Brexit will push up costs for banks by as much as 4 per cent and their capital requirements will rise up to 30 per cent, according to the most detailed assessment yet of what Britain’s departure from the EU means for the sector. The findings by consultants Oliver Wyman will make grim reading for its bank clients, many of which are struggling with low profitability. They come a day after HSBC became the first lender to put a price tag on Brexit, saying the immediate disruption would cost it $200m-$300m. Stuart Gulliver, chief executive of HSBC, said $1bn of revenue in its global banking and markets unit would be put “at risk” by Britain leaving the EU. But he said it planned protect this revenue by moving up to 1,000 of its 6,000 UK investment banking jobs to France. The pace of announcements about banks’ Brexit plans has picked up in recent weeks, partly because of pressure from the Bank of England for them to submit their plans for coping with the “worst-case scenario” of a hard Brexit, severing access to EU clients. The UK is set to leave the EU in March 2019. Such plans are expected to cause duplication of resources and capital for large banks in Europe, Oliver Wyman warned. It said this may cause some banks to abandon some European activities altogether and shift resources to the US and Asia. “At the moment what everyone is doing is planning to be able to continue doing what they already do after a hard Brexit,” said Matthew Austen, head of European corporate and institutional banking at Oliver Wyman. “Once you have done that, if you have a strong performance in the US or Asia, then that is when you start to look at the post-Brexit foundations and it will prompt you to look at what the right business mix is,” he said. The consultancy, which has access to detailed figures on almost every bank from the benchmarking work it does for the sector, estimated that 2 percentage points would be knocked off wholesale banks’ return on equity in Europe because of the disruption. Wholesale banks — which serve corporate and institutional clients — would need to find $30bn-$50bn extra capital to support their new European operations, an increase of 15 to 30 per cent, it estimated. The industry’s annual costs would rise by $1bn, or 2 to 4 per cent. “Any time you split a portfolio up — whether it be a credit portfolio or a trading book portfolio — you lose the benefits of diversification that allow you to reduce the capital you hold against it,” said Mr Austen. Many banks have decided they cannot afford to wait for the political uncertainty over the outcome of Brexit negotiations to clear before implementing their plans and have started finding office space and applying for licences with regulators. “Once everyone is back from this summer holidays, the annual planning process will really start in earnest and at that point people will start planning for next year’s costs and returns,” said Mr Austen. “As you move into the back end of this year and the start of next year you have to start making those decisions. You would want to have moved people by next summer if they are going to get their kids into school in September.” The consultancy stuck to the forecast it made last year that Brexit would drive 31,000-35,000 financial services jobs out of the UK, of which 12,000-17,000 would be in banking. In a worst-case scenario, in which euro clearing is shifted to the eurozone, banks could shift as many as 40,000 jobs out of the UK. Read again Brexit set to raise UK banks' costs 4% and capital needs 30% : http://ift.tt/2vmXqMQ
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Senior officials involved in Britain’s withdrawal from the EU have accused Theresa May of wasting the past year, claiming that the prime minister’s “control freak” regime has stifled arguments over policy and alienated other EU countries Current and former senior civil servants speak of extreme frustration within Whitehall at Mrs May’s handling of Brexit negotiations in the period between last year’s EU referendum and the UK general election in June. They say that Mrs May tied the hands of Britain’s negotiators with policies devised without proper cabinet consultation, while her inner circle in Downing Street shielded her from “difficult” news from Brussels. “It has been a completely wasted year while the Tories negotiated with themselves,” said John Kerr, a crossbench peer and former head of the Foreign Office. “There has been a sort of policy paralysis where Number 10 imposed a control freak freeze.” Nicholas Macpherson, a crossbench peer who was the top official at the Treasury until last year, said: “All too frequently in the last year the national interest has been subordinated to party interest.” Philip Hammond, the chancellor, admitted last month that ministers were designing policies from square one after the Conservatives lost their parliamentary majority in the general election. “Five weeks ago the idea of a transition period was quite a new concept,” he told the BBC’s Andrew Marr Show. “I think now you’d find that pretty much everybody round the cabinet table accepts that there will be some kind of transition.” But some government insiders say Mrs May’s approach in the months after the Brexit vote meant that the UK was not even “starting from scratch”. “It’s worse than that,” said one senior official working on Brexit.
