictator Augusto Pinochet endured house arrest in the late 1990s while efforts were made to extradite him to stand trial for genocide and torture. An interior designer tells Knowles that it’s tricky and expensive to find the right materials for building in Wentworth. Bricks, for example, must be “tumbled… so they don’t look new and shiny, or too bling.”

The Wentworth Estate is built around a golf club of the same name, another site of struggle between the haves and the have yachts. After billionaire Chanchai Ruayrungruang bought it in 2014 he doubled the fees and halved membership numbers, pushing out the merely wealthy in favour of a richer, more exclusive clientele. Talk show host Michael Parkinson was among those who offered stiff resistance in the courts.

Knowles finds herself on “sinister and silent streets” where walkers are neither familiar nor welcome. Signs remind her Wentworth is a private estate and members of the public use its roads at the pleasure of the owners. She wonders if driving would be any better and learns that estate managers, with a direct line to Surrey Police, use number plate recognition software to identify vehicles that have no business there.

In other parts of Virginia Water, residents have clubbed together to privatise their streets as well. Road ownership “has spread through the area like a rash,” supported by CCTV cameras, private security guards and signs reading “only residents and guests.” Properties are defended by approach lights, alarms, “tactical landscaping” (fences) and yet more guards.

For Knowles, this is “Johannesburg in Surrey.” While rich white South Africans might fortify themselves “against the imagined depredations of the impoverished black masses,” the source of potential threat in Virginia Water is unclear. A private security consultant tells Knowles that London is a lucrative market because of its lack of actual risks. But if you’d like four black Range Rovers to follow you around, he can arrange it for £10,000 a day.

Like yachts and good-looking butlers, security is another performance of wealth, “an eye-catching display of money that few can afford to stage.”

Art can be spectacle too. On her way to meet “Banker” in the City of London, Knowles admires the paintings in his foyer by Damien Hirst, the British artist best known for putting a Queensland shark in formaldehyde and encrusting a skull with diamonds. In Mayfair alone Knowles counts twenty private galleries: on offer in one of them (in the catalogue’s words) is Hirst’s “delectably freshSummer Breeze, sixteen butterflies fluttering against a blue sky, “punctuated by soft formations of luminous white clouds.” The painting subsequently sold for £435,000, about 25 per cent above the gallery’s top estimate.

“As money accumulates,” observes Knowles, “it struts in the clothes of high culture.” But art is not just for display; like property, it is another convenient way to launder money or stash funds in a “safe deposit box.” And if you are prepared to forgo looking at it, you can also avoid Britain’s 20 per cent value added tax by warehousing it offshore.

Culture and finance share the same streets, notes Knowles, and this is true of public art too. Further east, at Canary Wharf, Henry Moore’s Draped Seated Woman is one of three large bronzes gracing a small square. Under a 1960s scheme to place works by leading artists in housing estates, schools and other public places, Moore sold the sculpture to the London City Council at a 25 per cent discount. For three and a half decades, residents of the Stifford Estate in Stepney enjoyed passing by the familiar figure, which they fondly dubbed “Old Flo.”

When the estate was demolished in 1997, Old Flo was loaned to a sculpture park in Yorkshire. Two decades later it was back in its original borough but remained lost to the housing estates of Stepney. Placing the statue in a forest of concrete, steel and glass “constructed on the dispossession of London’s poor” could be described as artwashing — not least because Canary Wharf, like the Wentworth Estate, isn’t a public space.

Here, you’re on private property and “no right of way, public or private, is acknowledged.”* It comes as little comfort to be told that you are also under twenty-four-hour CCTV surveillance for your “safety and security.”

As I traced Knowles’s steps I experience more direct surveillance in Belgravia’s Eaton Square, one of London’s most exclusives addresses. With its Georgian townhouses straight out of a BBC period drama, this is “a world coated in fine aggregate render [and] painted in off-white magnolia,” with matching columned porticos and black wrought-iron fences. In the late afternoon gloom, I watch a resident emerge from her taxi to be ushered inside by a doorman in bowler hat, coat and tie. Then I realise I am being observed too, by a burly figure with a military stance standing watch further along the footpath.

Eaton Square’s heritage-listed terraces surround a series of six rectangular parks accessible only to residents. All the land belongs to the Duke of Westminster: “these streets are his, the squares and the statuary.” Under the rules of primogeniture, the seventh duke, otherwise known as Hugh Grosvenor, inherited the £9 billion estate at the age of twenty-seven despite having two elder sisters.

In one of the most powerful sections of Serious Money, Knowles walks the increasingly gentrified streets of Notting Hill. Here she interviews residents who chose the area for its vibrant “social mix” but found themselves floundering after “the parallel tramlines of the rich and poor, along which the neighbourhood usually ran, suddenly, dramatically and momentarily crossed.” That was on 14 June 2017, when the shoddily renovated Grenfell Tower exploded into flames, killing seventy-one residents and rendering hundreds more homeless.

Knowles speaks to “Palace” and other well-heeled residents who rushed to help distressed Grenfell neighbours. Their efforts were earnest and genuine, but ultimately served to emphasise the gulf between them and their neighbours. “The chasm between rich and poor narrowed in the immediate aftermath of the fire, as lives entwined; and then reopened as social inequalities as usual were resumed.”

