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The City Edition

By Richard Pickering, Head of Futures Strategy

Fiscal ferocity The Chancellor has quelled rumours of the UK becoming a low tax haven following Brexit: ‘The amount of tax we raise as a percentage of our GDP puts us right in the middle of the pack. We don’t want that to change even after we leave the EU’. But never say never, right? In truth the UK (at c.35% of GDP) is already at the low end of taxation for Europe (typically 40%+), but still ahead of Ireland (c.30%) and the US (c.25%), and significantly ahead of the Middle East (typically <5%). Low corporation tax rates often come under criticism from those promoting greater public spending. However, corporate taxes account for only 6% of all UK government revenue; the lion’s share of which comes from income tax (25%), NI (18%) and VAT (17%). SDLT is just 2%. Attracting international business after we leave the EU is likely to require greater resourcefulness.  Inevitably there will be choices to make as to whether we want to tax these businesses directly, or tax the jobs that they create.

Egocentricity? Nestpick has produced a list of the top global cities for Millennials. London finished in a rather disappointing 14th place, with honourable mentions in the top 30 for Manchester, Bristol and Glasgow. Sixteen factors of assessment were designed to draw out those cities with a thriving business ecosystem, affordability, social openness and places to relax. Millennials occupy the minds of many survey makers and employers, but how helpful is this categorisation? Some broad bracketing of Millennials now captures people in their 40s, as well as those just leaving university. They currently account for 25% of the population, but are anticipated to comprise 75% of the workforce by 2025. If the question is ‘what can we do to appeal to 75% of our workforce?’, then it is a very legitimate one. If, however, the answer concerns egos, experience-over-consumerism, and beanbags, then perhaps we need to go back to the virtual whiteboard.

24/7 city A frequently quoted statistic is that our cars spend 95% of their time parked. This is the rationale for dispensing with private ownership of cars as they become automated. However, another culprit of inefficient use is real estate. Buildings that are used in the daytime (e.g. offices) are rarely used at night, and vice versa (e.g. residential). To support Sadiq Khan’s vision for London (launched this week) as ‘a 24 hour city that supports flexible lifestyles’, our real estate needs to rise to a similar challenge. The challenge of integrating offices with resi is significant. However, offices and leisure are already integrating in some co-working spaces, and the retail and leisure combination is an obvious win, with examples of barbers and florists becoming bars at night. Looking forward we should anticipate much more flexible use of our real estate and a blurring of the traditional sectoral lines.

Sex and the city Some of this week’s articles highlight the disparities of wealth and opportunity across our nation’s cities. However, it appears that deep seated attitudinal differences stretch across postcodes on more salacious pursuits. A poll released this week highlights wide disparities on our attitudes to various titillating matters.  For instance, when asked to describe the top characteristic of their ideal lover, 80% of those in St Albans replied ‘kinkiness’ (no wonder house prices are so high) whereas only 13% replied the same in Derry. Meanwhile, only 16% of those in Sunderland described themselves as ‘sexually adventurous’ (in fairness, it is quite cold) whereas, in a reminder that I clearly didn’t get out enough when I lived there, the same figure for Hull is 77%.

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