Jonathan Portes, professor of economics and public policy at King’s College London, says Yes.
Theresa May’s Brexit speech has been well received politically – but the implications for the UK’s financial sector are becoming apparent: banks are announcing the transfer of jobs out of London, the inevitable consequence of the government’s decision to leave the Single Market.
But London – with its history, infrastructure, skills and other advantages – will almost certainly continue to be a global hub for finance, and the largest financial centre in Europe. Only some areas of finance will be directly affected and, as the chancellor has pointed out, fragmentation and financial protectionism will hurt the rest of Europe as well as the UK. We are in damage limitation mode, but this need not mean disaster.
More worrying is the Prime Minister’s view that the political imperative to be seen to “control immigration” is more important than the economic interests of the UK. It is fantasy to think we can build a truly “global Britain” while making it a priority to reduce immigration from both inside and outside the EU, including skilled workers and students.
Nick Hungerford, founder of Nutmeg, says No.
It is likely that the City will sustain some job losses as the Brexit process unfolds. The government should do its best to prevent them – the financial sector is important for the UK economy, and is a major source of tax revenues.
But the City can and will adapt, even if that proves impossible. If we lose bankers, we will gain workers with diverse skills, perhaps those who are better placed to plan and build the future. Most of the “network benefits” of London’s success – from the new technologists who support our great financial services and power London’s innovation, to the renowned legal system that attracts global business and a breadth of talent – will remain and drive growth in other sectors.
A bit more diversity in London would be a good thing. A wider spread of incomes will make housing more affordable. London will retain its creativity, and the City will remain a place for both young and mature businesses to thrive.