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Slumlands — filthy secret of the modern mega-city

Across the world, slums are home to a billion people. The rich elite want the shanty towns cleared,

There is a long curve of water and, as far as the eye can see, there are shacks, garbage, washing, tin, bits of wood, scraps of cloth, rats and children. The water is grey, but at the edges there's a flotsam of multicoloured plastic rubbish. This is the Estero de San Miguel, the front line in an undeclared war between the rich and poor of Manila. Figures emerge from creaky doors to move along bits of walkway. In the deep distance is the dome of a mosque; beyond that are skyscrapers.

Mena Cinco, a community leader here, volunteers to take me in - but only about 50 yards. After that, she cannot guarantee my safety. At the bottom of a ladder, the central mystery of the Estero de San Miguel is revealed: a long tunnel, four feet wide, dark except for the occasional bare bulb. It's just like an old coal mine, with rickety joists, shafts of light and pools of what I'm hoping is water on the floor. All along the tunnel are doors into the homes of as many as 6,000 people.

We knock on the first one that's ajar. Oliver Baldera comes blinking to it, pulling on his shirt. On the floor behind him are his four kids, eating ice cream. His wife joins him.

The room is eight feet by eight and forms their entire dwelling space. It contains everything they own: a television, four bowls of ice cream, a light bulb, a mattress and the clothes they are wearing. "We've been here more than ten years," he says. "There's no choice. I'm a carpenter in the construction industry. We came from Mindanao."

Why did he move? "Because of poverty. It's easier to get a job here and I can earn 400 pesos a day. I can send the kids to school and they eat three times a day - but it's not enough. I need more space."

“But they're happy," Mena chips in.

Further along, there's a shaft of light and some kids are splashing about in a blow-up pool. Mena makes them sing. One of them comes up to me. "What's it like living here?" I ask. Mena mutters something to him in Filipino. "Happy," he says, and smiles.

This is a place where you cannot stride along without hitting your head or bruising your elbow, so people creep and shuffle. Here, you cannot go to the toilet without standing in a queue. Here, sex between a man and a woman has tohappen within breathing distance of their kids and earshot of 20 other families. This is the classic 21st-century slum. A billion people live in them, one in seven of the world's population. By 2050, according to the United Nations, there could be three billion. The slum is the filthy secret of the modern mega-city, the hidden achievement of 20 years ofuntrammelled market forces, greed, neglect and graft.

Yet Mena, at my elbow, is feeding me an incessant mantra: "We are happy; there is social cohesion here; we are organised; it is clean." The reason is this - the Estero de San Miguel has been condemned. The president of the Philippines, Benigno "Noynoy" Aquino, has decided to clear Manila's slums and send half a million people back to the countryside. That suits the business elite and the political clans that run the country fine. "Many of our people are no longer interested in agriculture, so we need to give them incentives to go back," says Cecilia Alba, head of the national Housing and Urban Development Co-ordinating Council. "If we had to rehouse the slum-dwellers inside Manila in medium-rise housing, it would cost a third of the national budget."

At the top of the list for relocation are the residents of the Estero de San Miguel. They will not go without a fight. "We will barricade and we will revolt if we have to," Mena says. "We will resist slum clearance and we will fight to defend our community. We are happy here."

This is not an idle threat. On 28 April, residents of the Laperal slum a few miles away engaged demolition teams with Molotov cocktails and guns in a riot that injured six policemen and numerous slum-dwellers. An arson attack had wiped out most of the area's dwellings ten days earlier.

Technically, global policy is on the side of the rioters. In 2003, an influential UN report, entitled The Challenge of Slums, signalled a shift away from the old slum-clearance policies and recognised that informal settlements make positive contributions to economic development. They house new migrants; because they are dense, they use land efficiently; they are culturally diverse; and they offer numerous opportunities for ragged-trousered entrepreneurs.

“Ten years ago, we used to dream that cities would become slum-free," says Muhammad Khadim of UN-Habitat. "The approach has changed. People see the positives. The approach now is not to clear them but to improve them gradually [and] regularise land tenure."

Cameron Sinclair, who runs the non-profit design firm Architecture for Humanity, goes further. "A slum is a resilient urban animal. You cannot pry it away," he tells me. "It's like a good parasite. There are some parasites that attack the body and you have to get rid of them but, within the city, the informal settlement is a parasite that acts in harmony with the city, keeps it in check."

Sinclair, whose organisation has upgraded slums in Brazil, Kenya and South Africa, believes that modern city design should not only tolerate slums but learn from them - and even emulate them. "To be honest, what we lack in a place like London is that the lower classes can't live in central London and have to commute for two and a half hours to do the jobs that keep people going."

What has driven the new thinking is ugly economic facts. After the 1970s, there was a sharp slowdown in the provision of social housing. The free-market revolution in the cities has led to the retreat of state provision, the rise of the informal economy and the rapid impoverishment of the rural poor. As a result, we are having to ask ourselves a question that would have made the 19th-century fathers of city planning shudder: do we have to learn to live with slums for ever?

It's a question to which the Filipino political elite have defiantly answered no.

“Should I buy them ice cream?" Regina "Gina" Lopez asks me, tilting her white Stetson as she leads me through what is left of a slum called the Estero de Paco. Teenage boys wearing hip-hop clothes and baseball hats are crowding, shirtless, around Gina. It's one of their birthdays, so should she buy them ice cream? Gina's trouser suit is the colour of ice cream. She is lithe, slinky and 61 years old. Among the 30 people with her are two cops, a media team of six, guys from the local community, her bodyguards, factotums and a man in dark glasses who is carrying her handbag.

Gina is a TV star, philanthropist, boss of the Pasig River Rehabilitation Commission and, most importantly, a member of the Lopez family. Lopez Inc owns much of downtown Manila - the energy company, a TV empire, a phone company - and has interests in all kinds of infrastructure, including water. Who better than Gina, in a country untroubled by worries about conflict of interest, to lead the forcible removal of slum-dwellers from the waterways?

