The Clustering of Financial Services in London*

you’ve got the nightmare of trying to get from Paddington to the City which can take
three times as long as getting from Heathrow to Paddington.

The poor state of the transport infrastructure is something which is perceived to create
a negative impression of the City for international clients.

International clients traveling to London are pretty shocked at times because the
infrastructure is so bad, lack of investment, how shabby it is, how poor the service is.

Considerable dismay was expressed by a number of respondents regarding the failure
to develop a coherent policy to improve public transport in London. Anger was expressed
by several at the attempts by the Mayor of London to cajole people into using cars less and
public transport more when the public transport system was already inadequate.
Furthermore, unfavorable comparisons were made between the public transport system in
London and the systems in Paris and Frankfurt. Only Tokyo received a mention as being
worse than London. One respondent who had worked 35 years in the City judged the
decline in the standard of public transport over that period to have been “enormous”.
Another stated that he had abandoned the District Line after 30 years in favor of his car
because of a continual decline in standards. A number of respondents made the point that
they had to be located in the cluster and were therefore forced to put up with declining
transport conditions but that others may have a choice. One banking respondent said that
until the firm’s confidence in transport infrastructure increased, no new business activities
were being brought to London. The view of an auxiliary financial services respondent
summarized a common perspective,

What you’ve got to avoid if you’ve got a city and you’re trying to protect your
franchise is you’ve got to avoid the feeling that if you don’t have to come into London,
why bother.

While transport was singled out as a key problem by almost all respondents, many also
commented on regulation and legislation as being an even more serious potential threat to
the London financial services cluster. A principal concern related to European legislation
which, crudely stated, was seen as likely to lead to a leveling down of London particularly
in relation to the erosion of flexibility, damaging the ability of firms in London to “get the
job done”. One respondent referred to the threat as, “death by a thousand cuts”. Shedding

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