London Calling Newsweek

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Special Report: London Calling

April 24, 2005 8:00 PM EDT

For a glimpse into how successful cities evolve, take in the view from the

riverside office of London's mayor. High above the Thames, Ken

Livingstone enjoys a panorama spanning 2,000 years of crowded history.

All around, the survivors of catastrophic fires, wartime bombing and the

wrecker's ball jostle for space with monuments to London's new

prosperity. Just across the river, the medieval Tower of London recalls the

city's past as a seat of power. To the east, the former Docklands, now

home to some of Europe's grandest companies, conjures up its present as agateway to the world. And a thicket of towers, soaring above the skyline,

testifies to the status of Europe's largest and most vibrant center of world

finance.

And London's work isn't done. At 7.3 million, its population is just short of

the combined total for Rome, Paris, Vienna and Brussels. During the last

15 years it has added as many citizens as the entire city of Frankfurt.

Indeed, this is the only major European capital that's actually growing, afavored destination for work-hungry migrants from around the globe. By

2016, according to forecasts, London will gain 810,000 more people.

All that makes the city a developer's Klondike. A score of new

megaprojects are on the drawing board. Among them: a landmark 300-

meter glass pyramid, billed as the tallest building in Europe, at the foot of

London Bridge; a 10 billion pound rail link across the heart of the city, and

the wholesale redevelopment of derelict tracts of East London to make



space for the new Londoners. Remember the Millennium Dome, Britain's

big gesture to the new age? A new settlement of 10,000 homes is rising in

its shadow. By midcentury, tens of thousands could be living in the

Thames Gateway, a string of new communities that will rim the river for 65 kilometers downstream to the sea. "Some cities capture an era--Paris in

the 19th century, or New York in the 1950s and '60s," says Livingstone.

Now it's London's moment--not some cool Britannia fad, fed by a few hot

bands or hip designers, but a wholesale reinvention. More than any other

European capital, London thrives on the outsiders it welcomes in. Almost

a third of today's Londoners were born outside the country. During the past

year alone, tens of thousands of East Europeans have come to the city after Britain opened its borders to workers from the new member states of the

enlarged European Union. More than 50 separate national or ethnic

communities are scattered across a metropolis that sprawls over an area

twice the size of New York's five boroughs. Some 300 languages are

spoken, from Acholi to Zulu, all linked (and this is key) by the global

lingua franca, English.

Workers in countries like Germany oppose an influx of cheap labor fromEurope's newly expanded east. Even in Britain fears over run-amok

immigration figure large in the current election campaign. The opposition

Conservative Party's manifesto, published just last week, calls for "secure

borders" and "controlled immigration." Tories say that means putting an

annual cap on immigration and establishing a points-based admissions

system--effectively screening undesirables. "It's not racist to want to limit

the numbers," says party leader Michael Howard, himself the son of

Jewish immigrants. "It is plain common sense."

But that ignores the secret of London's success. As Livingstone sees it, the

Tories' extremist right-wing politics threaten to undermine the very

essence of modern London--the engine that powers not only Britain's

prosperity, but much of Europe's. "The truth," he says, "is that immigration

is a way of life. Jewish, Irish, Asian, Caribbean, East European--each new

wave has enhanced London as a global city."

Past generations of megacities rose or fell depending on their access to



resources or trade--coal mines and rail hubs. What counts today is the new

global class of knowledge merchants, the folks with new ideas to share or

sell. "Urban economic success really depends on smart, entrepreneurial

people," explains Harvard professor Edward Glaeser. "Cities have recentlysucceeded because urban density can facilitate the transmission of ideas."

Like New York (and few, if any, other cities), London provides the right

environment for these people: a relatively compact layout, a vibrant mix of

cultures and a service industry fueled largely by immigrants. It is one

model for the 21st-century metropolis.

London's particular alchemy has little to do with deliberate policy. For

much of the 1980s and '90s, the city survived without any form of central planning. London has grown haphazardly by fits and starts shaped by

global trade and economic trends. Spasms of unplanned large-scale

immigration are thus as much a part of London's heritage as the double-

decker bus or the black cab. For hundreds of years the city thronged with

economic migrants or fugitives from religious persecution on the

Continent. In the 19th century its population leapt sixfold to 6 million,

including a flood of largely Jewish immigrants from Eastern Europe and

Russia. The post-war decades brought another mass influx from India andPakistan as well as the Caribbean.

Diversity is both symptom and cause of the supercharged London

economy. The city must attract immigrants to stoke that growth; the

immigrants want the jobs that a flourishing London can offer, whether

they're 1 million-pounds-a-year Japanese bankers or Polish art historians

ready to scrub floors for 7 pounds an hour. "This is where I can make

something of my life," says 32-year-old Carlos Cabral from Mozambique,now running a Portuguese deli. Without the migrants, London would be

shrinking, not booming.

