In his magisterial account of 19th-century London, then as now a city of contradictions, Jerry White describes how Clerkenwell became "the greenhouse of invention". Hiram Maxim perfected his machine gun there; Sebastian de Ferranti his dynamos and Guglielmo Marconi his electric telegraph. Clerkenwell's people were cabinet makers, brass workers and glass shade and globe makers. Elsewhere in the city, new industries flourished, as did the docks and retail. Ladies shopped in "the emporium of the world!". "Made in London" was a badge of pride. Today, the fattest profits come not from the fruits of questing minds and hard graft but from the new gold, what American writerMichael Goldfarb, in a scathing essay in today's Observer, calls "the global reserve currency" that is property.

 

"The property market is no longer about people making long-term investment in owning their shelter," he writes, "but a place for the world's richest people to park their money at an annualised rate of return of around 10%." In 2012, an extraordinary £83 bn-worth of properties were purchased mortgage-free in London with no financing.

 

What attracts foreign (and domestic) millionaires and billionaires is not just the rate of return but the coalition's tax regime. Britain, for instance, has a base corporate tax rate of 23% (due to drop to 20% in 2015). In Germany, it is 29%. Again, while the majority of London's citizens rightly pay up to 40% or more of their incomes to maintain the hospitals, schools, roads and civic services of the city, the rich are taxed in small change.

 

The impact of London's property market becoming another global reserve currency where the super rich stash their billions and evade tax will soon be felt in the changing nature of the city's social and cultural ecology. What price to the capital if, increasingly, teachers, artists, students and civil servants can no longer live, work and contribute to an eclectic social mix?

 

The threat is not just cultural, but economic too. Already some senior business leaders have voiced fears that the capital is likely to lose out to cities such as Berlin in the race to become Europe's major digital hub since London is simply unaffordable for many young enterprising tech workers. Historically, the cultural industries have been major players in the British economy, but they also play a crucial role in helping create a flourishing, diverse city.

 

That is now under serious threat and there are few, if any, senior political leaders who seem to have an oversight of what is happening. The city needs a strong advocate, one who argues vociferously that the cities that work best are ones that work for everyone. London is no longer that type of city.

(The Guardian)