The Clustering of Financial Services in London*



The inadequacies of the transport system was born out by the interview survey, with
almost every respondent mentioning it and a number wanting to dwell on this single issue.
While the cost of office premises was considered a disadvantage, it was not prioritized as a
threat to the cluster. Transport however was widely seen as “a massive all-encompassing
problem”. This respondent’s comment illustrates the strength of feeling expressed by many
on this subject:

Public transport is the end. The dispute between the DLR [Docklands Light Railway]
and the Jubilee Line for example. Technology is a mess in and out of London - it’s
disgusting, unreliable and uncomfortable. I hate traveling in and out - the bit here to
Tower Bridge is the worst - the City is seized up. We’ve worked very hard to make
things happen. France, Germany and Spain have much better transport ... The
problem is there’s no consistency in policy, someone needs to be responsible.

There is a crucial issue regarding the ability to cross London especially for business
trips. Some respondents pointed to the example of the investment bank Lazards moving to
the West End, where most of its major corporate clients are, to avoid the inconvenience of
traveling between the City and the West End for meetings. Conversely, one respondent in a
fringe location spoke of the intention to move to an office in the City in order to overcome
the difficulty of traveling to clients there.

In terms of travel to work patterns, being located to any degree North, South, East or
West of the center was perceived to limit the geographic scope of where staff would travel
from. To some extent this was more limiting at lower levels in the organization as the
senior staff had the wherewithal to pick a more favorable residential area with a view to
travel to work. Many respondents expressed their concern about the impact of vexing and
lengthy commutes on their staff, sapping energy and enthusiasm. In addition to over-
crowding and unreliability there were adverse comments on the sheer shabbiness of the
underground, and concern was expressed regarding the safety of the electrical installations.
As the following quotations illustrate, while the cost of housing in London was not seen as
a key issue threatening the cluster, transportation difficulties were.

I don’t think [London housing] costs are higher. Actually the costs are less. Our costs
of people living in Singapore or Hong Kong, even Moscow, are just as high as in
London. They’re less in Germany, slightly less in Paris. They’re certainly less in
Amsterdam but I wouldn’t have said that is a factor at all.

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