Harrods sold us a fantasy

Other attractions include the UK’s controversial “non-dom” status, allowing wealth earned and kept overseas to avoid tax for 15 years, and “golden visas” that offer fast-tracked residency rights in exchange for investment. Add to this the appeal of the London property market, with more than 62,000 London homes registered to overseas owners.

But we should not overlook the importance of lifestyle and status symbols. Britain has a genius for luring High Net-Worth Individuals into a kind of fantasy world—a world where the First World War never happened, and the most modern luxuries somehow coexist with an eternal Edwardian splendor. Townhouses in Mayfair and Chelsea maintain their stately exteriors, even as they conceal vast underground swimming pools and garages stuffed with Range Rovers. Public schools and universities offer their overseas students the trappings of British tradition, together with the most up-to-date facilities. From the Old War Office in Whitehall (now the Raffles OWO hotel) to Admiralty Arch in Trafalgar Square (soon to be a Waldorf Astoria), London’s architectural heritage is being sold off and repurposed for luxury hospitality.

“Britain has a genius for bringing High Net-Worth Individuals into a kind of fantasy world.”

This is a trend that Al Fayed’s Harrods anticipated and tested to the limit. Its baroque facades and cavernous, gorgeously decorated interiors, along with a heavy emphasis on its British heritage, provide an irresistible veil of respectability and aesthetic refinement (“enter a different world”, as the store’s slogan used to go). Behind that veil, as recent testimonies claim, Al Fayed oversaw an insidious regime of surveillance and intimidation. But it also provided an ideal backdrop for the increasingly cosmopolitan business of luxury retail, where “pretty graduate English girls” with white skin — Al Fayed’s specifications, according to a former HR employee — sold Italian handbags, French perfumes and Swiss watches to wealthy clients from all corners of Eurasia. By 2020, Chinese customers were responsible for 25% of sales at Harrods, while the store claimed that it represented half of Middle-Eastern spending in the UK.

It is one thing to entertain foreign customers in this way; more remarkable is that, all the while, institutions such as Harrods have maintained their position as familiar landmarks in British life. Perhaps this is my own foreign background speaking, but even as a child, I was vaguely aware that public life in the UK was littered with grand-sounding traditions which had been popularized as tourist attractions, from Ascot and Wimbledon to the royal family itself. Harrods was one of the words in this lexicon. The store’s glamorous visitors occupied the gossip pages in much the same way, it now occurs to me, that the personal lives of the aristocracy had a century earlier. The shrine to Diana and Dodi should be seen in this context: it showed an understanding that Harrods is not just a luxury brand but, in some peculiarly British way, a popular one.

The broader point is that we have been more accepting of the fantasies created by the likes of Al Fayed than we like to admit. London’s “private wealth community”, as its richest inhabitants are sometimes hilariously called, has long enjoyed the blessing of British governments. New Labor and Tory chancellors have justified their privileged treatment on the grounds that, if such individuals are not appeased, they will simply take their money and businesses elsewhere. But such threats have been successful because another, unspoken logic has been operating at the same time. As much of Britain has struggled economically, the ability to attract a wealthy elite — and one that celebrates traditional symbols of Britishness — has provided the illusion of a successful, affluent country. Even whose own experience contradicts this idea might still want to believe it.

But the allegations against Al Fayed, however, have come as London’s appeal to private wealth appears to be waning. With Labour’s plan to trim down non-doms’ benefits (which the Conservatives promised as well), and to levy VAT on private education, the advisory firm Henley & Partners is predicting the departure of almost 10,000 millionaires from the UK this year. Only China faces a larger exodus. In fact, Britain has been shedding wealthy residents since 2017. This is partly due to the decline of the London Stock Exchange and Brexit-related shifts in finance and trade. But other causes include a deteriorating health system and rising crime — including violent watch thefts outside Harrods itself. The real London can no longer be kept separate from the imagined one.