By Edward Clarke, Research Manager in the Economic Development Office
Following the vote to leave the EU a year ago, observers have been concerned as to how this will impact on London’s role as the financial services centre for Europe and, by most measures, the world. So what can the announcements from City based firms regarding moving staff out of the city tell us?
The first observation is that whilst fewer firms have so far confirmed moves out of the city than some initially feared, with current figures suggesting fewer than 200 jobs publically confirmed to move, there remains enormous potential for many more to move. The Financial Times and Reuters both estimate that around 10,000 moves are already planned. Estimates for potential future moves go as high as 35,000 (Source: Oliver Wyman).
Secondly, all of the confirmed movements and most suggested moves are to three cities within Europe: Paris, Dublin and Frankfurt. Using the Centre for Cities data tool, I looked at how these cities compare on issues such as the size of population, skilled people to hire from, density of businesses and productivity – some of the key economic indicators.
Firstly, London is the largest of the four cities; it has the largest population  and the largest number of jobs – about the same as the other three combined.
Secondly, Business services (including FS) make up a high proportion of the total jobs across all four cities, but whilst Frankfurt is the most concentrated (43%), the share of business services in London’s economy is higher than in Paris or Dublin – meaning there are around two million jobs in Business services across the Capital compared with 1.3m in Paris. While Frankfurt has a higher share there are 7 times more of these jobs in London due to its size.
Thirdly, all three cities have a high proportion of highly skilled residents and workers. Businesses choosing London have access to the largest pool of talent from which to hire due to its larger size.
So what does this mean for London?
It is clear that firms and especially financial or professional service firms choose London - and particularly the City- in large part to be close to competitors and the access to talent that it provides. London does well at attracting people to the Capital in part because of the jobs on offer and the chances for career progression – the so called jobs escalator.
Alongside the draw for businesses, there is the draw for individuals. A range of competitiveness studies highlight the draw of London’s lifestyle, culture and entertainment offer, highlighting the breadth of advantages a place needs in order to attract businesses and individuals from around the world. This was reinforced in a set of interviews with relocation specialists conducted by the New York Times about the factors financial services businesses would be looking for  – in essence, English language – seen to be essential for attracting a global work force, a favorable regulatory environment, especially around employment, excellent transportation and communications infrastructure, availability of prime office space and housing, good schools, restaurants and cultural offerings - and an energy level and openness.
With Brexit negotiations coming up, London’s openness – and attractiveness - to businesses and talent from around the world will therefore remain a cornerstone of its global competitiveness.
 These use comparable geographies of the built up areas of cities (rather than administrative boundaries, so London in this case is larger than the GLA boundaries), details can be found at the original source: https://www.centreforcities.org/welcome-european-cities-outlook/
 2015, NESTA https://www.nesta.org.uk/sites/default/files/citie_report_2015.pdf; PWC, 2016 https://www.pwc.co.uk/industries/government-public-sector/insights/cities-of-opportunity-7.html Mori Foundation 2016, https://mori-m-foundation.or.jp/english/ius2/gpci2/index.shtml