Realist, not conformist analysis of the latest financial, business and political news

Betting on London

From our Swindon correspondent:

Another example of the religious cult of London:-

“Seething, international, colourful.” “The epitome of modernity.” The source of an “inner freedom that I’ve kept to this day”. Even without context, Ursula von der Leyen’s odes to London, where the European Commission president studied for a year, have always been handsome. And then you clock that she is describing the city in 1978, before the reversal of its postwar depopulation, before the Big Bang, before, even, Dishoom. She should have been there in 2006, I want to say, but she would still be honing the adjectives.
Well, she probably had a point in 1978. In an era when most provincial wine shops were still selling Blue Nun OR Black Tower. When you had to wait weeks before Star Wars came to the ABC in Northampton. When a cappuccino was exotic. Compared to a provincial town in Lower Saxony, it would have been exciting. Even in the mid-90s, I felt a pang of envy when walking into Foyles, cheesemongers or various specialist hip-hop shops around Soho.
But I can get all this on the net at a click now. OK, I’m missing out on Dishoom, but I’m not quadrupling my mortgage for Indian food.
Even a bad London is a miracle, then. It is one reason to bet on the hometown I have not seen for 16 months as it steps gingerly into life after the pandemic. But there are others.

Last month, Boston Consulting Group and The Network, a group of online recruiters, surveyed over 200,000 people across 190 countries. They found what they found in 2014 and again in 2018. London is named above all cities in the world as a destination to move to and work in. The propensity to move at all is down, which should harm all global cities in absolute terms. But if London’s relative lure is holding, it will take immigration laws of special obstinacy to diminish its world status.

This survey could simply be about how big London is in the UK, where Germans might be splitting their choices. But there’s an important phrase in there: the propensity to move at all is down. Someone in Manchester, Birmingham, Tipton or Newton Abbot is figuring they can do their job from where they are.

As for domestic talent, despite the efforts of every government in my lifetime, London will remain El Dorado. For two reasons, the eternal quest to “rebalance” the UK should always provoke a wince. One is the prefix “re-”. It implies a recent and therefore recoverable parity between cities. The truth is that London’s monstrously superior scale holds across time; only the runners-up change.

But, to some extent, the balance has shifted. London was a more expensive place for property in the mid-90s, but it was maybe double what the prices were in the regions, not treble. It certainly could shift back towards that, and based on current house prices, already is.

The other error, flowing from the first, is the politician’s conceit: the overestimation of policy against the ingrained past. London dominates because England has been whole for longer than the more balanced nations with which it is invidiously compared. Neither Germany nor Italy unified until the late 1800s. Hamburg, Florence, Munich and Turin had centuries to grow as ducal capitals or sovereign states. France is much more England-like in its ancient integrity. Oh look, Île-de-France accounts for 30 per cent of national output.
That’s not why London has become a successful city. It’s about the Victorian rail and underground network. Paris has the same thing. New York and Chicago too (but later). As the service economy grew, rapid transport to get lots of people into offices also grew. You wanted to put your office somewhere that you could get a choice of people to come and work in. This then created a network effect in places like Reading and Bristol – people move near there because that’s where the software work is, which leads to software companies moving there to get the people.
These are not disparities that will answer to ministers of the crown or other ephemera. They will not answer to the vaunted end of the office, unless you believe there are no offices in Leeds and Manchester. A Zoom-enabled dispersal of workers does not per se mean a smaller gap between elite cities and the second tier.
There are lots of offices in Leeds and Manchester, and a large part of their success over many Northern cities is the same thing as London, that they are major northern rail hubs serving many directions. That created gravity towards them.
And a ” Zoom-enabled dispersal of workers ” isn’t just about city vs city, it’s about city vs everywhere. People don’t want to commute more than 45 minutes to the office every day, but once a week? Who cares. Make it 75 minutes. At which point, lots of places get a large radius of talent they can reach. Banbury, Didcot, Stoke-on-Trent. Why pay the premium for the big cities when you can have a central office for everyone that’s much cheaper, and where they can live in cheaper places?
4 1 vote
Article Rating
Notify of
Newest Most Voted
Inline Feedbacks
View all comments
John B
John B
6 months ago

I moved to London in 1973 and left in 1999. It just became too crowded; too busy. It was a different place in 1973 to what it became by 1999.

For me it stopped being that exciting, lively, hive of activity and abundance of amenities and opportunity, and became overpowering, stifling, claustrophobic, unpleasant.

6 months ago
Reply to  John B

Sorry to have to break it to you – what really happened was you got old. You know what Samuel Johnson said about being tired of London.

Bloke on M4
Bloke on M4
6 months ago
Reply to  Charles

It’s not just that, though. There are less live venues, people seem to have less fun. So much of it has been taken over by people who are office workers going into the city.

6 months ago
Reply to  Bloke on M4

You move to London because it is new and different. You stay long enough and stop liking it because it is now different to how it was when you arrived. That’s because it is still new and different for everyone, but you want it to stay the same.

6 months ago

Both my sons moved to London and I am happy to say, they moved out again.
The crowding and cost got to them. My view? What is the point of earning Megabucks if you need to spend megabucks to live.

Would love your thoughts, please comment.x