“Ridiculous and tiresome” Nick Clegg blasted for "stifling London"
Londoners up in arms after Clegg’s speech
Nick Clegg’s decision to take to the airwaves in his own LBC radio phone-in has made for required listening, with guaranteed headlines for journalists each week as Londoners tackle the Deputy Prime Minister over the big issues.
The move brought up comparisons among PR experts to a “masochism strategy”: Soak up the punishment in the hope the people will like you again.
The Deputy Prime Minister’s latest speech appears to have just dragged out the pain, as the LibDem leader told business leaders assembled for his speech at Mansion House that the UK was guilty of an over-reliance on the City of London.
The UK economy had been “emasculated” by the dominance of London, Clegg warned, with previous governments failing to sort this out as they had been “bewitched” by the City.
Clegg complained that a “nation of 100,000 square miles” was propped up “on the profits of just a single square mile”. “We need to rebalance our economy away from its over-reliance on London and the South East,” he added.
The LibDem leader dangled an economic prize too. If regional balance was restored, he claimed that the UK economy would achieve its full “potential” and be £41bn better off.
What do businesses think of this? Given Clegg’s direct intervention on London’s place in the economy, LondonlovesBusiness.com has been deluged with comments.
LBC radio host James Max lambasted the Deputy Prime Minister for seeming “oblivious to the importance of London and its ability to help the UK out of the economic quagmire”.
“The British taxpayer didn’t invest billions into the London Olympics to subsequently downgrade our capital’s status. And you certainly don’t dumb down in favour of other cities in the UK for political gain,” he said.
“London is a global city. It has an important part to play in the globalised economy. You enhance other areas of the country by improving infrastructure and encouraging new business to grow. Scorched earth never worked.
“Mr Clegg continues to advocate a take from Peter to pay Paul mentality, in his unfathomable desire to have a “fair” world where everything is equal. Get real, Mr Clegg Paul will only get paid if Peter has something to pay him with. Grow London and encourage growth elsewhere. Do not stifle London in the hope other places may blossom!”
Pimlico Plumbers boss Charlie Mullins derides Clegg’s speech as a “bizarre and illogical attack on London”.
“Everybody knows I am no fan of the pin-striped crooks who call themselves bankers, but to accuse the jewel in the UK’s financial crown of having an ‘emasculating’ influence on the whole UK economy is without doubt the most ridiculous and insulting thing I’ve heard for ages!
“If I was running my business somewhere else in the country I would be very angry with Mr Clegg for daring to make excuses on my behalf.
“As Britons we don’t blame Germany, or China or the US when things go wrong and I don’t think that people in Manchester, Birmingham or Glasgow are so insecure that they see London as their nemesis.”
Mullins’ comments are backed by Tass Mavrogordato, CEO of central-London business group inmidtown, who says: “London is a natural place for business to thrive due to its size, diversity and status internationally, but it is not in competition with other commercial centres in the UK.”
Clegg’s words didn’t go down well with VC posterboy and Better Capital chief Jon Moulton, who branded him “just wrong” over his comments on London’s position in the British economy.
“The City has not sought to weaken the regions. The concentration into London and the South East is largely a function of the economics of having high value intellectually based businesses in one area and the continuing UK loss of global market share in lower value added activities which destroys industry in the regions,” he added.
London First Chief Executive Baroness Jo Valentine strikes a tone of caution in response to Clegg’s speech, warning him against “stamping on the City”.
“We want to see growth in all parts of the UK , but you don’t encourage growth in the regions by stamping on the city whose success is subsidising them. London actually helps attract financial sector jobs and investment into the UK. The UK is not Germany, the USA or India – we need to recognise that and get behind those sectors that give us strength rather than trying to bring everything down to the level of the weakest link.”
London businesses shouldn’t be needlessly hit, warns Sue Terpilowski, London policy chairman at the Federation of Small Businesses.
“With 20% of UK GDP emanating from London it is vitally important that the Treasury does not bite the hand that feeds it. London is, and should remain a global powerhouse. Decisions must be taken to help all parts of the UK, not discounting London.”