The Estero de Paco used to have slums right down to the water's edge, just like the San Miguel. Now, instead of shacks, there is a neat border of agapanthus and rubber plants. State-of-the-art oxidation units are turning the brown sludge into something chemically close to H2O. Into the space that has been cleared, work gangs are laying a wide-bore sewage pipe.

As Gina approaches, a group of women from the slum falls into line and salutes. The women are middle-aged and poor; their T-shirts bear the words "River Warriors". They stand to attention and Gina, Prada-clad, goes into a drill routine: "River Warriors, atten . . . shun!" Then there are slogans about honour and playing for the team and some more of the drill, before they all fall about laughing. "I ordered them to dive into the water," she giggles.

The idea behind the River Warriors is serious. The clearance of the Estero de Paco was "non-negotiable". The Warriors' job is to make sure that those who have been cleared do not come back. "They will poo here! They will throw garbage," Gina says. "They would come back, if we didn't guard the place. So we work with the ones who are compliant. To make a change like this, you have to work with a chosen few, the vanguard."

The clearance programme works like a giant scalpel. Four metres of land is all that is needed to create the easement for the waste pipe, so a second, deeper layer of slums remains - you can see where something has sheared through walls, windows, dirt, alleyways. This is social engineering on a vast scale. It's what the government has decreed for half a million people. Like the slum-clearers of 19th-century London and New York, Gina has a missionary enthusiasm. "You can't live well if you're faced with the constant smell of faeces, right? You can't live a decent life on top of a sewer. Even if those people want to stay there, [they can't because] it has a wider impact on the city, the environment: we can't clean the water and bring the river back to life if they're there; the crime and sickness have a big impact on the environment."

With Gina out of earshot, two of the River Warrior women quietly tell me that they are secret returnees. They were moved on to a place called Calauan, four hours away by road, but have come back. I demand to see Calauan. "No problem," says Gina, flipping open her mobile phone. "Get me aviation."

The chopper skims low across Manila Bay. It's fringed with slums and, out in the bay, there are homes on stilts. "Even the sea is squatted," Monchet Olives, Gina's chief of staff, tells me. Soon, the skyscraper outline of downtown Manila disappears. We're above rice paddies; in the distance, there are mountains. Calauan comes into view - neat rows of single-storey housing, their tin roofs glinting. The whole complex houses about 6,000 families and there is room for many more.

On the streets, density is not a problem. The public space is deserted. There's a playground; there's a school with the name Oscar Lopez painted on the roof. The problem is - as Monchet concedes - there is no electricity, no running water and no prospect of ever getting any. And no jobs. "When it comes to electricity, we're between a rock and a hard place," he says. "Many of the new residents have never been used to paying bills, and the electricity company, to make the investment, needs an income stream that they just can't provide."

I notice that we're being shadowed by two soldiers, in camouflage and with assault rifles, on motorbikes. "That's because of the New People's Army. Guerrilla activity is what made them abandon this place for ten years."

Deep in the jungle? "No, just up there on the hill." Monchet waves his finger in the general direction of the landscape, which suddenly looks a lot like the treeline in the opening credits of Apocalypse Now.

Ruben Petrache was one of those who moved here from the Estero de Paco. He is in his fifties and has been seriously ill. His home is a spacious terraced hut. It has a tin roof, tinfoil in­sulation to keep the heat down, a pretty garden and a "mezzanine" arrangement that creates two bedrooms, such as you would see in a loft. Ruben's English is not so good, so Monchet translates: "What he's saying is that although the community is disrupted, he thinks it's better here. For him, at least. Once you get here, after a while, you realise that you'd become accustomed to conditions that were insanitary. You learn to move on, live in a new way."

For electricity, he points to the solar panel; for water, to the barrel collecting rainwater on his porch. Are there any downsides?

“It would be better if there was a factory here, because we need more jobs," Monchet summarises. Later, with a translator, I work out what Ruben, hand-picked by the camp's authorities, was trying to say: "What the people need is a job. We need a company nearby so that we don't have to go to Manila. Also, we need electricity. Many residents here know how to fix electric fans, radios, but the problem is, even if they have the skills, they cannot [use] it because there is no electricity here - so they are forced to go to Manila to find work and earn money to buy food.

“We are hard workers. If we don't do anything, we might die of hunger here. That's why many go back to Manila: to look for work and earn money."
In the covered market, the stalls are stocked with meat, rice and vegetables but there are more stallholders than shoppers. Gloria Cruz, a 38-year-old mother, is holding forth on a kara­oke machine to three toddlers, two other mums, the ArmaLite-toting soldiers and me. After a couple of verses, she hits the pause button. "My husband goes to Manila to work," she says. "He comes back at weekends. It's the same for everybody. There's nothing here."

Felino Palafox is an architect who specialises in the construction of vast, space-age projects in the Middle East and Asia - mosques, Buddhist temples, futuristic towers on the Persian Gulf - always for people with money to burn.

Now, however, he wants to save the Estero de San Miguel: to rebuild it, in situ, with new materials. The plan is to clear it bit by bit and put inmodular housing. Each plot will be ten square metres; the ground floor will be reserved for retail and tricycle parking, the floors above extending out above the walkway, just as slum-dwellers build their homes - "stealing the air from the planning authorities", Palafox calls it. "The slum-dwellers," he adds, "are experts at live-work space design. They spontaneously do mixed-use! We just have to learn from them."

From the roof of the tower block in Makati, the central business district, where his practice has its headquarters, he gives me a primer in what has gone wrong. He indicates the neighbouring tower blocks - "monuments to graft" - and the gated compounds downtown where the rich live. To the government, which says his design is too expensive, he says: "OK, the total cost of rehousing slum-dwellers in situ is 30 per cent of GDP [but] I calculate we lose about 30 per cent of the country's wealth through corruption. If we didn't have corruption, we wouldn't need to tolerate slums." He sees the Estero de San Miguel as a test case: if he can make it work there, it's scalable to each of the city's riverside slums. So the stakes are huge.

Father Norberto Carcellar, who has worked for much of his life with Manila's poor, thinks that the elite are engaged in a huge self-deception about the question of slum clearance: "We have to recognise the value of slum-dwellers to the city. These are the ones who drive your car, clean your house and run your store. If these people were cleared from the city, the city would die. Slum-dwellers add social, political and economic value to the city."

