The tech sector might be booming but Tory Brexit Britain is no success story

Ministers will doubtless rush to point to the figures released by the Mayor of London's promotion agency showing record investment but the fact is that they represent a rare positive in a sea of negative economic data

James Moore
Chief Business Commentator
Friday 05 January 2018 13:12 GMT
London's tech sector is booming, driven by its specialism in financial technology or fintech
London's tech sector is booming, driven by its specialism in financial technology or fintech (Hermione Hodgson)

In need of some good news? How about this: A record £3bn poured into to the UK’s tech sector last year, more than double the previous high. Woo hoo!

This despite Brexit. Double woo hoo! We might not be doomed after all!

I expect Downing Street’s spin doctors are already working on something like that. Well the woo hoo! part not the we might not be doomed part. Prime Minister, Prime Minister, you must work that into the next PMQs. Perhaps the whips can find us a tame lickspittle to raise it?

Ditto for the antediluvian Brexiteer ministers Theresa May kow tows to in Government, and for the lesser parliamentary question sessions that they face.

The data was provided by London & Partners, which is the Mayor of London’s promotional agency. That would be the Labour, Remain supporting London Mayor Sadiq Kahn. Something else the PM will probably point to.

London & Partners was no doubt keen to talk it up because, surprise, surprise, London snaffled 80 per cent of the money, which was put up by venture capital funders, with its financial technology or fintech specialism a particular strong point.

That’s an important point because, as a banker friend of mine pointed out to me, London is a global city that doesn’t have anything to prove to anybody.

It will likely remain so after Brexit. Smart entrepreneurs want to live there, and so do the smart people they employ on high salaries. Why wouldn’t they? It has everything they could possibly want on a plate and they can usually afford the high housing costs.

So of course it’s doing well with tech, and it will probably continue doing well with tech, and other things besides, even after taking into account the kicking that Brexiteers are dishing out to the City of London, which is shedding tens of thousands of jobs.

It will be interesting to see if it's still breaking records after doomsday, but money is always attracted by the potential to make more money and because London offers that it will still come in. As for the rest of the country? Well that’s a different story.

Despit its tech success London has the Brexit sniffles. The rest of the country is catching the 'flu.

What Downing Street won’t be so keen to make a fuss about is another economic indicator that appeared on the same day. The Society of Motor Manufacturers said new car sales were down by 5.7 per cent last year, the first fall in six years, with declining business and consumer confidence cited as reasons. No prizes for guess what caused both of those.

You can add that to the lengthening list of negative economic data that keeps coming out from both official and unofficial sources. The tech sector is a rare chink of light in a sea of darkness ushered in by that catastrophic referendum and the Government’s subsequent spectacular mishandling of the aftermath.

On its charge sheet are falling living standards, driven by high inflation, and low wage growth, the drying up of business investment and the slowest economic growth in the G7, a pack the UK was leading before ministers got to work.

Sure, Facebook is here, and Google is here, and there are loads of start ups in London, and a few more in other nearby hotspots such as Cambridge, and they're attracting investment.

But that should not deflect attention away from the fact that Theresa May’s Brexit Britain is anything but a success. Worryingly, we’ve only really just started to feel the negative impact from what she and her colleagues are doing.

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