Category Archives: City of London

Should London become a city state?

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The term Ecumenopolis was invented by the Greek city planner Constantinos Doxiadis in 1967. It imagined a future world where urban areas combined to make a single, global state. This was refined to a European version- an amalgamation of London, Paris, Amsterdam and the Ruhr region of Germany into a powerful urban state. The idea of a cosmopolitan collection of global hubs with shared values fighting against its rural neighbours holds more relevance than ever in the aftermath of Britain’s decision to abandon the EU project.

Since the early hours of 24th June, inner city Londoners have reacted angrily, howling in dismay at the parochialism of Britain’s rurality. The decision for the UK to leave the EU, leaving to one side the matter of Article 50 and the problematic nature of its initiation, will no doubt affect the likelihood for global firms to locate headquarters in London and distort the image of the capital as a progressive, incredibly open place to live. But should, as one of the many petitions issued recently suggests, London break away from its peripheral regions and form its own city state?

The economic argument is relatively clear; London contributes more to the UK economy than Scotland, Northern Ireland and Wales combined and would have a GDP exceeding that of Sweden or Switzerland as it its own state. The benefits of such an agreement for London would be the ability to cut off tax revenues currently siphoned off to parts of the UK in more urgent need of investment. Infrastructure would focus on the global rather than the domestic, potentially enhancing London’s status as an international hub. Hong Kong and Singapore function as business-friendly global cities albeit with widely different political and social contexts. There is an argument to say that the UK’s dependence on the financial sector is largely due to London’s comparative success, meaning a clean break would potentially allow the rest of the country to focus more on manufacturing in order to restore some lost identity to northern towns.

The question also remains as to where one would draw the line. ‘London’ is now an ambiguous entity of around 8 million people, spreading out and beyond the M25 with an electorate of varying economic opportunities and political tendencies. It is often forgotten that London has both Britain wealthiest and most deprived local authorities and a move to independence may well lead to these inequalities becoming more apparent. Barking & Dagenham for example voted in favour of Brexit in a 62-38 majority as opposed to Islington which voted 79% in favour of remain.

Perhaps this binary question is after all missing the point altogether. The suggestion for London to become an independent state is not the result of lucid, strategic planning but a rejection of the rest of the country – an emotional reaction similar to that which has caused so much hatred and anger towards leave voters. Perhaps one of the most misleading and simplistic conclusions from the referendum is that of a rich, globally orientated London compared with an impoverished periphery. While elements of this have validity, it also fails to register the disconnection among London voters themselves and the levels of poverty within London which largely goes unnoticed on a national level.

London is already an established international city, inhabited by a young, mobile population and the question of its independence from the rest of the UK was a valid one even before the wheels of the Brexit steamroller began turning. The political freefall which has taken place in Westminster over the past two weeks has compounded the emotional impacts of the decision, resulting in a reaction by global financial markets in accordance with the pre-referendum predictions. Dismissed as scaremongering over the course of the campaign, the moving of financial services jobs from London to Paris, Dublin or Frankfurt are now in uncomfortably plain view.

This will of course please those aiming to ‘stick it’ to the establishment, a result stemming from the post-2008 condition which lingers on across Europe. Not only has the result of the referendum had a psychological effect on those EU citizens currently living and working in the UK but also created the potential for a less documented out-migration of skilled UK workers to Europe and beyond. 

Whether or not this becomes anything more than fiction remains to be seen, but merely the level of discussion on this issue reveals the appetite for change in the capital.

Towers & Tax Havens in The City of London

 

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20 Fenchurch Street

The recent Panama Papers scandal has scratched the surface on the sophisticated processes by which wealth is hidden by the global elite. In his book Treasure Islands, Nicholas Shaxson identifies the City of London as the leading recipient of illicit global finance, a long held tradition of diverting capital through London’s financial mechanisms in order to ‘wash it clean.’ Rather than assign blame upon easily identifiable physical islands such as the British Virgin Islands, Cyprus or the Crown Dependencies, Shaxson reveals that the City of London, using all of its murky colonial clout, remains to this day the primary source of capital inflows from around the world. This status has remained intact, an impermeable entity free from government intervention and also free from the classification as a private enterprise.

The City of London, defined as a 1.22 square mile piece of land with a 350,000-strong workforce yet only 7,000 residents, accounts for 46% of the world’s foreign exchange, 45% of over-the-counter derivatives trading and 70% of Eurobond turnover with more foreign banks than any city in the world. The reason financial services companies choose London is, according to Shaxson, because it ‘allows them to do what they cannot at home.’ Ever since the 1980s, London’s attraction as a safe haven has allowed overseas investors from all over the world to redistribute wealth and accumulate assets, often in the property market. A staggering £170 billion worth of UK property is now held overseas, including 75,000 properties owned by companies or individuals located in offshore tax havens as this terrifying map published by Private Eye demonstrates.

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Front elevation of Mansion House

There is, across many levels, the general association with high-rise construction and a booming economy. Cranes are identifiable symbols of progress which can be used to demonstrate a healthy dose of investment in a given place. There is, of course, plenty of truth in this – the demolition, planning and construction process all generate economic activity, one of the reasons why sensitive re-use of buildings, even when more appropriate, might be bypassed. However, the sporadic sprouting of towers across the City of London reflects more on the very recent change in attitude towards tall buildings as a matter of policy than it does the City flexing its financial muscles. The Mayor and certain local authorities such as Lambeth, Southwark and Tower Hamlets are now pursuing a more lenient stance towards high-rise towers, particularly as those on the southern bank of the Thames tend to fall outside London’s treasured protected views.

The reality is that the sophisticated mechanisms for global finance to function have long since taken place without the physical need for office space or face to face human interaction and is as such increasingly invisible. The effects of London’s stubborn attitude to remaining ‘open’ to global investment whatever the implications are not simply the risk of taller buildings but the total liberalisation of vast swathes of London property, inevitably making it more problematic to coherently plan, develop or for younger people to access. If anything, whether it be the Walkie Talkie or the Cheesegrater, the emphasis of building high is more in line with the City of London Corporation’s outward-facing motto of being ‘committed to maintaining and enhancing the status of the City as the world’s leading international financial and business centre’ than it is as a direct response to a demand for office space.

Whereas in the past there was the vague notion of a corporate body being local to a particular city or place, the ties between global banks and an identifiable place are now far more blurred. The architectural offerings of the City of London are packed tightly around a series of narrow streets and medieval interlocking passageways. Relics of the Big Bang years of the mid-1980s can be found in smoked glass office blocks, with occasional Postmodernist indulgences such as Stirling’s One Poultry. However recent revelations show that the complexity of modern financial tools to generate profit does not necessitate the construction of towers, it has much more significant, far reaching implications which affect the affordability of property across a much wider scale than the claustrophobic confines of the City of London.