That sentiment would have seemed alien to our grandparents' generation: I can still hear mine, brought up in Edwardian poverty in a coal and cotton town in northern England, spitting out the word "slum" with disgust. For them, slums meant a dog-eat-dog, dirty world where solidarity could not flourish and people lived like animals and treated their kids worse. Thirty years of globalisation have produced something which defies that stereotype. With Mena at my side, I'm about to witness it.

As it is Saturday night, there is a full complement of beefy guys with sticks, rice flails and flashlights - the volunteer police force of the Estero de San Miguel. Mena and I turn off into an alleyway opposite a McDonald's. You would hardly know it's there. The passage narrows, jinks around, and suddenly it feels as if I am in a novel by Charles Dickens.

On a bridge that is less than a metre wide, a man is squatting beside a barbecue. Because of the smoke, I don't see that it is a bridge until
I'm on it, or that below us is the canal, which is about two metres wide here. The dwellings are built so close together that the mothers peering out of the upstairs bedrooms, made of wooden boxes, could shake their neighbours' hands. If you'd decided to remake Oliver Twist as an expressionist film and this was the proposed set design, you would probably sack the designer, saying: "It's too much, too grotesque."

We head down into the tunnel, stooping now, because it is less than five feet high. After passing a poker game and a stray chicken, I come to a store that is run by Agnes Cabagauan. It sells the same things as every slum store in the world: sachets of Silvikrin hair product, Cif, Head & Shoulders shampoo, the Filipino version of Marlboro cigarettes, lighters, tampons and chewing gum. "My parents helped me set up [the store] to pay for my education," Agnes tells me.

What are you studying?

“Business admin. I have a degree. I also have a day job in a large corporation - coding in a sales department."

And you live here? "Yes. I was born here." She is 22 years old.

Then we run into Mena's son; he's an engineering student. As we cross another bridge, the unmistakable whizz and pop of something digital come blasting across the stagnant water. It's an internet café. There are nine computers crammed into a plywood hut. A dog yaps and runs around; the light is harsh. Some kids are on Facebook. Others are playing online poker. One young woman is doing her CV, another is engrossed in a game called Audition. She, too, is at college, she tells me, multitasking between her BlackBerry and the game.

Business admin? Yup.

In the space of a hundred yards, I have encountered three graduates, a DIY police force and the social media revolution. As I become used to the smoke, the wail and chatter of children, the chickens and the confined space, I learn what a billion people have had to learn: it's not so bad. "Other places have prostitution. We don't," Mena says. "We get drunks and a bit of drug-taking but it's under control. We look out for each other. We can see everything that happens - it's one big family. The main job for the volunteer police force is to look out for arsonists. Settlements under threat of clearance have a habit of getting burned down." As she discourses on the fine details of social policy in the five-foot-high niche that is her living room and kitchen, I ask the question I should have posed when we first met. How did she become so politically literate?

“I majored in political science at the University of Manila."

What slum-dwellers have produced (and I've seen it not just here but in Cairo, Nairobi, Lima and La Paz) is something the slum clearance tsars of yesteryear would not recognise - the orderly, solidaristic slum, or what the UN calls the "slum of hope".

The debate, at the global level, is no longer about how fast to tear these places down but whether we can meet the rapidly developing aspirations of highly educated people in tin shacks. To those who dream that, as capitalism develops, it will eradicate slums, Sinclair of Architecture for Humanity says dream on. "You can't fight something that has a stronger model than you [do]. It's never going to happen again. The fact of it is that if you tried to do it in some of these informal settlements, they could take out the city . . . march on the central business district, and it's game over."

Paul Mason reports from Manila on Tuesday 16 August in "Slums 101" (Radio 4, 8pm) and on "Newsnight" (BBC2, 10.30pm).

This article first appeared in the 08 August 2011 issue of the New Statesman, Slum rule

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Arron Banks: the man who bought Brexit

He gave £1m to Ukip and spent £7.5m on the Leave campaign. He is friendly with Trump, hates Cameron and admires Putin – now he has Labour voters in his sights.

In 2011 Arron Banks floated Brightside, a Bristol-based insurance broker he had built from practically nothing. Unlike Banks, the new investors wanted to cash in, so the following year they unceremoniously sacked him as chief executive of the company and then in 2014 they sold Brightside to the private equity firm AnaCap for £130m.

Hours after his dismissal Banks, still fuming, went out to lunch with the firm’s commercial director, John Gannon, who had helped him start the business in 2005. In the car Gannon said how bad he felt. He explained how he’d had little choice but to go along with the decision. As they arrived at the Aztec Hotel and Spa, Gannon asked if there was anything he could do to make Banks feel better.

“I said, ‘There is one thing that will make me immediately feel better,’” Banks recalled recently. “‘All I want to do is hit you in the face.’ So he said, ‘Which way would you like me to turn my cheek?’ So he turns to the left and ‘bosh!’ – I hit him as hard as I could and he went over like a bag of cement.” The two men then ate lunch in silence as Gannon pressed an ice bag to his cheek.

Banks’s hunger for revenge did not stop there, however. Within six months he founded a new company, GoSkippy, and proceeded to poach Brightside’s best employees. He sent gloating emails to those former colleagues who had, he said, “stabbed me in the chest”. In one message he bragged: “Virtually all the sales team have left for Skippy – leaving the tea boy in charge.” In another he wrote: “You have no stats, no claims department, no rating engine and f*** all chance of persuading anyone to help create a new insurance vehicle.” In a third he said that being sacked “was like a pair of jump leads; it just fuelled the fires and the desire to show what can be done”. For good measure, after a series of claims and counterclaims, he won an out-of-court settlement from Brightside which cost his former company a few more million.

The saga says much about Banks, the man who subsequently deployed his fortune to campaign for Britain’s exit from the European Union. He is someone you cross or slight at your peril. Speaking on condition of anonymity, which is how most people chose to speak to me about Banks, an insurance industry expert said: “Arron is charming, charismatic and pretty popular in insurance circles. He’s great fun, but the thing about him is he’s very pugnacious. If he feels like you’ve crossed him he’ll come at you with all guns blazing.”

