Whither London?

I feel as if there is a crescendo of doom-mongering about London.

Some of the most expensive footfall in the world

Most notable for me was a piece a week or two ago by Simon Kuper in the FT. Kuper argues that three things threaten to diminish London, risking it following Vienna and Constantinople into decline:

  • Covid-19. Covid means lockdown. And lockdown means working from home. Kuper argues that “though working from home threatens all cities, it disproportionately threatens London”.
  • Brexit. The “UK-EU trade deal does little for London”. In the first week of the Brexit new world, apparently €6bn a day of stock trading moved from the UK into the eurozone, which alone could be worth has much as £20bn a year of lost revenues (a quarter of the UK’s services trade surplus). I hear rumours that Goldman Sachs is yet to move 2000 roles from the UK into the EU. That is a lot of tax that won’t be paid to HMRC, and fancy dinners no longer being enjoyed in the West End.
  • The role of English. Kuper argues that “a decade ago there was no obvious European substitute for London. Now, cities like Berlin, Copenhagen, Amsterdam have become quasi-bilingual business hubs.”

Kuper cites house price data as suggesting that “local rivals are eating into London’s supremacy”: London’s prices have fallen (in international terms) since 2016, whereas Parisian prices are up about 25%. More money is going into Paris’ office space than London’s in 2019, the year before the pandemic.

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Wealth tax would prove taxing for the Tories

A think tank of policy wonks and policy makers, the Wealth Tax Commission (WTC), has recently published its report/proposals into how the UK should implement a wealth tax – to fund the enormous sums HM Government has been spending to try to mitigate the covid-19 pandemic. This report has received a lot of well-deserved media comment. It is well written, fair minded, and full of useful research.

I’m sure most readers of my blog have seen some of the media stories, and you will certainly have views. As somebody who is close to the target’s bulls-eye, here are my views – as they stand in December 2020.

The key proposals are summarised in the table ES.1 below.

Table ES.1: Revenue estimates for one-off taxes, based on current wealth distribution

These data look a bit suspect to me. Apparently by 2030, one in four homes in London will be worth at least £1m; this is about 1m homes, so at the lower end of the table the figures look plausible. But at the top end, these figures look undercooked. The Sunday Times Rich List has 1000 people in it with assets of £120m+, and anecdotally it misses more people than it overestimates, so the idea that there are only 22,000 people with assets of £10m+ does not fit the power curve. My guess is that there are already at least 50k people in the UK worth £10m+. Whether they are all taxpayers or not is, I suppose, a question one should consider – but I am going to treat as off scope for this piece – as the idea that I should have assets confiscated so that other multimillionaires can avoid tax altogether feels absurd.

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July 2020: shambles and zombies

Lockdown continued to dominate the news in the last month.

Poor old Australia seems not to have escaped Covid so lightly after all. Victoria, at the time of writing, is bearing the brunt of it. With a population of just over 6m, i.e. about the same as Scotland, they now have 11k cases, with 116 deaths to date. Their new daily cases figure of almost 400 amounts to, by my calculations, around 60 per million – which would put Victoria in the worst quartile in Europe.

New daily cases in Europe, Tue 28 July. Source: The Times

BoJo would like us to think of these increases as presaging the ‘second wave’. His government is now adjusting the settings almost daily, across several dimensions. One moment, in Oldham a lockdown is applied; the next moment, people across the North West can’t meet others indoors. One moment, masks are now (finally) compulsory in shops; the next moment masks are now required in all indoor public spaces. Meanwhile across the country nobody can now get married, whereas as of yesterday they could.

One government policy, one shop, one day – two ministers.

This leaves everybody having no idea any more.

BBC Radio 4 Today program, as transcribed by FT Alphaville
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