We can’t force people to stay. If they don’t need the office any more, there is no point in renting it. Instead, we need a plan to make business districts more attractive – and we need it fast. What would that look like? There are three obvious places to start.
First, we should dramatically simplify rezoning rules. Space that is no longer needed for bankers could be used for apartments, schools, restaurants or hotels.
It is not as if there is not a demand for property in the UK – it is just that the type of space we need has changed. But if planners hold up every application for years, then it is not going to happen.
Next, if necessary we should slash business rates. The rent is only a fraction of the cost of occupying an office building.
Taxes make up the rest, and while it might cost the Government some lost revenue it will be cheaper in the medium term than allowing those districts to go into rapid decline.
Finally, if that doesn’t work, and if the exodus starts to accelerate, then we should turn them into enterprise zones.
As it happens, Canary Wharf was exactly that when it was first redeveloped when Margaret Thatcher was prime minister in the 1980s, so it would simply be going back to its roots.
We could lower corporation tax for any company willing to headquarter itself in a designated zone, and perhaps lower National Insurance charges as well.
Even better, we could offer the special rates only to firms moving from Paris, Frankfurt or New York, so that we were generating new wealth for the UK, and not just shifting it from one part of the country to another.
Just like slashing business rates, it might cost a little in the short term, but it would be a lot better than allowing whole areas to go into steep decline.
Developers can spruce up their properties with arts festivals. They can put up some flags, and attract some classy restaurants. They can offer rent reductions, and easier terms. But none of that will be enough to make any real difference.
In fact, the decision by HSBC to move out of Canary Wharf and to downsize its office space should be a wake-up call.
We need a plan for rescuing our great office centres from turning into ghost towns. And we need it very quickly – because soon it will be too late to do anything about it.
The first desertions from Canary Wharf should strike fear in Britain’s financial centres
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We can’t force people to stay. If they don’t need the office any more, there is no point in renting it. Instead, we need a plan to make business districts more attractive – and we need it fast. What would that look like? There are three obvious places to start.
First, we should dramatically simplify rezoning rules. Space that is no longer needed for bankers could be used for apartments, schools, restaurants or hotels.
It is not as if there is not a demand for property in the UK – it is just that the type of space we need has changed. But if planners hold up every application for years, then it is not going to happen.
Next, if necessary we should slash business rates. The rent is only a fraction of the cost of occupying an office building.
Taxes make up the rest, and while it might cost the Government some lost revenue it will be cheaper in the medium term than allowing those districts to go into rapid decline.
Finally, if that doesn’t work, and if the exodus starts to accelerate, then we should turn them into enterprise zones.
As it happens, Canary Wharf was exactly that when it was first redeveloped when Margaret Thatcher was prime minister in the 1980s, so it would simply be going back to its roots.
We could lower corporation tax for any company willing to headquarter itself in a designated zone, and perhaps lower National Insurance charges as well.
Even better, we could offer the special rates only to firms moving from Paris, Frankfurt or New York, so that we were generating new wealth for the UK, and not just shifting it from one part of the country to another.
Just like slashing business rates, it might cost a little in the short term, but it would be a lot better than allowing whole areas to go into steep decline.
Developers can spruce up their properties with arts festivals. They can put up some flags, and attract some classy restaurants. They can offer rent reductions, and easier terms. But none of that will be enough to make any real difference.
In fact, the decision by HSBC to move out of Canary Wharf and to downsize its office space should be a wake-up call.
We need a plan for rescuing our great office centres from turning into ghost towns. And we need it very quickly – because soon it will be too late to do anything about it.
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