Is London Losing Its Luster for Business?

Last Updated Jun 19, 2008 4:15 PM EDT

  • Big BenThe Find: London has climbed its way up the league table to become a top city for business, but a new study reveals that the Big Smoke may be losing its hard-won place at the top.
  • The Source: The latest CBI/KPMG London Business Survey of senior executives at more than 100 UK businesses.
The Takeaway: Pessimism about the future of London is rife among business leaders. Six out of ten executives fear the city's competitiveness is threatened -- that's double the number of respondents who were worried last year. What's got these business leaders so concerned?
  1. Bungled taxation reforms
  2. Financing troubles due to the credit crunch
  3. The creaky road and subway (or should I say, tube) network
  4. A shortage of skilled workers
Eight out of ten executives thought that the tax reforms, which include a £30,000 fee for non-doms who opt out of paying UK taxes on overseas income, have damaged the reputation of the UK as an international business destination. That's a pretty strong consensus, but even more managers agreed that the unreliable and overcrowded tube network was a significant negative for London. Nine out of ten said that the poor state of public transport was affecting their businesses.

Almost a third of managers (31 percent) surveyed said they expect to have trouble raising money over the next six months, up a full nine percent from a year ago. Filling skilled positions was also a concern. 72 percent of executives said they were unable to fill some vacancies, though there is some optimism that a new migrant points system will help.

All in all both the volume and value of business activity is still growing in the UK capital, but at a slower rate, and while five percent of business people were pessimistic about their firms' prospects a year ago, 28 percent are today. CBI director-general, Richard Lambert, sums it up: "business is getting more difficult in London, partly because of the global economic slowdown but also the more particular problems of transport and skills."

The Question: Now that's its gone international BNET can ask, what's the best city for business in the world? And what could your city do to be more business friendly?

(Image of Big Ben and phone booth by 13bobby, CC 2.0)

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    Jessica lives in London where she works as a freelance writer with interests in green business and tech, management, and marketing.