In uncertain times for businesses, Brexit, and other seismic political events, the City will retain its position as the world’s leading financial centre.
That was according to its chairman of the policy and resources committee Mark Boleat at an NLA conference on ‘strengthening resilience’ in the Square Mile yesterday. But to get there it must grow, adapt and get assurances about the kind of Brexit we want, retain access to the single market, allow talent to come in and have a reasonable transition period put in place.
Boleat was speaking just hours after the shock news about the election of US president Donald Trump (‘great news from abroad, Root is nearly on 100’), but how the City copes with the likely effects of Brexit has caused similar uncertainty about the future. Boleat said that anecdotally, firms here have been deferring decisions about starting projects and on locations, and that there is much work being done by City businesses on assessing options and the implications, in a ‘straight, business’ way rather than as an emotional knee-jerk. New York will be the biggest beneficiary of any loss of business over 5-10 years, but London has ‘incredible strengths’, and although the notion of companies ‘upping sticks and leaving was never going to happen’, it was important to be realistic. ‘If we pretend it is not happening we will not be doing ourselves any service at all’ said Boleat. ‘We will remain the largest international financial centre. What is at issue is whether we lose business that we would rather not lose’. Businesses such as those in accountancy, for example, would struggle if they need, say, Polish workers to help on language issues for Polish clients on a short term basis but cannot get access to talent. Differential visa requirements may be one solution, when different parts of the UK have differing needs to access such talent from abroad. The importance of access to the single market was also critical for many businesses, and a transition arrangement for Brexit must be announced next year for businesses to lessen risk. ‘Brexit can be bad, good, very bad; that depends on what we do from now on’, said Boleat. ‘It is absolutely vital for the City and your industry that we get this right but there is an awful lot of work to do.’
Eric Parry agreed that talent is what is so important to London; both keeping it and growing it. And ‘the quality of the environment in which people work and live and are entertained is extremely critical to the City of London’, he said. To that end Parry hopes his Undershaft building will be a major contributor in providing important public realm, or at 10 Fenchurch Avenue, where public access is also emphasized.
London is a vibrant economy largely built around people and their skills, said Knight Frank chief economist James Roberts. But for the City, tech, media and telecoms has overtaken finance for office demand now for five years in a row. Where it had been a lot of start-up businesses it is now more companies coming in from Silicon Valley and increasingly New York, and the phenomenon of the collaborative office has become a major trend. But even before Brexit, London had been seeing departures from the financial market, notably with jobs moving out of London to Birmingham, Warsaw and Lisbon, driven by cost and savings made in moving back offices. Law firms now are adopting something of a ‘Mexican wave’ strategy, with partners in London meeting clients and winning business, farming out the donkey-work, and taking the credit when it returns. But this represents a kind of ‘Darwinism’ in the London economy, said Roberts, with the highest earning offices in the capital able to justify their high rents and fit-outs. ‘In many ways the departures do play a role in keeping the London economy efficient and lean’, said Roberts. The final trend is that occupiers once stayed in the same postcode when they were looking to relocate, but now view London simply as London, focused on people and where they want to be. ‘It really is now as different as different can be’.
The conference also heard from speakers including LCCI chief executive Colin Stanbridge, who said that their latest research showed ‘rather steep declines’ for London in all bar one indicator, something he put down to continued uncertainty. And that may remain, said Tina Paillet, Head of Projects and Technology at Generali Real Estate, following the US election, with trade agreements being something more and more countries will have to enter into.
Museum of London director Sharon Ament showed how the creation of a ‘robust ecosystem’ and culture could help support the City’s adaptation and reinforce its status as a great place to live, which will be enhanced by the new gallery in West Smithfield. And City of London Corporation director of the built environment Carolyn Dwyer talked the audience through how the City aims to cope with the projected rise in workers coming into the Square Mile from 400,000 daily to 500,000 by 2030. This will partially come through 1.25msqft of extra offices being developed to add to the 8.75msqft already, and a further 0.4msqft approved, but will be eased by more pedestrian modeling and lessening traffic impacts. Finally, the City’s chief planning office and development director Annie Hampson said the eastern cluster was where the Corporation anticipates the greatest concentration of development, but that it was cognizant of the amount of construction. ‘It’s very important that the City is seen as a part of London and isn’t an exclusive place just for those who work in the City’, she said.
David Taylor, Editor, New London Quarterly