London was the only English region to vote Remain, meaning Brexit is in some ways an anti-London revolution. Photo / Bloomberg
London was the only English region to vote Remain, meaning Brexit is in some ways an anti-London revolution. Photo / Bloomberg
COMMENT:
Was Boris Johnson a successful London mayor? It depends on who you ask and the data you look at. However debatable his record, Johnson is running to be Conservative party leader — and the next British prime minister — on an embellished story of soaring mayoral success.
What canbe said with absolute certainty is that Johnson was a better mayor than foreign secretary. In the latter post, he revelled in insouciance and made quite a few policy blunders. The idea that there is a better version of Johnson than the one who inhabited the Foreign Office allows an escape route for supporters and sceptics alike.
Once Brexit is out of the way, goes the wishful thinking, he will return to being an internationalist who listens to competent aides. He will put on his entertaining act and go out into the world to sell the UK as vigorously as he sold London.
Maybe so. But who can escape the irony that London, a thriving global hub, is the place he endangers most with the hard Brexit he champions? If Johnson has his way, the man who elevated London's profile will watch its influence threatened as other financial centres — from Paris, Frankfurt and Amsterdam to New York and Hong Kong — jockey for a piece of its business. The race is already on.
Remember that London was the only English region to vote Remain. And nearly 40 per cent of immigrants who move to the UK settle there. In some ways, Brexit was the anti-London revolution.
The likelihood of a hard Brexit has risen to scary heights since Johnson became the frontrunner in the Tory race. According to the Centre for Cities, a think-tank, 41 per cent of all London exports — which are mostly services — go to the EU. Paul Swinney, director of policy and research at the centre, says the cities that rely most on services face the harshest impact from an abrupt divorce from the EU.
Boris Johnson is running to be the next British prime minister. Photo / AP
The fantasy of a booming post-Brexit global Britain is appealing, particularly to those who point out that the impact of the 2016 vote to Leave has been far less dramatic than pundits had predicted.
Financial Times research in April found that the biggest international banks had moved fewer than 1,500 jobs from the UK to the continent.
But let's not pretend there is no deeper impact: the Brexit uncertainty has taken a toll on investment and raised the costs of contingency planning. Many City employers, moreover, are simply waiting for Brexit day before implementing more radical transfers of jobs and assets.
The real Brexit shock hasn't happened yet. If it occurs along the lines envisaged by Johnson, who wants out of the EU byOctober 31, with or without a deal, London's financial services sector will lose the "passporting" rights that allow institutions to operate in the EU.
The most likely alternative is the so-called "equivalence", which offers access to European markets if regulations are aligned. So it will work out after all? Not quite: equivalence is an unstable outcome; it can be withdrawn as easily as it is granted.
While speaking at the London chamber of commerce and industry last week, I was reminded that we should still look on the bright side, even when we recognise fantasy when we hear it.
There is still a bright future for London. Swinney tells me that the very cities that will be most badly hit by a hard Brexit in the short term have a better chance of recovering over time. London will adapt, and its assets will endure: it will still attract skilled workers and maintain its network of prestigious businesses and universities.
"It might not be as favourable to do business in London in a post-Brexit world, but fundamentally what London offers will remain attractive," he says. "The challenge will be for places elsewhere in the country that won't be so hard hit in the short term but don't offer the benefits of London; for them, access to the single market and to cheaper workers is key."
If we keep looking on the bright side, we can expect that in a post-Brexit future, long after Johnson has realised his political ambitions, every part of the country will lose something but London will still be envied by most.