Today Grenfell Tower is shrouded in white cloth, awaiting a decision on whether it will be demolished. Across the top floors a banner with a big green heart reads “Forever in our hearts.” At ground level, the white hoardings blocking access to the site host art works, floral tributes and scribbled texta messages to lost loved ones.

Grenfell sits at the northmost end of the Royal Borough of Kensington and Chelsea, which hosts extremes of wealth and poverty. A quarter of all homes in the borough are social housing, though the Notting Hill Housing Trust, in a sign of the times, now accommodates some of its tenants further east in the Borough of Hackney, where properties are cheaper.

You don’t need to walk far south from Grenfell Tower to enter a different social world. The plaque on a last surviving bottle kiln reminds passers-by of “the nineteenth century, when potteries and brickfields were established here amid some of the poorest housing conditions in London.” Today, the local estate agent lists a one-bedroom “mews house” in Pottery Lane at £700 a week. A worker earning the London living wage of £11.95 an hour would need to work a fifty-eight-hour week just to make rent.

Among the property’s selling points are “the green open spaces of Holland Park” just to the south, which boasts an Opera House, an elegant Japanese garden and a statue of its namesake, Henry Richard Vassall-Fox, Third Baron of Holland. In 2020, activists daubed the statue’s plinth with red handprints and placed a cardboard sign in the statue’s arms reading “I owned 401 slaves.” Then as now, London’s wealth is found “in bricks, stones, bodies and bones.”

Southwest of Holland Park is Cromwell Road, where three lanes of rush-hour traffic pass more rows of white stucco, the terraces broken by the occasional squat supermarket or multi-storey hotel, including the old Holiday Inn, an ugly example of 1970s brutalism. Now empty, it’s the site of another protracted planning dispute. In 2018, when developers proposed demolition to build a larger, more contemporary hotel, the Royal Borough received 750 objections arguing that the project would “replace one ‘out-of-place monstrosity’ with an even bigger one.” Approval was denied, but two years later, London mayor Sadiq Khan intervened to give the project the green light. His price was a little bit of additional housing — the developers will build sixty-two units (up from forty-six) for residents on low incomes under the mayor’s affordable homes program.

It is a perhaps-inevitable irony that the architectural splendours we admire in London are the product of violence and exploitation. As Knowles writes, “Imperialism’s industrial, artistic and cultural swagger are stamped into the streets.”

But wealth can leave beneficial legacies. On the western side of Hampstead Heath sits a curious structure known as the Pergola. The 245-metre-long walkway, entwined with wisteria, roses and other climbing plants, affords vistas over the heath and its woodlands. It was built in the early twentieth century by Lord Leverhulme, aka William Lever, whose fortune came from the manufacture of soap and other cleaning products.

Lever was a progressive industrialist who supported universal suffrage and built housing for his workers at Port Sunlight, though there is evidence of forced labour and other abuses in his Congo and Solomon Islands operations. As part of Lever’s private estate, the Pergola was designed as a place for Lever to take a solitary walk, have a think, or stroll after lunch with fellow politicians and business figures.

Today, the Pergola is much-prized public space. As cultural geographer Timothy Edensor writes, this “structure for pleasurable walking” serves as an example of how contemporary city planners might better promote “pedestrian pleasures” into urban design.

Will London’s latest “gilded age” bequeath comparable legacies? Knowles’s observations suggest the diggers excavating the city are driven by a “vacuous rapaciousness” that hollows out urban life. A “troubling and secretive presence,” the super-rich have “a profoundly damaging impact,” with their “endless search for new frontiers of luxury” constituting an environmental disaster.

Stringent personal security, she concludes, is merely a way of hiding the indefensible from public scrutiny. And yet for the rich themselves, the money that drives such wasteful, hidden opulence seems to create increasingly isolated, lonely and paranoid lives.

In Virginia Lee Burton’s book, Mike Mulligan and Mary Anne can’t escape the pit they have dug for themselves. But their story nevertheless ends well. At the urging of a young boy who has been watching them work, the new town hall is built around them. Mary Anne is converted into the boiler that keeps the building warm and Mike is invited to be its permanent caretaker. They become the warm heart of the community. For the diggers of London, no such ending is in sight. •

Serious Money: Walking Plutocratic London
By Caroline Knowles | Penguin | $55 | 320 pages

* After this article was published, Inside Story received an email from a senior account executive at the The Academy PR, a public relations firm whose clients include Canary Wharf, to say that “in fact Canary Wharf is a public space, open to the public at all times and free to access.” When I visited Canary Wharf, I read and photographed a sign with the following text:

This is private property and no right of way, public or private, is acknowledged over it. Any use of this land is with the permission of the landowner.

Although I wrote that Canary Wharf “isn’t a public space,” it would be more accurate to describe it as a “privately owned public space” in line with the definition used by Greenspace Information for Greater London: “publicly accessible spaces which are provided and maintained by private developers, offices or residential building owners.”

My overall point is not that the residents of Stepney housing estates are no longer free to visit Henry Moore’s “Old Flo”; rather, its relocation to Canary Wharf means it now resides in an entirely different world.

— Peter Mares