Author: James Warrington
London’s status as a leading global destination for multinational headquarters could be under threat from new immigration laws and Brexit chaos, a new report has warned.
Research carried out by think tank Centre for London showed the capital is the top-ranked destination globally for foreign direct investment into headquarters, attracting 591 projects between 2003 and 2019.
Since 2003, London and the south east have attracted a fifth of the total new investment in headquarter projects in western Europe, more than Ile-de-France, Dublin and Amsterdam-Rotterdam combined.
In addition, the region is the most popular destination for the largest multinational firms, playing host to the European HQs of 55 per cent of the world’s largest 500 companies, according to figures from Deloitte.
But Centre for London warned London’s status as a hotbed for headquarters could be under threat amid changing immigration rules and reputational damage caused by Brexit.
New jobs in activities relating to headquarters have suffered a slowdown since 2016, according to the report, while business visits in London have fallen for the first time since 2009.
“The headquarter economy underpins London’s standing as a global city, and it is vital that local and national decision-makers remain focused on strengthening the city’s offer,” said Nicolas Bosetti, research manager at Centre for London.
“The collapse of London’s HQ city status would occur in a gradual fashion, but its demise would have significant consequences through the loss of jobs, investment and soft power.”
The report called on London authorities to lobby for an immigration policy that supports the city’s role as an economic powerhouse, while urging the government to maintain the UK’s business-friendly climate and labour laws.
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“The government’s proposed immigration policy risks severely damaging London’s competitiveness,” said Rajesh Agrawal, deputy mayor of London for business.
“Although London will always continue to thrive, continue to be open and continue to be a leading global city, we need an immigration system in place that makes it easier not harder for people with the skills our economy needs to come and work here.”