“There has been a failure of diplomacy,” the official added. “We have had the prime minister talking about no deal being better than a bad deal and [foreign secretary] Boris Johnson suggesting we aren’t bothered about getting a deal. The mood on the other side of the Channel is awful.” Another leading Whitehall figure said: “There should one day be a parliamentary inquiry into what went wrong in the first year. At this point in the negotiation, the [European] Commission and the [EU] Council are significantly ahead of us, and frankly they are astonished.” Much of the criticism in Whitehall is aimed at Mrs May’s former co-chiefs of staff, Nick Timothy and Fiona Hill, who reportedly took many of the key Brexit decisions in the months following the EU referendum. Whitehall insiders say that Mr Timothy and Ms Hill, who resigned following the general election, often made decisions with little or no consultation with the cabinet. Ministers point to last year’s Conservative party conference, saying there was little discussion about Mrs May’s conference pledge to trigger Article 50 by the end of March 2017 — even though it was unclear at that stage what kind of Brexit deal Mrs May wanted. Ministers say they were also not consulted on Mrs May’s conference promise that ending European Court of Justice jurisdiction would be a “red line” in Brexit negotiations — despite the pledge having far-reaching consequences for future EU regulatory co-operation. Mr Timothy is understood to have added the “red line” commitment to Mrs May’s speech. Some civil servants say Jeremy Heywood, the cabinet secretary, should have done more to challenge the secretive and tightly held decision-making structure. “Jeremy Heywood has achieved a lot but he placed the value of getting into the room with the PM above the need to deliver tough messages,” said one senior Whitehall figure. “If the cabinet secretary doesn’t turn and fight, then the rest of the civil service won’t either.” But Downing Street officials and those working closely with Mrs May and Sir Jeremy have fiercely rejected such accusations. One official close to the prime minister said it was “extraordinary self-flagellation or politically motivated criticism to suggest that we have wasted a year”. David Jones, who was a junior minister in the Department for Exiting the EU until he was sacked following the election, said the government had admirably built an exit strategy from nothing after David Cameron, the former prime minister, had said there should be no official Brexit preparations before the EU referendum. Mr Jones said Mr Cameron’s strategy had led to the subsequent scramble to devise an exit strategy: “If there was any wasted time, it was that.” A Number 10 spokesman said: “This characterisation is completely misleading. We’ll make no apologies for doing the necessary preparation for triggering Article 50 so we could start the negotiations in the best possible position.
“In the last year we have made real progress towards delivering the outcome of the EU referendum and setting out how we will grasp the opportunities of Brexit.” Allies point to the government’s publication of a white paper setting out its overall Brexit strategy, as well as the Article 50 bill, which passed through parliament. Officials are now working on eight parliamentary bills to enact Brexit, and Sir Jeremy is credited with overseeing the creation of two Whitehall departments — the Department for Exiting the EU and the Department for International Trade — shortly after last year’s Brexit vote. Even critics admit that Britain’s negotiating team in Brussels, comprising 100 civil servants, has been relatively well prepared, despite an awkward recent photograph that appeared to show Brexit secretary David Davis without briefing notes. But complaints continue to reverberate around Whitehall, with one veteran civil servant saying that circumstances had not improved since the election. “We have moved from a massively intolerant centre to a situation of anarchy,” he said. “We have gone from having a captain on the bridge to having no captain at all.” Lord Macpherson said that while there were “signs of progress in recent weeks”, the “absence of realism in the government’s approach makes ‘no deal’ an evens chance”. He added, however, that despite the discord he did not think the situation irretrievable. “Historically, Britain has always stared into the abyss, only to pull back,” he said. “My hope is that someone will get a grip before it’s too late.” Read again Civil servants lament Theresa May's 'wasted year' over Brexit : http://ift.tt/2vng3jzTo continue using CNN.com, you need to update your web browser or use a different one. You may want to try one of the following alternatives:
