London is now the capital of the world

Published in the Evening Standard

When I lived in the United States, the ex-pat Brits often used to fall into a competitive parlour game with our American friends. Which city was better, we would ask: London or New York?

That was in the mid-1990s and, back then, the game was not much fun. The result was always the same: on every measure, even the most proud Londoner had to concede, New York was the winner. (When your strongest argument is the quality of London's tea, you know you're beaten).

Now the contest has evened up, bigtime. If anything, these days it's our Manhattan friends who are on the defensive. Witness this week's report by consultants McKinsey, warning New Yorkers that Wall Street is losing its place as the world's pre-eminent financial centre to...London. New York was told that it risks seeing close to 60,000 jobs shift to London, as the British capital becomes the place where the surging economies of Russia and China come to do business.

The London Stock Exchange now has 419 international companies listed on it; New York has 174. As if to prove that the City has become the epicentre of globalisation, the London exchange has resiliently fought off a takeover attempt from the US market Nasdaq. Why do we need the Americans, London is saying: we're the future now.

It all adds up to rather more persuasive evidence of London's edge than the quality of Typhoo. And it's not just the City's strength as the capital of world capital. On all the measures my friends and I used to deploy in those late-night NY-LON arguments, this city is either amply holding its own or edging ahead. When I was in New York last autumn, I came away with a feeling I hadn't known a decade earlier. The city still thrills as it always did: the brashness and exuberance endure, even after the trauma of 9/11. But no longer did London pale by comparison. No longer were we the tired older brother, outrun by our younger, more energetic sibling.

On the contrary, each of New York's great assets can now be matched by London's. Sure, they've got Broadway, but the West End is having as much impact on them as they once had on us. Alan Bennett's the History Boys swept the Tonys, while next month - in the cultural equivalent of selling sand to the Sahara - we'll have the cheek to export to the Americans a slice of their own recent history, with the transfer to Broadway of the outstanding Frost/Nixon.

It's true that the US critics savaged Gordon Ramsay's foray into the New York restaurant market, but London cuisine is no longer the oxymoronic joke it once was. Instead this city is now, unarguably, what the Americans call a 'restaurant town' with world class eateries from Covent Garden to Chelsea (several of them bagging a clutch of new Michelin stars just yesterday).

Nor is London shopping the poor relation it once was: Harvey Nicks can look Bergdorf Goodman in the eye. What's more, we are developing that quintessential Manhattan feature, a genuine skyline – often controversially – thanks to the likes of the Gherkin, the Eye and Canary Wharf. We even have our very own, big-mouth, shoot-from-the-hip, US-style mayor in Ken Livingstone (while Manhattan is ruled by the more restrained, almost gentlemanly figure of Michael Bloomberg).

Part symptom, part cause of this rapid catch-up by London of New York is the fact that we now have a crucial feature in common: we are as diverse as they are. As much as 40% of London's population was born outside the UK. They are the new arrivals so long mythologised by New York culture, the young men and women of ambition who come to the big city believing that if they can make it here, they can make it anywhere. For more than a century, those newcomers have been the lifeblood of New York, making the place bristle with restless energy. But now London enjoys the same constant transfusion of new blood, as Latvians or Rwandans or Poles head here to chase their dreams.

What it adds up to is a London enjoying a confidence surely not felt since the Victorian era. The doyen of London studies, the LSE's Tony Travers, states it simply: "We're in the middle of a full-throttle golden age."

Inevitably, there is some tunnel at the end of all this light. The explosion of wealth is sending property prices in London's poshest areas through their well-appointed roofs, as Russian squillionaires bid against German bankers and UK hedge-fund tycoons for an address in Belgravia. The result is the madness that sees a Chelsea broom-cupboard go on sale as a "studio" for #170,000 this week - and receive several offers. Yet most analysts reckon these spiralling prices will stay confined to the higher altitudes of the London property market, barely affecting the cost of an average home in those postcodes lacking the prestige of an SW.

More serious is how difficult it can sometimes feel to live inside this seething, throbbing city, whether its congestion on the roads or the sheer number of people on the street. If we keep growing, outpacing even New York, how liveable will London be?

It's fair to wonder too how the country as a whole can hang together, when the South East economy keeps stretching further and further ahead of the rest of the UK. And since London is only getting more diverse, it's legitimate to ask what will happen when, say, 50% of Londoners are born outside the UK, or 60% or 70%. None of us have lived in such a city before; how to make it work is unchartered territory.

These, though, are the problems of success, ones Londoners will have to solve. But for now we should savour the moment. Even our greatest rival admits it: London is fast becoming the capital of the world.

Posted on January 25, 2007 10:22 AM

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