That is a lesson the Conservative hierarchy has also learned. Until 2014 Banks was a Tory party member and a modest donor. He then decided to defect to the UK Independence Party. Amid the pre-election hubbub of that autumn’s Tory conference, Ukip summoned political journalists to a press conference at Old Down Manor, on a Gloucestershire estate that Banks owns, to announce that he was giving it £100,000.

At that time the insurance magnate was hardly a household name, and the occasion was in danger of becoming an embarrassing non-event. But William Hague, the then leader of the House of Commons, inadvertently saved the day. He made the mistake of describing Banks in a radio interview as “somebody we haven’t heard of”. This, as Nigel Farage told me with a laugh, was probably true, because by then Banks had only donated to his constituency party. Banks was nonetheless incensed. He immediately upped his donation to £1m. Hague “called me nobody”, he told the journalists. “Now he knows who I am.”

As in the Brightside saga, Banks did not stop there. He claims to have pumped £7.5m into the Brexit campaign over the past year, most of it to Leave.EU, which is one of the two groups that championed Britain’s departure from the European Union in June’s referendum. That may well be the single biggest donation to a political cause in British history – and arguably it helped change the course of British history.

While most commentators focused on the official Vote Leave campaign and its high-profile political frontmen, such as Boris Johnson and Michael Gove, Leave.EU used social media to galvanise disgruntled blue-collar white voters of the north and Midlands. While Vote Leave concentrated primarily on the economic and sovereignty issues of interest to middle-class Tories, Leave.EU focused relentlessly, shamelessly and often outrageously on immigration. Much of its populist strategy was taken directly from the US presidential campaign of Donald Trump, a man with whom Banks feels such an affinity that his WhatsApp picture shows the two of them standing side by side, smiling at the camera and giving thumbs-up signs.

Few politicians or pundits are inclined to give Leave.EU much credit for Brexit’s victory, but there is a great deal of anecdotal evidence that the voters it targeted turned out in record numbers, and it is far from implausible to suggest that its campaign made all the difference in a very close contest. A senior official in the Leave camp – no friend of Banks – acknowledged that a combination of Leave.EU’s social media operation and Farage’s tub-thumping rallies “combined to connect with a large chunk of the blue-collar vote which ultimately proved absolutely critical to the result”.

Matthew Goodwin, a professor of politics at the University of Kent and co-author of Revolt on the Right, about the radical right in Britain, told me: “There’s an awkward attempt under way by those in Vote Leave to say, ‘We were responsible for the result. This had nothing to do with Ukip and Arron Banks, and if anything Vote Leave won in spite of the more hard-edged Eurosceptics.’ I completely disagree with that analysis.”

The vote set Britain on the road to Brexit but did much more than that. It shook a political establishment that Banks regards as self-serving, elitist and corrupt. David Cameron resigned, Labour sank into civil war, and in her speech to the Tory conference on 6 October, Prime Minister Theresa May sought to woo precisely the people who had been targeted by Leave.EU as she drastically repositioned her party.

But Banks is still not finished. He now plans to turn Leave.EU’s legions of supporters into an online “people’s movement”. He wants “to give voice to the forgotten millions of English people” who feel ignored by the political establishment, to an “England rising”. He intends to launch this latest quixotic venture early next year, and his goal is to ensure not only that Brexit – hard Brexit – is implemented in full, but to bring about deep reform of the system he so detests. “We can’t carry on with politics as normal,” he says. “It’s a disastrous state of affairs.”

“Don’t underestimate him,” Goodwin warns. “The fact he has a lot of resources, the fact he’s clearly willing to throw them into politics, and the fact he’s now got a track record of building networks and attracting a large database of registered supporters
means anything he does has to be taken seriously . . . My feeling is he’s ideally positioned to build something that could potentially have a very big impact on British politics.”

But just who is this maverick who has risen from obscurity over the past two years and used his wealth to exert a considerable, some would say alarming, degree of influence over our national life?




Banks’s driver, a burly former rugby player, collects me from Bristol Parkway Station in a sleek black BMW, but I soon discover that there’s nothing particularly grand about Banks. I walk into his second-floor office in a bland building on a nearby trading estate to find him wearing a T-shirt, shorts and trainers. He has been to the gym, he explains. He is 50 and needs to lose weight. He had a health scare in South Africa during the summer – a heart problem that required hospital treatment.

The office is light and spacious but unpretentious, save for a photograph of Banks shaking hands with the Prince of Wales at a Royal Commonwealth Society function. It was taken before he joined Ukip, he says with a grin. Before he became a pariah, in other words. On the windowsill is a book called 100 Good Things About the EU: between the covers, every page is blank.

As an ardent Remainer, I am expecting to dislike the man intensely, but I find him disarmingly humorous and frank. We chat for nearly four hours. Whether he is merely generous with his time, or loves the attention, I cannot tell.

He says he was born in Knutsford, Cheshire, and raised by his mother in Basingstoke, Hampshire, while his father managed sugar estates in various African countries – South Africa, Kenya, Somalia, Ghana – that they would visit for holidays. “He was awarded an OBE for services to sugar, which is more than I’ll ever get for services to Brexit,” Banks notes wryly.

At 13 he was sent to a “third-rate” boarding school, Crookham Court in Berkshire, which closed in 1989 after Esther Rantzen’s That’s Life programme exposed three of its teachers as paedophiles. He was never abused: he was too busy committing his own transgressions, getting expelled for an “accumulation of offences” that included selling lead filched from the roofs of school buildings. He accepts that his expulsion was entirely justified. It would have happened much earlier, he says, except that the struggling institution needed his fees.

He moved on to St Bartholomew’s in Newbury but was expelled again, this time for a “monumental pub crawl” that ended in a daredevil car stunt. His “lack of educational attainment” ruled out university, so he returned to Basingstoke, where he sold paintings, then vacuum cleaners, then houses. “I was quite good at persuading people to buy things they didn’t want to buy,” he says.