[unable to retrieve full-text content] [unable to retrieve full-text content] LONDON — On July 24, trade talks began between Britain and America. All right, they weren’t formally called trade talks: As long as Britain is still in the European Union, it is supposed to contract out all its commercial decisions to Brussels. Officially, the United States trade representative, Robert Lighthizer, and the British trade secretary, Liam Fox, met for broad discussions about what might happen when Brexit takes effect in 2019. Still, both sides can see the prize. For decades, there have been fitful negotiations between Washington and Brussels on trade liberalization, but they have always run up against the protectionism of France and some southern European states. Between Britain and America, there are few such problems. Each country is the other’s biggest investor: About a million Americans work for British-owned companies, and a similar number of Britons work for American-owned companies. A liberal trade deal, based on mutual recognition of standards and qualifications, will bolster both economies. Prime Minister Theresa May keeps saying she wants Britain to be a “global leader in free trade.” In parallel to the talks with Washington, Britain is starting discussions with China, Japan, India, Australia and others. Global trade deals should supplement rather than replace Britain’s economic relationship with the remaining 27 European Union states. The nonmember Switzerland, for example, exports nearly five times as much per head as Britain does, mostly to the European Union, while simultaneously having bilateral trade deals around the world. The idea of a more global Britain emerging from the European Union may strike you as jarring. Much of the commentary over the past year, at least outside Britain, has portrayed Brexit as a nativist and protectionist phenomenon. I keep reading — often in the pages of this newspaper — that the vote was overwhelmingly about immigration. In fact, opinion polls before and after the vote concurred that the main issue for Leavers was democracy. An exit poll of 12,369 people, for example, found that 49 percent of Leavers had been motivated by the desire to bring decision making back to Britain, and only 33 percent by wanting more control of immigration. I’ve learned in politics that almost no one listens to the other side. Rather than going to the source, people read allies’ reports of what the other side is supposed to have said. If a British person tells you that the vote was “all about immigration,” I can almost guarantee that you are talking to a Remainer. Those among my friends who voted to stay in the European Union didn’t weigh and then dismiss the economic and democratic cases against membership; they never heard them. The same confirmation bias can be seen in their determination to find bad economic news. Here is a selection of British reports from the past two weeks: Unemployment fell again, as every month since the vote, to 1.49 million (from 1.67 million in June of last year); manufacturing orders are at their highest level since August 1988; retail sales, official figures show, are up 2.9 percent on this time last year. Exports were up 10 percent year-on-year in May, helped by the long-overdue correction of the exchange rate. Remainers like to point to the fall in sterling, but rarely mention that, before the vote, the International Monetary Fund and the Bank of England agreed that Britain’s currency, seen as a haven from the travails of the euro, was artificially expensive. Continental Europeans evidently still regard the British economy as attractive; more of them are working in Britain than ever before. As for the supposed decline of London, a number of European banks, including Deutsche Bank and ING, have grown their operations here since the referendum. Last year, Wells Fargo spent £300 million (about $392 million) on its new European headquarters — in London. The latest survey from the Robert Walters City Jobs Index, for July, reported that hiring in financial services was up 13 percent year-on-year. You may think I’m prone to a confirmation bias of my own. But it’s only fair to contrast what has happened since the Brexit vote with what was predicted during the campaign. Remain campaigners told us to expect a recession in 2016; in fact, Britain grew faster in the six months after the referendum than in the six months before. They told us that the FTSE 100 index of leading companies’ share prices would collapse; in fact, British stocks performed strongly after the Brexit vote. They told us that Scotland would leave Britain; in fact, support for separatism has collapsed, and the Scottish first minister, Nicola Sturgeon, has shelved her planned independence referendum. Most people, whichever way they voted, are celebrating the good news. But a few Euro-fanatics, disproportionately prominent on the BBC and at The Financial Times, are acting like doomsday cultists, constantly postponing the date of their promised apocalypse. First, a Leave vote was supposed to wreck the economy. Then, it became “wait until we begin the disengagement.” Now it’s “wait until you see what a bad deal we get from the European Union.” It’s odd. The people who are the most pro-union are generally the most convinced that the union will act in a self-harming way out of spite. I have a higher opinion of our European allies. But even if I didn’t, I’d still expect a deal. Adam Smith observed that “it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” It is not from the benevolence of the European Union that we expect a free-trade agreement: Exchange makes everyone richer. If you want a picture of Britain’s future relationship with the European Union, think of Canada’s with the United States. Canadians have a type of federation on their doorstep that they decline to join, but with which they enjoy the closest possible diplomatic, military and economic ties. Two years from now, in a similar vein, the European Union will have lost a bad tenant and gained a