The need to protect, not bash, London’s status in the UK’s economy is underlined by Paul Deeming, CFO at the Hakkassan Restaurant Network, which has restaurants in the UK, USA, Middle East and India.
“London attracts huge amounts of external investment; such investors are attracted by London’s preeminent position as a financial powerhouse and if this were watered down then it is likely that the investment would disappear and not be relocated to the regions”
The LibDem leader may be pleased to hear that some entrepreneurs agree with him, like Arnab Dutt, MD of leading wheel manufacturer Texane.
Dutt tells LondonlovesBusiness.com that Clegg’s message isn’t an attack on London but a wider problem of business strategy.
“I don’t see an attack on London in this speech but attack on a failure to implement a long term business strategy for the whole of the UK by successive governments over the last 30 years. In the speech he wants the regions to be self-supporting and not dependant on London – that has got to be good for London and London’s businesses.”
Clegg is on the money according to Simon Dixon, CEO of crowd-funding platform BankToTheFuture.com, who warns that “London alone cannot turnaround the economy”. Meanwhile, Steve Ruffley, a trading education consultant at spreadbetting platform Intertrader, agrees with Clegg but calls on him to start taking action.
“The fact of the matter is that to some extent he is right. The fate of the UK heavily relies on the success of London…if Nick Clegg wants this to change then he has the power, unlike most, to really put some force behind this.”
Sadly that is where the support for Clegg dries up. In a hard shot of reality, experts pour cold water on suggestions that Clegg could actually correct the “over-reliance”, like Cass Business School Professor of Organisational Behaviour André Spicer says:
“Clegg’s comments about rebalancing the economy away from London might sound nice. However, it will be difficult to achieve.
“The main reason for the difference between North and South is the fact London is a global city. London is like an aircraft carrier off the coast of Europe. The people who live and work in the city often fly in and out of the City. They pay little attention to the rest of the country around them. The people working and living in the city have more in common with their counter-parts in New York, Paris and Berlin than people living in Hull, Liverpool or Leicester.”
Others have little time for explaining the difficulties of Clegg’s hope to rebalance the economy away from London and instead rubbish Clegg’s message.
Anthony Sharot, founder of Market Appeal, wants Clegg to focus on reducing taxes and bureaucracy. “Saying that the City has emasculated the rest of the country is plain silly and it’s amazing that Clegg doesn’t know better after so long in government.”
These sentiments are shared by Sarah Lafferty, director of Round Earth Consulting, who laments Clegg’s “pot shots at the City and the previous government are tiresome and too simplistic”.
Jerry Brand, MD at Caternet, is rather exasperated by Clegg’s comments on the City, dismissing them as a “typical sound-bite from a seemingly flat politician who doesn’t really understand the root of the problem, or what to do about it”.
Is Clegg’s attack on the City of London even accurate? ACCA senior economic analyst Emmanouil Schizas doesn’t think so.
“I’m not sure London, and the City of London in particular, are even part of the same economy as the regions in the manner that Nick Clegg claims they are. It’s not very sound to keep saying, as some do, that the UK should treat the City like a goose that lays golden eggs; a more apt analogy would be to treat it as a unique natural resource – like oil, gas or diamonds.”
Last but not least, Gekko MD Daniel Todaro tells LondonlovesBusiness.com that Clegg’s speech on London was nothing but a “weak PR exercise”.
“London hasn’t emasculated the economy, this government has. In his ‘No Stone Unturned’ report last October, Michael Heseltine condemned the coalition, not London leaders, for lacking a strategy for growth and wealth creation, calling for bolder action by devolving power from Whitehall to reinvigorate the key English regions Clegg mentions.
“With a response to that report due next month, why doesn’t the government focus on how it will implement Heseltine’s recommendations, rather than wasting time trying to convince the nation it is all Labour’s fault?”
All the reaction from London firms shows that Clegg succeeded in striking a nerve with his London speech.
As for the criticism? Clegg can be sure that his masochism strategy is still working.