Inspired by Margaret Thatcher, he joined the Young Conservatives and sought election to Basingstoke Council for the Labour-held ward of Norden. He lost, despite buying a Labrador dog to broaden his appeal. He never ran for office again.

It was through the Young Conservatives that he met his first wife, Caroline, a teacher whom he married at 21. “Her parents really didn’t like me,” he recalls, laughing. “I think they wanted their daughter to marry a country solicitor or someone with prospects. When I asked her father [a dentist] if I could marry her he said, ‘No, you can’t.’ I remember writing him a stinking letter along the lines of ‘Who the hell do you think you are?’ which didn’t improve matters.”

A neighbour found him an entry-level job at Lloyd’s of London. He stayed seven years, rising to become a deputy underwriter before being recruited to run Norwich Union’s Bristol office. Later he worked as a consultant for Warren Buffett’s Berkshire Hathaway group. A framed $5 bill signed by Buffett hangs on his office wall, alongside a certificate for a single Berkshire Hathaway share that Banks bought for $83,000 a decade ago. It is now worth $216,000.

But Banks was no corporate man. He was too impatient, intolerant, unorthodox. “As I got older I realised there was no respite from stupidity,” he says, so he set up on his own. From a small office above a bakery in Thornbury, Gloucestershire, he launched MotorCycle Direct, which sold insurance to bikers over the phone. After two or three years he sold the firm for “a few million” and opened Commercial Vehicle Direct, which catered for White Van Man. “Within a very short period we were the largest van insurance company in the country,” he says. CVD duly morphed into Brightside, which expanded into multiple forms of insurance – life, cars, homes, travel, pets.

Today Banks owns a majority stake in Conister Bank on the Isle of Man, and several insurance-related businesses, some of which are based on the same island or in two other offshore tax havens: Gibraltar and the British Virgin Islands. But he makes no apologies. “I don’t give a monkey’s. I live in England. I pay tax in England . . . My position is: if you don’t like it change the law. Business people will always go for the most efficient thing.” He does little business outside the UK, and so will suffer little if Britain leaves the European single market.

At one point Gibraltar’s financial regulator ordered one of his companies, Southern Rock, which underwrites GoSkippy’s policies, to increase its reserves substantially in order to cover potential payouts. Banks responded as he so often does – aggressively. He threatened legal action. He also bought a full-page advertisement in the Telegraph attacking the regulator and PricewaterhouseCoopers, the accountancy firm; he accuses the regulator of having pressured PwC to exaggerate Southern Rock’s exposure.

Another curious incident involved a then 33-year-old female employee named Jo Featherby. The Sun reported that in 2012 Banks received an official warning from the police following claims that he had harassed her. Banks is unusually coy on the subject. He concedes he was given a warning, and that he settled Featherby’s claim for unfair dismissal out of court, but denies harassing her. He suggests he was merely trying to save her from a “pretty unpleasant boyfriend”, adding: “I probably intervened in something I should not have.”

His first marriage lasted ten years and produced two daughters, Charlotte and Sophie, both now in their twenties with Firsts from Exeter in history and bioscience. Charlotte works in marketing for the National Trust. Sophie, who opposed Brexit, is looking for her first job.

In 2001 he married again, this time to Ekaterina Paderina, known as Katya, a Russian from Yekaterinburg whom he met while attending a Britney Spears concert at the O2 Arena in London as the guest of an insurance
firm. Katya came to Britain in the 1990s to study marketing at Portsmouth University. She overstayed her visa but married Eric Butler, a merchant seaman who, at 54, was more than twice her age. The marriage ended within months, prompting officials to investigate whether it was a sham.

Years later the tabloids discovered that Michael Hancock, a disgraced former SDP/Liberal Democrat MP for Portsmouth with a history of assisting dubious young women from eastern Europe, had intervened to help Katya stay in the UK. That, plus her fluency in six languages and the fact that Yekaterinburg was once a closed city, led to suggestions that she was a spy. Banks responded by buying a personalised number plate for her Range Rover: X MI5 SPY.

Banks and Katya have raised three more children – Darren, 16, Olivia, 13, and Peter, 11 – who are all enrolled in expensive private schools (the older two board at King’s College, Taunton). “Why would I send them to a state school for a lousy education?” Banks says, when I ask how that squares with his leadership of the “People’s Movement”.

Sadly I did not meet Katya. She advertises herself on the website Model Mayhem as an aspiring actor: “I am fun and friendly with an extensive, glamorous wardrobe and a large house which could be used for location shoots. I will not do nudes.” And I had been repeatedly told how feisty she is, a description Banks cheerily confirms.

He recalls an occasion when they were guests in a corporate box at the Emirates Stadium when Arsenal played CSKA Moscow. Katya started cheering the Russians; the crowd below barracked her. She tried to climb out of the box to confront them, whereupon the stewards hauled her back and took her away for 30 minutes to cool off.

At one point the couple separated for a year. “We’re both quite eclectic, high-energy people and probably needed a break,” he says. “I was sent to the dog kennel for a period of time . . . In the end, we got bored of the divorce and legal bills and decided to give it a miss. You get so angry with the lawyer that it actually brings you together.”

By 2014, the year he defected to Ukip, Banks was riding high. He was worth more than £100m. Besides his insurance businesses, he had acquired five diamond mines – three that once belonged to De Beers in Kimberley, South Africa, and two in Lesotho. He had bought Old Down Manor from the Tubular Bells musician Mike Oldfield and transformed it into a wedding venue. He lived in a handsome stone house in the nearby village of Tockington (where a huge Union Jack flutters above the front lawn), and had another fine home overlooking a game reserve near Pretoria in South Africa. Oscar Pistorius was a neighbour.

He played hard. He owned racehorses. He went to Wimbledon each year and once played Virginia Wade at Queens at a corporate event, winning not a single game. He enjoyed squash, golf and shooting, and had run the London Marathon. He was a member of the RAC club in Pall Mall.