That experience has helped to instill a basic tolerance. Londoners have

learned to live with--and sometimes relish--cultural differences. "What

makes us different is that we love diversity. We celebrate it," says Tony

Winterbottom of the London Development Agency. Londoners don't suffer

the overt racial tensions to be found in Los Angeles, Paris or Berlin.



Indeed, the potpourri of cultures is an attraction in itself for those fed up

with life in the suburbs, or in blander European cities. Urban centers have

shed some of their 1960s associations with crime and grime; today, they

offer what a new generation most prizes: high-end urban amenities, shorter commuting times, more work and more opportunities for play. London's

cosmopolitan feel is crucial to its prosperity.

The city has other advantages. Begin with the famous big bang of 1986,

the deregulatory splurge that opened up the city's fusty financial services

and let rip the forces of global capitalism. Foreign players, impressed by

London's light-handed approach to regulation, snapped up the grand old

names of British finance. The doomy predictions that Britain's decision tospurn the euro would cost London its position as Europe's financial capital

have proved plain wrong. Yes, Frankfurt is home to Europe's central bank,

but it's London that calls the shots. Mighty Deutsche Bank may be

headquartered in Germany, but its big decision makers are in London.

These days more euros are traded daily in London than in the rest of

Europe combined.

With the big players comes the chance to make big money; one more goodreason why London lures the brightest and best. Within a few years of the

big bang, London was fixed in the world's imagination as a place of

opportunity, where the elite can pick up eye-popping bonuses or seven-

figure salaries that can't be matched outside New York. "This is the only

place in Europe where you can make a 1 million pounds a year while

working for someone else," says Tony Travers of the London School of

Economics. Add tax rates that are indulgent by some West European

standards--and it's easy to see why the high-fliers would opt for Londonover Paris.

Regulation "lite" carries over to other spheres, from the arts or

entertainment. Not by coincidence, London is a center for both. Ask Jorg

Roth, a German TV producer who moved to London in 1999 to start his

own production and distribution company. "You can lay people off with

only seven days' notice in London when it takes three months in

Germany," says Roth, who employs a staff of 15 with freelancers from all



over the world. "I couldn't have done in Germany what I've done here in

the last five years."

Language clinches London's pre-eminence. Many newcomers choose thecity because they can use (or learn) English. A quarter of the world's

population is now fluent or at least competent in the language, and even a

shaky command opens up one level of the London job market. The city's

middle classes have come to depend on a ready supply of Australian

barmen, Hungarian nannies, Polish builders and Nigerian minicab drivers,

not to mention the Ukrainians or Romanians who clean their offices--or

quickly rise to employ those who do.

Can it last? To be sure, popularity has its price. Livingstone concedes that

daily life in his rainbow city can be "scratchy and difficult." London

motorists know to stay away from Trafalgar Square and other chokepoints

where traffic regularly slows to a Dickensian horse-and-carriage crawl.

Commuters endure daily frustration on a subway system starved of

investment for decades, and where key stretches of line are prone to shut

down with little notice. Violent crime is on the rise, the public-health

system is chronically overloaded and the middle classes shun the low-grade public schools. A rising number of exasperated families are

choosing to flee the city altogether.

And then there's the cost. Mercer Consulting last year ranked London as

the world's most expensive city after Tokyo, a jump of five places over its

2003 ranking. The 2.50 pound price of a pint of bitter in some London

pubs would shock a Czech beer swiller; the 2 pound charge for the shortest

ride on the London Underground would appall a Parisian. Even the

hardiest immigrants will take only so much discomfort. "I think people

should go to Birmingham or Manchester," says 22-year-old Michael, a

former political-science student newly arrived from Cracow, who's now

earning just 3 pounds an hour--below the official minimum wage--

delivering papers.

What's emerging, say the critics, is a divided London with almost 19th-

century extremes of wealth and poverty. "This may be the capital of the

world's fourth-largest economy, with thousands of homes worth more than



a million pounds, but it has some of the nation's greatest housing

inequality," says Adam Sampson of the housing charity Shelter, speaking

at a riverside property fair in East London. "Go just inland and you'll find

three generations of a single family crammed into a two-bedroom flat."

Maintaining the city's allure may therefore take more than the old hands-

off approach. Indeed, after years of squabbling with the mayor, a worried

national government has now lent its weight to the drive to build new

homes and to restore the transport system. A 10 billion pound overhaul for

the network is planned. Already, a congestion charge on motorists has

eased the worst of the traffic problems in the inner city. Police numbers

have risen steadily. Perhaps the biggest challenges of all involves resisting political pressures that might kill the golden goose--over-harsh anti-

immigration policies, to name but one, that would diminish London's

standing as Europe's only world city.

© 2013 The Newsweek/Daily Beast Company LLC

http://www.thedailybeast.com/newsweek/2005/04/25/special-report-london-calling.html

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