SHEESH, HAVE YOU been reading the papers recently? If you’ve travelled into the City by train over the past few weeks, you will recognise the glassy stares of bankers reading the FT.
Only 23 IPOs took place on the LSE in 2023, half the number that took place in 2022 and the second lowest number for 30 years. Only 1995 was worse. There is an eerie feeling of stagnation here.
But, rest assured, we have been here before. Many people, especially younger professionals, think the City has been in constant ascendancy since day dot, but the story is much more complicated. Between 1939 and 1981, the population of London fell from 8.6 million to 6.8 million. The magnetic draw of the capital went into reverse, and the City itself went through decades of borderline irrelevance.
There are many complicated reasons for this collapse, but economic malaise in the City is foremost among them. During the 1970s and early 1980s, the City was regarded as an old boys’ club with little appetite for change.
That changed on 27 October 1989, with the so-called ‘Big Bang’. On a single day, the cobwebs of the City were blown away with a swathe of pro-market reforms, including the abolition of fixed commission charges and transition from open outcry to electronic trading.
The usual narrative is that responsibility for this explosive shift lies solely on the shoulders of then-Prime Minister Margaret Thatcher and Chancellor Nigel Lawson. But while it’s certainly true that the Thatcher government created a free-market environment and engendered a sense of economic optimism, I strongly believe that London’s resurgence ultimately lies at the hands of the average City worker.
Many people, especially younger professionals, think the City has been in constant ascendancy since day dot, but the story is much more complicated
There are countless heroes in the archives who deserve greater recognition. Whether it’s Sir Nicholas Goodison, whose calming hand oversaw changes as Chairman of the London Stock Exchange, or Sir Richard Lambert, then-editor of the FT, who banged the drum for British business.
But I would also go down a layer. I believe much of London’s success over the last four decades owes itself to the dedicated teams who persuaded international big companies to list in London, including the mega-IPOs of Glencore and Orange.
These people were champions for London. And this is what makes the current malaise so infuriating. If you walk into a pub after market close, you cannot help but spot bankers, lawyers, accountants, and other advisors looking listlessly into their beers.
This pessimism is self-fulfilling, and today’s City professionals need to accept their share of the blame for creating a climate of cynicism. If the 1980s government wasn’t solely responsible for the rebirth of London at the time, then today’s government cannot be solely responsible for its gradual decline either.
Now, please, don’t get me wrong. When you see New York, Dubai, and even Paris doing better than London, it’s easy to get infected with wistful hopelessness. It is difficult to put your head above the parapet and courageously make the case for London if everyone else is swimming in a different direction. But that’s just what we need: a new generation of champions for London.
What does that mean in practice? We need lawyers who are willing to proactively tell more of their clients to consider London. We need brokers, investment bankers, and corporate finance advisors who are willing to lightly challenge their client’s instinctive inclination towards the US. And, ultimately, we need entrepreneurs with the guts to try to turn the tide and advocate for London.
There are nascent signs that a new generation of champions is waiting in the wings. Probably the best example of this trend in action is entrepreneur Matt Moulding, founder of THG, the global e-commerce technology group and brand owner.
He has funnelled his very vocal frustration with the City into positive action: acquiring and investing heavily in City AM to change market sentiment and reverse the tide. This is a bold and commendable step.
Kudos to Moulding. Hopefully others will follow in his footsteps. London has reinvented itself before. It can do so again.