He was also charitable. He had competed in the East African Safari Classic Rally to raise money for Sentebale, Prince Harry’s children’s fund in Lesotho, distributing footballs bearing anti-Aids messages to schoolchildren en route. He had helped build a paediatric hospital in Belize and founded Love Saves the Day, a charity that finances microprojects for Lesotho women. Banks had also given nearly £200,000 to his local Conservative Association – £25,000 in cash and the rest a loan to enable it to buy its premises in Thornbury.

All of which prompts the question: why did he suddenly round on the Tories?



Banks cites his growing aversion to a Tory government led by Old Etonians which was presiding over a deepening gulf between Britain’s haves and have-nots.

“I hate Cameron – viscerally,” he says. “He was smart enough to get a first-class degree in politics and economics at Oxford University, and stupid enough not to realise the damage his policies were doing. Under his government the national debt doubled, interest rates collapsed to zero, the Sunday Times Rich List doubled or quadrupled and the average person’s wages flatlined. His economic policies were unacceptable.

“Cameron stuck in my throat because he was privileged in every possible way but too stupid to understand he should have been trying to help those who needed help.”

When I suggest that a man of his wealth makes an unlikely champion of the struggling working man, Banks retorts: “If you’re saying I should be poor to appreciate [the working man’s plight] I think that’s arrant nonsense.” His own paternal grandfather was a miner, he says. And he insists that he abhors inequality. He favours a near-100 per cent tax on inheritances of more than £5m.

His many critics offer other explanations. A disaffected Ukip ex-official says of his defection: “If you put up a poster saying ‘Look at Me’ outside the Odeon in Leicester Square you could not have made a bigger egotistical statement.” A senior figure in the Leave camp reckons that Banks – a provincial, self-made man who went to the wrong school and missed out on university – has “chips on both shoulders”, and that Hague’s put-down “was one of the most wounding things he could have said about [him]. Everything since that day has been about Banks trying to prove he’s a somebody.”

Others suggest that he had become, by his own admission, a “bored multimillionaire”, and simply saw an opportunity to make trouble and have some fun. “He loves to be mischievous, to upset the apple cart, to be a rebel – the boy who blows raspberries in front of the headmaster,” said a source who worked with him during the referendum.

The opportunity certainly existed in 2014. Ukip had won the elections to the European Parliament that May. Two Conservative MPs, Douglas Carswell and Mark Reckless, subsequently defected. The Tories were panicking. “If you ever wanted to jump into politics feet first and have an instant influence then Ukip was the place to do it,” said another former Ukip official. “Farage would have offered him the world. Banks would have thought it was bloody exciting. The party was right at the centre of politics, making headlines and flying high, and he could be up in the cockpit.”

In Farage, moreover, Banks would have seen a kindred spirit – an irreverent, rebellious outsider like himself who was scorned by the political establishment. Their first meeting over lunch at the RAC was not a success. Banks had flu and Farage wasn’t allowed to smoke – not even in the garden. “I had a terrible row with the waiters,” Farage recalls. But thereafter they got on famously. They shared a hatred of the EU – Banks calls it a “closed shop of bankrupt countries” and Britain’s membership “a first-class ticket on the Titanic”. They disdained all forms of political correctness, and they drank together.

“Banks became part of Nigel’s privy council of lads, part of his drinking entourage. They were like a group of best friends with their own secret words and hand gestures and in-jokes,” said the former Ukip official, who recalls several epic drinking sessions. “They regard the politically correct, nannying, self-righteous, sanctimonious, holier-than-thou liberal establishment with contempt and never miss an opportunity to poke it in the eye,” said another source who worked with Banks on Brexit. “They behave like a bunch of schoolboys on a day out – not the Bullingdon Club, but the lower fourth from a Coventry comprehensive.”

Farage puts it slightly differently. Banks “hates political correctness and career politicians and hedgers and trimmers and dissemblers”, he told me. “He’s just enormous fun to be with. When he lets his hair down, boy, he has fun. It’s refreshing to meet someone who knows how to enjoy life as he certainly does in spades.”




On the face of it, the general election of 2015 was a huge disappointment for Ukip. With the help of Banks’s money, the party won nearly four million votes and 13 per cent of the total, but just a single seat in the Commons. Even Farage fell short in Thanet South. Soon afterwards Banks emailed Andrew Reid, Ukip’s treasurer, to suggest that he take over as chief executive because the party organisation was so chaotic. “I’m currently paid a million pounds a year. So you get a million-a-year CEO for free,” Banks wrote. His offer was declined.

But Ukip’s erosion of the core Labour vote had helped the Tories unexpectedly to win an outright majority, with the result that their coalition with the Liberal Democrats was finished. That robbed David Cameron of any excuse for reneging on the promise he had made in 2013 to hold an In/Out referendum on Europe – a promise designed to stall Ukip’s rise. “Four million votes only got us one manky MP,” Banks says, “but it got us what we really wanted, which was the referendum.”

That July, Banks and his long-standing wingman, Andy Wigmore, took Farage off to Belize for a break. Wigmore is another colourful member of the Banks entourage – a naturalised Belizian who serves as trade and industry counsellor at the Belize High Commission in London and represented his country in trap shooting at the Commonwealth Games in Glasgow (he came last).

The three men stayed at Francis Ford Copolla’s Turtle Inn resort and went deep sea fishing, catching an eight-foot bull shark. They had a night of hard drinking in San Pedro on Ambergris Caye with Michael Ashcroft, the disaffected Tory peer who has extensive business interests in Belize. They also resolved to start preparing immediately for the referendum campaign, though Cameron had not yet set a date, and to create Leave.EU, which Banks would bankroll.

“He’s shown himself to be someone who doesn’t rush into things,” Farage says of Banks. “He thinks and talks, but once he’s made up his mind he goes for it in no uncertain way.”

Banks engaged the Washington campaign strategy firm Goddard Gunster to advise Leave.EU; it swiftly identified immigration as the critical issue and told him how to exploit it. As Banks recalled in the week after the referendum victory: “What they said early on was, ‘Facts don’t work,’ and that’s it. The Remain campaign featured fact, fact, fact, fact, fact. It just doesn’t work. You have got to connect with people emotionally. It’s the Trump success.”

