Fri, Jan 27, 2017 - Page 9 News List

Post-Brexit London’s fate as cultural and financial center

The UK capital perhaps felt the greatest shock when Britain voted to leave the EU. Will the impending split really be ‘economic self-sabotage’ for London, or will the city’s status as a cultural and business leader remain intact?

By Tom Campbell  /  The Guardian

In such highly regulated industries, it is the terms of Brexit that will be so important, but, while concerns are manifold, few are predicting a meltdown in London’s financial and business sector.

The House of Lords European Committee has identified numerous threats, such as the loss of “passporting rights” or ability to trade in euro-denominated bonds, but is optimistic that London’s European position can be maintained.

Along with the BBA and the City of London, the committee warns that if there are regulatory problems, it will be New York rather than other European cities that have the most to gain.

Brown agrees that London will retain its dominance — even if terms are less favorable: “London has an unrivaled agglomeration of financial and other service firms. Some may relocate, some may choose to expand elsewhere, but many will remain in London. Other cities — like Dublin, Frankfurt, Paris — all have a lot to offer, but none is a perfect rival to London.”

Cultural powerhouse

London’s role as a center for commerce has gone hand-in-hand with its reputation as a cultural powerhouse.

Paul Owens, director of the World Cities Cultural Forum, which provides data on more than 30 cities across six continents, says the reputation is well deserved.

“London’s cultural offer is unique not just for its size but for its diversity and dynamism. It combines renowned museums, art collections and institutions alongside global media and entertainment industries, a substantial base of artists, start-ups and creative entrepreneurs and a thriving night time economy,” he says.

The latest figures confirm the robust health of London’s creative sector, with a workforce of half a million and a turnover of £34 billion (US$43 billion) that is growing at twice the rate of the economy as a whole, but this predates a referendum result that was almost unanimously opposed by the sector: A survey undertaken by the Creative Industries Federation showed that 96 percent of its members backed Remain.

While there is little evidence of how the result has impacted so far, there are anxieties across London’s creative industries, from former Victoria and Albert Museum director Martin Roth citing the referendum as a factor in stepping down, to advertising giant WPP chief executive Martin Sorrell, who has warned of Brexit uncertainties hitting revenues.

For Owens, the implications of Brexit would seem to be at odds with many of the factors that have made London’s creative industries such a success.

“There’s no doubt the decision to leave the EU poses a threat to London’s creative economy. The sector has prospered on diversity, free movement of artistic talent and international supply chains. London’s cultural assets are considerable, but it is likely to be diminished over the next decade unless there is a suitable policy response,” he says.

While some argue that leaving the EU offers the prospect of new trading opportunities, Owens is not convinced this will bring much benefit to London’s creative businesses.

“When it comes to creative industries, the likes of China are still relatively small trading partners,” he says. “The UK’s total exports of creative goods to China were about £200 million in 2012 — just 3 percent of what we export to the rest of Europe.”

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