Follow the money
I wrote recently about the dismal performance of the London Stock exchange, and this morning following a story about AstraZeneca on the radio I looked at the membership of the FTSE 100.
Not the most impressive list of corporate giants is a polite way of putting it and the smaller the pond gets the more difficult it will be to keep the few giants left from going elsewhere. Somewhere were the market is bigger, the funds available far larger, the share values higher and the management pay much higher.
It would only take a few big companies like Shell, BAT, Anglo American or even AstraZeneca to up sticks and the London Stock market would be little more than a provincial backwater; the momentum and motives to move would mount.
One great pity is that they will doubtless nearly all go to New York, Europe’s financial capital was and still is the City but when it comes the share dealing it has failed to be the continental champion that was needed.
Does this matter?
Well, what it reminds me of is the regional decline of the UK itself. When shipbuilding collapsed and coal mining withered and heavy industry was allowed to die; we were told it didn’t matter that new industries would spring up. But a lot of regional power went with those industries and the new ones weren’t based in Birkenhead or Barrow. But even worse when former regional giants were taken over by even larger firms, the HQ’s moved to London.
When that happened the regions suffered terribly. It wasn’t just the relatively well paid, high skilled blue collar jobs that went. The local banks closed or were merged, local accountancy firms had to move to London, as did the auditors, the consultants, the lawyers, the managers, the designers and the researchers.
In short the services industries and the middle classes went to the south and never came back, so did the talented and educated children; there was not enough to keep most of them.
London is not at that stage yet, it has many other attractions, but the health and wealth and size of the London stock market is not just about the share dealing.
If it goes so do the banks, accountancy firms, auditors, consultants, the lawyers, the managers, the designers and the researchers.
Ambitious people go where the ambitious companies go and that is no longer London.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media
Nils Pratley in The Guardian is also quite vocal and forceful on this - and well worth reading