He also employed Cambridge Analytica, another US company with several high-profile Republican clients, which explained the dark arts of targeted voter messaging. And he met members of Donald Trump’s fledgling presidential bid whose advice provided the bedrock for the Leave.EU campaign: don’t advertise – use social media and be outrageous, because, as Andy Wigmore put it: “The more outrageous you are, the more attention you get.” The result was indeed, by British standards, an egregiously outrageous campaign.

It began with a vicious battle for recognition between Vote Leave and Leave.EU – or rather with Grassroots Out, the umbrella organisation of which Leave.EU was the biggest component. Banks considered Vote Leave an elitist, out-of-touch Tory cartel and nicknamed its chief executive, Matthew Elliott, “Lord Elliott of Loserville”. When Carswell, Ukip’s only surviving MP, sided with Vote Leave, Banks infamously denounced him as “borderline autistic with mental illness wrapped in”.

For its part, Vote Leave considered Ukip and Farage toxic and found the focus on ­immigration distasteful. “The Tory posh boys saw the referendum as theirs to run. They would not discuss the issues we felt would excite the general British public . . . They wanted nothing to do with Ukip or me,” Farage told me with a chuckle.




Banks was furious when the Electoral Commission designated Vote Leave the official voice of the Out side, allowing it to spend £7m in the immediate run-up to the referendum and guaranteeing it free airtime. He threatened legal action, but reconsidered when told this could delay the vote.

Thereafter Leave.EU became, in Banks’s words, “the provisional wing of the Leave campaign”. Operating mainly from his offices in Bristol, it pumped out a stream of videos, cartoons, text messages and “news” clips which it posted on Facebook, Twitter, YouTube and other social media platforms.

Much of the comment was inflammatory, if not downright xenophobic. “Are you concerned about the amount of crime being committed in the UK by foreign criminals?” asked one video. “Are you worried about the overcrowding of the UK and the burden on the NHS?” another said. One tweet proclaimed: “Islamic extremism is a real threat to our way of life. Act now before we see an Orlando-style atrocity here,” referring to the deadly attack on a Florida nightclub by an Afghan American on 12 June.

Other messages were disingenuous at best. “Dave wants to give 75m Turks access to your #NHS!” said one, even though there is zero chance of Turkey joining the EU in the foreseeable future. Another quoted Victoria Beckham’s criticism of the EU without mentioning that it was 20 years old. Yet another cited General Sir Mike Jackson’s doubts about the EU but failed to mention that they came from a newspaper article in which he came down in favour of Britain’s continued membership. “We used their own words but picked the bits we wanted,” Banks says. He laughs as he recalls how he ordered a Leave.EU employee who had apologised to the furious general to call Jackson back and “unapologise”.

On occasion Leave.EU went too far even for Farage. In one video promoted by the group, Donald Trump likened Muslim immigrants to a snake that bites a kindly woman who seeks to help it – clearly implying that some immigrants were terrorists. “I wasn’t overly keen on that,” Farage told me. When Farage was excluded from the BBC’s Wembley debate, held two days before the vote, Leave.EU published the mobile-phone numbers of BBC executives and urged its followers to call them. “Nigel bollocked me for that,” Banks confesses. Following the murder of the pro-Remain Labour MP Jo Cox on 16 June, Banks commissioned an instant poll to gauge the effect – a move widely seen as distasteful.

“We picked fights with just about everyone,” Banks says, but the more the mainstream media and politicians fulminated at Leave.EU’s antics, the more they drew attention to its message. From Trump, “We learned how to use and abuse the mainstream media with their phoney outrage,” Banks says. “We fed off that fake outrage. All they were doing was giving us more ­oxygen . . . The mainstream media did more to grow our reach than anything else.”

Leave.EU claims that in some weeks it reached as many as 15 million people. One video was viewed 9.3 million times on Facebook. Several were watched more than a million times. Whenever someone “liked” or commented on one he or she was swiftly contacted by Leave.EU’s 70-strong call centre, also housed in the Bristol offices, and invited to join the cause. The Westminster bubble “never understood the power of the beast”, Banks says. “If Vote Leave had run the campaign without Nigel, Ukip and what we did, they’d have lost it hands down.”

The two Leave campaigns certainly dovetailed, albeit inadvertently. Vote Leave courted Tory Eurosceptics from the affluent shires. Leave.EU galvanised poorer, less educated, socially conservative voters in deprived parts of the country that Vote Leave could never hope to reach. Farage says Leave.EU was “largely responsible for finding them, contacting them and reaching out to them, using social media in a way no one in British politics has ever done before”.

Banks has no scruples about the tone or style of the Leave.EU campaign. “Politics is a dirty business,” he says. Indeed, he has written a soon-to-be-published book about the referendum that is gleefully entitled The Bad Boys of Brexit: Tales of Mischief, Mayhem and Guerrilla Warfare in the EU Referendum Campaign. His co-author is Isabel Oakeshott, the journalist who retailed the hotly disputed story, published in another recent book, about Cameron performing a lewd act on a dead pig while at Oxford.

“We always knew the referendum would come down to two things – the economy on the In side and immigration on the Out side, and that if you could keep the subject on immigration you would win,” Banks says. “What we would do was say things other people were thinking and not prepared to say and then not back down on it. We never back down on anything.”

Banks denies being racist. He claims to support immigration so long as it is controlled. But he does confess to being “tribal”, to feeling more affinity with our Anglo-Saxon “kith and kin” – Americans, Australians, New Zealanders and South Africans – than with other nationalities. “It’s part of a wider debate about: ‘Should we have our identity destroyed by this liberal globalism, or do we retain pride in our country and what we believe in?’”

He certainly does not apologise for using his substantial wealth to influence the vote. “It’s war,” he says. “If you don’t like it, change the rules. The In campaign was funded by Goldman Sachs, JPMorgan and a bunch of disreputable corporates. What’s worse?” And he argues: “Why shouldn’t I fight for what I believe in? To me it’s a matter of life and death for my country. We either get back control of our destiny or not.”

