London was never going to be a post-Brexit loser

To those of you who moved abroad because of Brexit, are you any happier?

That was the question put to Reddit users just before the Covid crisis. The responses naturally varied but the answers touched on why job losses post-Brexit haven’t been as bad as once feared.

“I came back because it turns out Paris is an even bigger sh--heap,” said one Reddit user who had moved to France and then back again.

“The American Dream seduced me. However, looking back, moving to the US specifically was one of the worst life decisions I made,” read another response.

Others simply hankered for British staples. “I really fu---ng miss Marmite,” said one expat. “I miss a cheeky Greggs,” added another.

Nobody is staying in Britain for the Marmite, but the point is that choosing to move from one safe country to another is a very personal decision.

Despite the turmoil of Brexit in the last few years, as well as the reality that jobs have gone as a result – the UK now has 1.8 million fewer jobs because of Brexit, according to research commissioned by City Hall – most people’s choices about where to live have little to do with politics.

Warnings about London losing its status as Europe’s financial hub post-Brexit have already proven to be hugely overblown.

Talk about London’s standing as a finance hub post-Brexit had gone pretty quiet until the last few weeks  when Wall Street giant Goldman Sachs reignited the debate in finance circles.

First, the US lender moved one of its top bankers to Paris, a relocation met with such unnecessary fanfare that the response itself backs the argument that the French capital has failed to steal the City’s crown.

Then, Goldman scrapped the bonus cap for its British bankers, in a move that will allow star traders to earn up to 25 times their salary.

It is the first major bank to change its rules after the Government abandoned an EU bonus cap last year. The stage is now set for others to follow.

An executive at a rival bank says Goldman’s decision “undoubtedly” makes London more attractive in finance circles, mirroring New York counterparts and putting pressure on other financial centres in Europe to do the same.

While in reality, most bankers are unlikely to see huge swings in their pay – since the cap was introduced in 2014 banks have simply bumped up base salaries – the removal of the cap gives banks the go-ahead to tempt superstar bankers with US-style bonuses.

British-born trader Ed Emerson earned an estimated $100m (£78m) over three years running Goldman Sachs’s commodities arm in New York before leaving last year.

Prior to that, Barclays investment bank head Rich Ricci pocketed £18m in pay awards in 2013, the year before the bonus cap was introduced.

The race is now on for others to bring back multimillion-pound bonuses, even if rivals believe it will only benefit a small proportion of the profession.

I was told earlier this year that City institutions had delayed changing pay deals after trading floors became “moan central,” with bankers complaining that lower fixed pay could stretch their finances.

Higher fixed salaries are popular, but banks want to control their fixed costs while rewarding rainmakers. So as senior traders grumble away, bank bosses see this as a huge opportunity to boost London.

A Goldman insider says one of the “big reasons” to go ahead with the removal of the bonus cap was to compete with other financial centres better.

Richard Gnodde, Goldman’s international chief, said years ago that removing the bonus cap would “put the UK on the same footing, aside from the EU, with every other major financial centre” and “for sure” makes London more attractive.

“If I move a senior person between New York and London I am driving up the fixed cost of our operations,” he previously told the Financial Times. “If that rule doesn’t exist, I don’t have to think about that.”

It marks another win for London, which has bounced back over and over again.

Restaurants and theatres feel busier than ever, with research by the Centre for Cities showing that Londoners’ escape to the country during the first Covid lockdown was modest and short-lived.

Even long-suffering Oxford Street is recovering as visitor numbers return, partly thanks to the convenience of the Elizabeth Line.

HMV returned to the street in November while Ikea is pegged for an autumn opening in the area later this year.

London is hard to beat, argues an Italian-born executive who has lived in both London and New York, but has chosen to bring her children up here.

The capital still offers more opportunities compared to other European cities and is more international, she says, adding that it is also easier to live in than New York.

Sadiq Khan, who secured a third term as London Mayor this weekend, said in a speech earlier this year that the consequences of Brexit cannot be “wished away,” and to an extent he is right.

There is no denying that Brexit has benefited rival EU financial centres while denting London’s job market. But the capital’s charms haven’t faded, and the outlook is looking up.

There has been no exodus of talent because people like it too much.

London was never going to be a post-Brexit loser. The bankers about to enjoy their multimillion-pound packages can attest to that.