good neighbor. Read again The Good News on Brexit They're Not Telling You : http://ift.tt/2uQ2jehEU countries have until midnight to submit bids to provide a new home for two agencies that will be relocated from the UK after Brexit. The European Banking Authority (EBA) and European Medicines Agency (EMA), based in Canary Wharf in London, employ just over 1,000 staff between them. The banking and medicines agencies are seen as the first spoils of Brexit by the 27 remaining members of the EU. About 20 countries are expected to enter the bidding process. Glossy brochuresThere will be fierce competition to attract the agencies' highly skilled employees, their families and the business that comes with them. This includes about 40,000 hotel stays for visitors each year. Countries have printed glossy brochures, posted promotional videos online and hired lobbying firms. Frankfurt - location of the European Central Bank and a major financial centre - is seen as favourite to get the EBA. But Paris is also keen to win that contest. And the Irish government is marketing Dublin as a location, with a brochure that highlights the city's business culture as well as "beaches and mountains on its doorstep". The contest has pitched larger countries against smaller ones from across the EU. Each country can bid to host one or both agencies. But it can only make one bid per agency. The European Commission will assess the entries based on the quality of office space, job opportunities for spouses, good "European-oriented" schooling and transport links. Accessibility and efficient infrastructure are the top two agreed criteria. Amid the rivalry to host the EMA, the Netherlands, Ireland and Denmark have hosted events in Brussels to promote their bids, the Politico news website reports. The number of states vying for the EMA is reckoned to be 21. The 27 remaining EU countries are determined that the UK will pay the relocation bill, as Brexit was a UK decision. What do the agencies do?EMA
What might Brexit mean for medicines and clinical trials? Have the UK's trade options changed? EBA
European ministers will use a complicated voting system to choose the winners in November. EU leaders agreed on the procedure in June, and some observers have already likened it to the Eurovision Song Contest. Before that vote, the European Commission will assess the competing bids and make its recommendations. In November each of the EU foreign ministers will vote in order of preference - three points for the preferred bid, two points for the second-favourite and one point for the third. If no single country obtains 14 first-preference votes the voting will go to a second round. Each country in that round will have just one vote to cast - for its favourite. The EU is keen to locate more of its agencies in the newer member states of Central and Eastern Europe. Read again Brexit: Race to host EU agencies relocated from London - BBC News : http://ift.tt/2vXjdrlLONDON — Allowing free movement of people after Britain leaves the European Union would not "keep faith" with the Brexit vote, the international trade secretary said, underlining divisions in the government over the issue. Liam Fox told the Sunday Times that senior government ministers had not reached a consensus on retaining free movement of people for a transitional period, a proposal outlined by finance minister Philip Hammond on Friday. Hammond had said should be no immediate changes to immigration or trading rules when Britain leaves the EU in March 2019, and the status quo could endure until mid-2022. "If there have been discussions on that, I have not been party to them," Fox told the newspaper. "I have not been involved in any discussion on that, nor have I signified my agreement to anything like that." Divisions between ministers over Brexit strategy have become more open after Prime Minister Theresa May lost her majority in an early election she called in June. With May away on holiday, the debate has intensified. Hammond has led a push within the government to secure a business-friendly Brexit that avoids a sudden change in 2019 in the relationship between Britain and the EU, which buys nearly half the country's exports. Fox had previously said he backed a transition agreement to smooth Britain's exit from the trading bloc, but on Sunday he indicated that free movement should not continue. "We made it clear that control of our own borders was one of the elements we wanted in the referendum, and unregulated free movement would seem to me not to keep faith with that decision," he told the Sunday Times. Fox, who campaigned for Britain to leave the EU in last year's referendum, said any transitional deal needed to be jointly agreed by senior ministers. "It can't just be made by an individual or any group within the cabinet," he said. An ally of British foreign minister Boris Johnson also came out against Hammond's plan on Sunday. Gerard Lyons, a former economic adviser to Johnson when he was London mayor, said a transition period should last for no more than two years. "Many of the 'risks' being highlighted about Brexit are perceived risks, not real risks. And a two-year transition would alleviate many concerns," Lyons said in a Sunday Telegraph newspaper column. A growing number of other ministers have said they agree with the need for a transition period but Johnson - who has advocated a tough approach