Nor does he hide the extent of Donald Trump’s influence on his campaigning style. He knows and likes Trump, saying he is “a lot more amiable and personable” in private. He also shares Trump’s contempt for the political establishment and mainstream media, and admires his ability to reach disaffected voters. Both Banks and Farage attended the Republican convention that nominated Trump in July. Banks was at the Mississippi rally on 24 August at which Farage endorsed Trump and he will attend the final presidential debate in Las Vegas on Wednesday. He thinks Trump will win in November, and would vote for him if he could, because Hillary Clinton “is a continuation of the failed policies of America”.

Banks shrugs off the uproar over Trump’s lewd comments about groping women which were caught on tape. “To a group of people they would probably be unacceptable. If you say them to a friend you know well as banter – so what?”

Does he share Trump’s admiration for Vladimir Putin? “I do in a way,” says Banks, who enjoyed a long, boozy lunch with the Russian ambassador to Britain at his residence during the referendum campaign. “He’s a nationalist, in the sense he’s trying to look after his country first and others second . . . I admire his strength as a politician but not necessarily all his policies.”

But Putin uses that strength to crush dissent, rig elections and close down the independent media, I point out. “You know as well as I do the words ‘independent media’ don’t mean anything,” Banks retorts. “Murdoch controls all of our terrestrial TV channels [sic], most of our newspapers . . . Maybe he [Putin] is just a bit more brutal in the way he does it.”

He suggests that the president’s military interventions in Ukraine and the Crimea were “a natural reaction to what the West has been doing . . .The Russians have their sphere of influence no different to the rest.” He even defends Russia’s robust military support for a Syrian regime that has used every conceivable barbarity against its own people. “The rebels and Isis are interchangeable,” he contends. “You have to be pragmatic. What’s more important – defeating Isis, or the civil war within Syria?”

At no point does he show any sympathy or understanding for the Syrian refugees who have sought refuge in Europe. Indeed, he defends Ukip’s highly controversial “Breaking Point” poster, showing a line of people queuing to move further north into the EU across the border between Slovenia and Croatia. Look at the picture closely, he says. “They are all young men in their twenties – economic migrants.”

Nor, for that matter, did he express any concern at the spate of anti-foreigner and racial attacks that followed the referendum, including one on a Polish cultural centre in Hammersmith, west London, on 26 June. “What’s a psok cultural centre [sic] when it’s
at home,” he tweeted. “Pack in the guardian connected outrage. Yawn . . .”





Last week, exactly two years after he defected to Ukip, Banks watched, bemused, as Theresa May delivered an establishment-bashing speech to the Tory party conference, courting the very constituency that Ukip and Leave.EU had targeted.

The Prime Minister called the referendum a “quiet revolution . . . in which millions of our fellow citizens stood up and said they were not prepared to be ignored any more”. She promised to champion “ordinary working-class people” not the “powerful and privileged”, to help those left behind by globalisation and to curb immigration. She berated those “politicians and commentators” who “find your patriotism distasteful, your concerns about immigration parochial, your views about crime illiberal”. It was “like watching Nigel in a skirt”, joked Banks, who backed Andrea Leadsom in the Tory leadership contest and does not believe May will deliver on her promises.

The previous day there had been another surprising development. Diane James resigned just 18 days after replacing Farage as Ukip’s leader, leaving Steven Woolfe as the favourite to succeed her. Then, last Thursday, Woolfe clashed with a fellow Ukip MEP and ended up in hospital in Strasbourg. Banks likes Woolfe, whom he regards as a credible and charismatic figure, with his northern working-class background, but acknowledges that “the Struggle in Strasbourg may well destroy him – he didn’t come out of it very well”.

Banks is now uncertain whether to continue funding Ukip, a party run by “a team of circus clowns”. Much depends, he says, on whether a viable leader emerges from the chaos: a leader capable of controlling the party and taking the battle to Labour. Theresa May has “frozen us out of the Tory side of the equation”, he says, but Ukip now has a “huge opportunity” in Labour’s heartlands because Jeremy Corbyn’s values “just don’t connect with the sort of blue-collar, socially conservative Labour people who voted for Mrs Thatcher”.

Yet Ukip is no longer the project that most enthuses him. Rather, it is his People’s Movement. Unusually, he and Farage disagree about this. Farage believes Banks should preserve the strong Leave.EU brand to fight for the full implementation of Brexit, sector by sector, but Banks has something far more ambitious in mind.

He wants to convert Leave.EU’s hundreds of thousands of followers into an online army, much like Beppe Grillo’s Five Star Movement in Italy, a force that transcends conventional party politics and the left-right divide. He envisages it as an exercise in direct democracy, a forum where people can post, debate and vote on ideas – and then embrace them in such numbers that politicians are compelled to respond.

The People’s Movement would not be linked to Ukip. It would work to ensure that Brexit is fully implemented, but it would also press for profound political reforms, such as replacing the House of Lords with an elected senate, halving the size of the Commons and introducing fixed terms for MPs. Banks is exploring other bold ideas – ideas that he hopes will appeal to voters of any party – such as replacing foreign aid with a form of service overseas for young Britons, working under the army’s auspices.

The old two-party system is an anachronism, he argues. “Our future lies in a different kind of politics, neither left nor right but radical. We believe there’s a great scope for an online movement that can embrace people from all across the political spectrum. There’s a change in the wind . . . Social media has transformed everything.”

Pie in the sky? Probably, but who knows? Banks is rich, resourceful and determined, and we live in extraordinary times, in which pundits and pollsters are repeatedly proved wrong and populist insurgencies are shaking political establishments across the Western world. Exploiting public discontent has seldom been easier.

Marine Le Pen of the Front National will be fighting for the French presidency next year. The populist right-wing Alternative für Deutschland will contest the federal elections in Germany. Geert Wilders’s Partij voor de Vrijheid (“Party for Freedom”) will be a strong contender in the Dutch general election. “Banks’s intervention should be seen against that backdrop,” Matthew Goodwin told me. “It’s where we are right now. It’s the zeitgeist.”

Martin Fletcher is an NS contributing writer

This article first appeared in the 13 October 2016 issue of the New Statesman, England’s revenge