London is thriving and its success will boost Britain, says Dr Gerard Lyons, as New York Times slams OUR capital
Manhattan's anti-Brexit claims against London show a lack of understanding over the city's ability to adapt and change
THE New York Times thinks London has peaked and Brexit is bad for the UK. They are wrong on both counts.
London’s ability to adapt and change has been a remarkable feature of its success. This has helped make it a global powerhouse.
It is the biggest city in Western Europe, with the highest number of skilled jobs of any city in the world.
Its diverse vibrant economy includes the City, law and consultancy. Paris or Frankfurt can’t easily steal this business from us as it is hard to replicate the infrastructure, skills, knowledge and experience found here.
Indeed, there is a growing acceptance that London will remain Europe’s financial centre even after Brexit.
Equally exciting are the economic clusters that look set to prosper, such as life sciences and FinTech.
The world economy is going through a new industrial revolution because of technology, the digital world, big data, robotics and medical progress.
The EU — set in its ways — is not well placed to reap the rewards. London and the UK are.
In a knowledge-based world of the future, innovation matters. We have some of the best universities and medical schools in the world.
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Then there is tourism and the creative and arts sector, where London is a global leader.
With these facts in mind, the New York Times’ bizarre front page feature, asking “Will London Fall?”, starts to look a lot like sour grapes.
Manhattanites have long believed their city is the global capital but New York simply cannot compete with London on the global stage.
While London is fizzing with innovation and entrepreneurism, in New York baffling bureaucracy and red tape mean any new idea or business struggles to get off the ground.
A woefully inadequate infrastructure compounds its problems.
But rather than looking at the problems closer to home, the New York Times has lashed out at London, suggesting that Brexit could destroy it.
Pessimism rests on two issues. One is that our economy will suffer with Brexit. It won’t.
The other is that overnight we will become inward-looking and less tolerant. We won’t.
The way to address such concerns is to say “watch what we do” and listen to what the Prime Minister says. Her message is clear: Global Britain, with the UK a good place to do business in as well as to do it from.
Our domestic market is sizeable and our international potential huge.
Brexit’s success depends not just on our EU deal but on our global approach and domestic agenda.
The Referendum result showed more people need to share in success.
There is the need to allow London to prosper and for other parts of the country to close the gap.
Just look at the skyline to see evidence of London’s success. There are cranes everywhere — the sign of a city that is constantly building, adapting and prospering.
But we shouldn’t keep building upwards — we need to go east as well, helped by increased spending on transport. Crossrail is the biggest construction project in Europe.
The focus on a regional and industrial policy makes sense. We need to rebuild our skills and technical base, get firms to train staff and attract investment to areas such as the Midlands Engine or Northern Powerhouse. But it does take time.
In 2014, I produced a detailed report for Boris Johnson when he was London Mayor. It showed that over 20 years London would generate one million new jobs outside the EU — five times more than if we had Remained.
Then there is the criticism Britain is about to suddenly reverse its policy of tolerance and multiculturalism. It won’t.
Of course there are challenges when you leave something after 44 years.
Uncertainty over the rights of EU citizens allows many of these pessimistic forecasts to be made. So the sooner this is clarified the better.
But let’s be clear: Outside the EU, we can adopt a migration policy that reflects the needs of our economy. We can let in the workers we need. And many will still work in London. Low migration does not mean no migration.
The cities — and the countries — that prosper in the future will be those that play to their strengths as well as embrace change.
London’s diversity is one of its great strengths. And we need to retain this after Brexit.
I grew up in Kilburn, the son of Irish immigrants. The foreign-born population of London has risen from 1.1million (15 per cent of the population) in 1971 to 3.2million (38 per cent of the population) now.
This incredible labour force, with its varied skills and languages, fuels London’s super-powered, global-reaching economy.
The London Vibe and its magnetic pull are not going to be diminished by Brexit. London is a unique city with its multiculturalism and diversity. Global Britain is not the same as Little England.
London’s biggest challenge is not to do with Brexit. It is the cost of living, whether it be to rent or buy. That is why we need to build more housing.
London is a city of many contrasts. It has considerable wealth but much poverty. Many multinational firms use London as their ideal base but many small firms find it a challenge because of rates, tax and regulation to compete. Outside the EU we will be better able to cut taxes and regulations for them.
Also, let’s not forget many of those who continue to want Brexit to fail were predicting immediate economic collapse and financial Armageddon after the Referendum.
In fact, since last June, the UK has seen a long list of global firms committing to more investment here.
Admittedly, we may face a trickier time for the next year or two as the economy is due a slowdown and the negotiation with the EU may trigger uncertainty.
But beyond that, there is every reason to expect Brexit to be an economic success.
London was successful long before the EU came into existence and it will do well long after we have left.
- Dr Lyons is Chief Economic Strategist at Netwealth Investments.