In 2013, the Archbishop of Canterbury Justin Welby warned of a future in which global banks dominated an ever wealthier City of London with ever-spiralling property prices, served by a “disenfranchised population” commuting in daily from elsewhere. Then came the pandemic. Today, the City is a near-ghost town, its bankers and lawyers working from home offices and attics. To entice them back eventually — at least some of the time — the Square Mile has conjured a vision of a vibrant, diverse future where software designers and artists stroll beside derivatives traders on traffic-free streets. Achieving anything like it will require many stakeholders to work together. But it will strengthen the City’s defences, too, against its other big challenge: Brexit.
How much of its pre-eminence in financial services the City can preserve will depend in part on government trade negotiations with the EU. But the City of London Corporation, which has drawn up its vision for London in 2025 with consultants, is right to highlight the need to create the right environment — regulatory and physical — to hold on to existing businesses and people, and to attract new ones.
There may be scope to harmonise fragmented regulation across the City to streamline requirements and create a “competitive and innovative” business climate. It should not mean excessively light-touch regulation that undermines London’s reputation for good governance. Ideas such as allowing some form of dual class shares to encourage tech start-ups to list in London rather than fleeing elsewhere will need cautious consideration. But creative thinking is certainly needed.
Reinventing the physical environment is complicated since no one knows what the post-Covid world will look like. Talk of the death of the office is surely premature. News this week that the 36-storey Scalpel building is being marketed to potential buyers for about £820m will test investor faith in the property market, but suggests no one is panicking just yet. Continued high rents will make it tricky to entice the creative communities, artisan businesses and tech start-ups that colonised low-rent areas such as Hoxton and Shoreditch on the City fringes, made them hip, and spearheaded their regeneration. There may be a role here for charitable handouts from the wealthy City livery companies.
Yet the future for many professional services workers is likely to be a mixture of working from home with a few days in the office each week. Such flexible working will allow many companies to shrink their office space — potentially reducing pressure on rents and freeing up space for other uses.
Indeed, persuading workers to commute into town at all when many have shown they can do their jobs from home will require making both office and street spaces more attractive places to spend time. That means providing more amenities, from crèches to cycle routes. It also means letting as far as possible to a broader range of tenants, including start-up hubs, small businesses and cultural spaces. Planning rules should ensure all new buildings are designed with flexible use in mind. The goal of a fifth of office tenants being new to the City by 2025 is bold, but worthwhile.
That will require other changes, too. Season travel tickets need to be redesigned for flexible working. Repurposing vacant space for housing would create a larger community to ensure the City stays alive outside office hours. The better the quality of life it can offer, the better placed it will be both to recover from coronavirus, and to ensure workers are clamouring not to be relocated to Paris or Frankfurt, but to stay in the Square Mile.
Letter in response to this editorial comment:
Free movement in the City would restore vibrancy / From Michael J Wade, London SW1, UK