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The Sunday Telegraph: The ties that bind


Anyone who has ventured too close to the electric fence surrounding Boris Berezovsky’s sprawling mansion in Wentworth, Surrey, will know: the Russians are very much here.

The exiled tycoon is one of more than 300,000 Russians now living in Britain and, despite the apparent chill in relations between the two countries, the social and economic ties binding them have never been stronger.

At the end of the Cold War, there were just a few thousand Russians in Britain, many of whom did not stay longer than a few months. How times change. From billionaires to barbers, nannies to neurologists, Russians now permeate every sphere of our working life.

A recent study found that Russians had bought up homes worth £2.2 billion in the UK since 2000, more than investors from the US and the Middle East combined. In 2000, they spent more than £93 million on houses and flats; so far this year that figure has already topped £800 million.

If they are here, we are also there. UK companies are now selling goods and services worth more than £3 billion to Russia every year and Britain was the biggest foreign investor in the country last year, including household names such as Monsoon and Marks & Spencer.

Some are doing spectacularly well. Scottish & Newcastle, the brewer behind John Smith’s and Newcastle Brown Ale, is Russia’s largest beer company, through a company it co-owns with Carlsberg, its Danish rival.

Other companies with interests there include Imperial Tobacco, the manufacturer of Lambert & Butler cigarettes, Rexam, the drinks can maker, Kingfisher, the parent company of B & Q, and Aviva, the insurance group that owns Norwich Union. The list goes on.

Corruption abounds. Although few companies will admit this publicly, examples occasionally creep out. In December 2004 Ikea, the Swedish retailer, was forced to delay the opening of an outlet in a north Moscow suburb after it rebuffed alleged bribery requests from a local authority.

It was Britain’s oil companies that blazed the trail for UK investment into Russia around a decade ago. And it is in the oil industry where the first real signs of strain between the Kremlin and business have emerged.

Late last year Shell, the UK-Dutch giant, was forced to sell a majority shareholding in its £10 billion Sakhalin Island project to Gazprom, Russia’s state-owned oil company. That followed months of pressure from a junior government minister over allegations that Shell had breached numerous environmental regulations. BP has suffered a similar fate.

Peter Hambro Mining and Imperial Energy have both been involved in recent spats with the Kremlin.

These concerns aside, neither side wants the lucrative business relationship between the two countries to be threatened. The Russian business community is extremely worried that the Kremlin could be seen to rock the boat.

London has been a lucrative source of funding for them: over the past few years, more than 50 Russian businesses have listed their shares on the London Stock Exchange. Their success could be scuppered if relations continue to sour. “Russia needs the West and the West needs Russia,” says the chief executive of a London-based Russian business consultancy. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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