Although vocal about his disapproval of the UK’s Labour government, London’s mayor is bullish about the city’s ability to survive the economic slowdown.
Mayor of London Boris Johnson is the most quotable of UK politicians – at times to his detriment, forever treading the fine line between a quip and a clanger. Sitting down for a chat before a press conference at the Majestic Hotel in Cannes midway through the Mipim conference, there were a few quips but, somewhat disappointingly, no clangers. Referred to by most Londoners by only his first name, ‘Boris’ is clearly in business mode.
Asked about his main critiques of the current Labour government’s policy with regard to business attractiveness, he responds with an exasperated laugh: “Where do I start?”
The UK’s tax competitiveness is one place to start; it is an obvious – and justified – worry. “I am always concerned about tax competitiveness and it is absolutely vital that we do not have a confusing tax system that encourages companies to relocate in Zurich or Dublin or anywhere else,” he says. “However, I would say that the return of Peter Mandelson [as business secretary] has been a beneficial thing from that point of view so far, but you always need to keep the pressure up.”
Another bugbear is excessive red tape, which the mayor feels is strangling small businesses: “The single thing that the Labour government has to understand is that London’s businesses are going through extremely tough times at the moment. Small businesses comprise 80% of employment in London. It is absolutely insane to propose, as I have seen Labour ministers do recently, that you should come forward with new regulations not generated by the EU but generated by Whitehall. This is the last thing that business needs and the Labour Party needs to recognise that it has to stop regulating small businesses out of existence.”
Therein lies the difficulty in running one of the world’s major finance centres in a role that allows only so much scope to affect the regulatory environment for business, and at a time when the banks that built so much of London’s prosperity are now public enemies.
Mr Johnson, elected in 2008, stepped into the mayor’s office just as the boom times turned to bust and the City of London’s colossal finance sector began to take a brutal bashing.
But he stresses that London’s fundamentals remain sound and its investment attractions are immovable.
“If you look at the long term, people are always going to need to raise capital to finance their ventures. London is always going to have the best time zone – if you are dialling from Beijing it is easier to contact London in the middle of the day than it is to contact New York. It is always going to have the international language of business; and it is always going to have a highly educated, mobile, literate, multinational workforce that is going to be very well placed to supply those services,” he says.
“Therefore, I think that London will emerge from this, if anything, with its lead strengthened or lengthened. Obviously, there are job losses in the financial services industry and the City will go through a process of restructuring and a re-evaluation of its priorities and the markets it should be concentrating on. However, I am absolutely convinced that London will come through it in very good shape.”