to the Brexit negotiations - has been silent on the issue recently. Late on Friday, Hammond and Johnson issued a joint statement saying they were "working together to take the UK out of the EU" and its single market, customs union and the jurisdiction of the European Court of Justice. The statement made no mention of transitional arrangements. (Reporting by William Schomberg and Paul Sandle; Editing by James Dalgleish/Keith Weir) Read again British Government Divided on Free Movement After Brexit : http://ift.tt/2vdzF8ZThe UK will not cut taxes and regulations after Brexit to try to undercut European rivals, Chancellor Philip Hammond has suggested. He told French newspaper Le Monde that the tax raised as a percentage of the British economy "puts us right in the middle" of the European pack. "We don't want that to change, even after we've left the EU," he said. This is at odds with what Mr Hammond said in an interview with German newspaper Welt am Sonntag in January. BBC political correspondent Chris Mason says that having lost their majority at the election, the Conservatives would struggle to persuade the Commons to support slashing taxes and regulation. Mr Hammond told Le Monde: "I often hear it said that the UK is considering participating in unfair competition in regulation and tax. "That is neither our plan nor our vision for the future. "I would expect us to remain a country with a social, economic and cultural model that is recognisably European." 'Change our model'Mr Hammond was asked earlier this year by Welt am Sonntag whether the UK could become a tax haven. He said he was "optimistic" about securing a good trade deal with the EU but if this did not happen "you can be sure we will do whatever we have to do". "If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short-term," he said at the time. "In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness." In the French interview, Mr Hammond said the UK wanted EU workers be part of the British economy and carry on with their family life in the country, and the same for British expats working in Europe. He said the bill for Brexit was not a question about money, but how the UK leaves the EU without causing problems for businesses and people. Breaking up the City of London would benefit New York not Frankfurt or Paris, he added. Read again Brexit: UK will not cut taxes, says Philip Hammond : http://ift.tt/2tVPfH2LONDON — Up an alley, beyond some hoarding, through what can feel like Harry Potter’s secret portal, the underworld of an unfinished Crossrail station sprawls beneath the traffic and commotion of Tottenham Court Road. Escalator banks descend through a sleek, silent black ticket hall where towering, empty, white-tiled passageways snake toward the new, vaulted train platform, curving like a half moon into the subterranean darkness. Crossrail is not your average subway. London’s $20 billion high-speed train line, which plans to start taking passengers late next year, is Europe’s biggest infrastructure project. It will be so fast that crucial travel times across the city should be cut by more than half. The length of two soccer pitches, with a capacity for 1,500 people, its trains will be able to carry twice the number of passengers as an ordinary London subway. While Londoners love to moan about their public transit network, by comparison New York has barely managed to construct four subway stops in about a half-century and its aged, rapidly collapsing subway system now threatens to bring the city to a halt. But standing one recent morning on that empty Crossrail platform, where construction workers in orange gear and hard hats hauled shiny metal panels to line the walls, I still couldn’t help wondering whether the new train leads toward another glorious era for this city, or signals the end of one. Before Britain voted last summer to leave the European Union, Crossrail was conceived for a London open to the world and speeding into the future. Now, with Brexit, the nightmare scenario is that this massive project, to provide more trains moving more people more quickly through a growing city, ends up moving fewer people more quickly through a shrinking city. Crossrail was built by a Britain whose strength grew, for better and worse, out of a longstanding, stodgy but reliable confidence that the country knew itself and where it hoped to go in the century ahead. It is no longer even certain that Prime Minister Theresa May will survive the year. It was an especially unpromising sign this spring when Mrs. May’s Conservative government, as if fearing exactly what anti-Brexiters predicted about an economic downturn, issued a campaign manifesto that conspicuously omitted funding for Crossrail 2, the long-planned, $39 billion critical north-south sequel to Crossrail’s east-west line. Since then, the government’s transport secretary has endorsed the project — provided that the city pay half the whopping cost, upfront. The semi-reversal suggested a grudging acknowledgment that, whatever the political fallout or economic prospects, Britain ultimately needs a thriving London all the more after Brexit. During the past three decades, London has been transfigured by wild growth, much of it the consequence of government-sustained megaprojects: Along with Crossrail, there have been the stupendous renovations to King’s Cross and St. Pancras Stations, the wholesale invention of Canary Wharf, the addition of the Jubilee subway line, the Olympic makeover at Stratford in East London and the expansion of Heathrow Airport. These megaprojects, in different ways, helped remake London into the great global city-state of Europe, a 21st-century melting pot and Sybaris of culture and free-market prosperity — at the same time that they clearly exacerbated underlying urban inefficiencies and stirred resentment elsewhere in England toward the city. Crossrail was intended as a kind of democratizing corrective, at once shrinking the city and expanding on a vision of London as a great, inclusive metropolis. While it will whisk bankers at new speeds from their office towers and multimillion-dollar aeries to Heathrow, it will also help millions of now-marginalized, lower-income workers, unable to afford runaway home prices in and around the center of the city, to live in cheaper neighborhoods often far from their jobs. But what if the flow of incoming bankers slows, if immigrants look elsewhere, if the excesses of European money and human capital that helped drive growth begin to dry up? As Brexit skeptics warned, the pound has lost value and inflation is starting to rise. Some companies are already making plans to move employees out of London. And as London goes, so goes Britain. A New Spine for an Old CityI spent a few days traveling the Crossrail route, trying to decipher what it might mean for London. In one respect, the train underscores and extends the city’s centuries-old, traditional identity as a sprawling, horizontal capital, an agglomeration of disparate, far-flung villages. Extending roughly 70 miles, it is built to speed about 200 million passengers a year in a kind of Y from far to the west of the city, in the county of Berkshire, through Heathrow, to the heart of London, forking east to Shenfield in Essex and to the neighborhood called Abbey Wood, on the historically neglected southeast side of the Thames River. Linked with the existing Underground subway network, it will be rechristened the Elizabeth Line, inserting what is in effect a new steel-and-wheels spine into Britain’s capital. “Crossrail is a culmination of years of serious thinking by experts and public officials about what London needs, the imbalance of east and west and how to unite the city,” said Ricky Burdett, an architect, city adviser and director of LSE Cities at the London School of Economics. London, Mr. Burdett noted, is historically poor in the east, rich in the west and along the periphery, although that east-west distinction has eroded as gentrification has seeped outward. Underserved and long-disconnected East London neighborhoods like Shoreditch and Whitechapel in recent years have become chic and largely unaffordable to many Londoners. The city has added light-rail lines to help some of those areas, but only Crossrail is capable of “tying together many of the developments that have transformed London,” Mr. Burdett said. No development on the west end of the Crossrail line is more ambitious than Heathrow. John Holland-Kaye, the airport’s chief executive officer, met me one morning in an empty conference room near the airport and instantly ticked off some figures. Heathrow is not only Britain’s busiest airport. It is hoped that the airport’s expansion, based on the prospect of a new runway, might generate up to 180,000 new jobs across Britain, roughly 40,000 of them in London. Crossrail now promises to bring six million people and 80 percent of London’s corporations within an hour’s commute of the airport, up from three million and 50 percent today. “When Crossrail is done, our employees could just as easily come from East London as from our local community,” Mr. Holland-Kaye said. “The train effectively opens up the whole of the city.” Transit as Economic EngineBut Brexit threatens Heathrow’s economy with more restrictive customs and immigration rules. Mr. Holland-Kaye acknowledged the threat but framed Crossrail as a kind of hedge against Brexit. He cited as a precedent the area around King’s Cross, once notorious for drugs and prostitution, metamorphosed after the renovation of the decrepit King’s Cross station and its neighbor St. Pancras, now serving the Eurostar express train to Paris and other cities in Europe. King’s Cross today is home to an art school, The Guardian, a cluster of high-tech medical research centers and Google’s future European headquarters. The point: Major, long-term infrastructure projects support game-changing investments. Crossrail proves Britain’s continuing commitment to this steel and concrete approach, Mr. Holland-Kaye said. From Heathrow, riders will need just over a half-hour via Crossrail to travel east to Canary Wharf, the defunct docklands turned world financial hub, which today employs more than 112,000 people. When the site opened in the late 1980s, the aptly named Narrow Street was its only real access road. Canary Wharf went belly up. Then London broke ground for the Jubilee subway line, linking Canary Wharf by mass transit to the heart of the city, and international banks started moving in. This is one reason George Iacobescu, Canary Wharf’s longtime chairman, helped lead the push for Crossrail. “London’s future prosperity depends on it,” he said. He summoned me into a big, bright white office where he stood behind a giant tabletop display of London (think Goldfinger’s model of Fort Knox). Mr. Iacobescu flicked switches on the table. One by one, they lit up various rail lines that today serve Canary Wharf, each line coinciding with increases in jobs and revenues. Theatrically, he paused before the last switch. It illuminated Crossrail. “We are home to many of the world’s great financial institutions,” Mr. Iacobescu said, pointing on the model to where Foster & Partners, the celebrated London-based architecture firm, has designed Canary Wharf’s Crossrail Station, a spectacular glass and timber tubular structure, docked like a giant cruise ship beside the firm’s HSBC tower. Nearby, Canary Wharf plans to build thousands of new luxury (and some affordable) homes and other developments by high-end architects like Herzog & de Meuron to turn Canary Wharf into more of a neighborhood. “We expect to create thousands more jobs,” Mr. Iacobescu said. “The danger with Brexit,” he added, “is that if Britain gets out of the European Union and doesn’t keep the U.K. an attractive place for financial institutions, they will think twice about growing here. The issue isn’t banks leaving Canary Wharf. Most of them have long-term leases. The issue will be the pace of growth.” But that’s not quite true. Because of Brexit worries, construction plans for several of Canary Wharf’s new buildings have already been put on hold. And long-term leases can always be broken. “The bottom line is that nobody has the faintest idea yet what the Brexit effect will be,” Tony Travers, a veteran urban policy expert, told me. “Investments from the European Union may shrink. But why would investors from India or Canada or the United States be put off? If anything, Brexit may make Britain more likely to give them what they want.” Lately, the Leadenhall Building, otherwise known as the Cheesegrater, the tallest tower in the old, central financial district called the City of London, designed by Rogers Stirk Harbour & Partners, sold to a Chinese property tycoon for $1.5 billion, the second-highest-ever sale of a building in Britain. Qataris were behind the Shard, the Renzo Piano-designed tower that is London’s sleekest skyscraper. Malaysians are developing the former Battersea Power Station, where Apple is an anchor tenant. “The trajectory of real estate investment here is not only based on Europeans,” Mr. Burdett stressed. So, Crossrail or Brexit?Connectivity is destiny in the farthest reaches of East London. Thamesmead, a social housing development from the 1960s, lies a half-hour or so by bus beyond the train’s final stop and its ripple effects. Equivalent in area to all of central London, it is home to just 50,000 residents, once nearly all of them white and working-class, but today, increasingly, Nigerians. Peabody, a nonprofit housing organization, has announced plans to build hundreds more apartments in Thamesmead. Some lovely, neatly tended homes already exist alongside Brutalist blocks, rundown but now stylish (this is where “A Clockwork Orange” was filmed). That said, with the lowest average income in London, Thamesmead has few stores, little street life and an abundance of sewage treatment plants and prisons. It suffers from its isolation. “Thamesmead was built on a promise of transit connectivity that never happened,” Teresa Pearce, a member of Parliament who represents the district, told me. “You see the results.” By comparison, the final stop on that southeast spur of Crossrail is Abbey Wood, where Sainsbury’s, the chain store and a bellwether of gentrification and commercial investment, has lately opened a shop in anticipation of the train. Streets here are lined with terrace houses now occupied by plasterers and truck drivers. Record numbers of landlords in the area have been filing applications for renovations, believing that Crossrail will attract bankers and lawyers. Property values are expected to rise on average 10 percent around all future stations along the Crossrail route. Change is even more acute one stop before Abbey Wood, in Woolwich. The Berkeley Group, a big British real estate company, is building 5,000 sleek, mostly high-end apartments around the future Crossrail station, which the developer paid millions to help construct. Hugging the Thames River, Woolwich is the former site of the Royal Arsenal and Henry VIII’s dockyard, where Charles Darwin’s Beagle was built. Historically working-class, it, too, used to be all white but has come to attract Caribbean and Asian immigrants, with nearly 40 percent of residents today living in social housing. Berkeley’s development and the Woolwich Crossrail station are separated from the rest of Woolwich by a highway called Plumstead Road. On one side of the road, old Woolwich is a warren of modest shops and aged social housing. On the other, baristas now dispense macchiatos on leafy patios. Signs advertise luxury apartments. A single, 31-year-old corporate lawyer employed in the City, Calum Docherty, who is hunting for a home, was intrigued by the Berkeley development. “But I’m still looking,” he told me. “Woolwich wasn’t anywhere on my radar before Crossrail. The train has expanded my concept of London. “That said, it’s a bit of a mental jump to commit to borrowing half a million pounds,” he added. “With Brexit and all.” Read again London's New Subway Symbolized the Future. Then Came Brexit. : http://ift.tt/2heUWcR |
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