London could become ‘the Hong Kong of Europe’ by attracting trade and business from the Far East once the UK leaves the European Union, Prime Central London property expert Jeremy McGivern has predicted.
McGivern reckoned businesses could flock to the city to take advantage of lower corporation tax rates, while he speculated whether China’s currency, the renminbi, could be traded in the English capital to help the Chinese make it a reserve currency.
The UK will cut corporation tax to 17% by 2020 and in June 2016 previous Chancellor George Osborne pledged to bring it as low as 15%.
McGivern, who is founder of search agency Mercury Homesearch, was speaking at Investec Private Banking’s broker event last week.
He said: “We will have the second lowest level of corporation tax in Europe – it could go down as low as 10%.
“We could become the Hong Kong of Europe.
“It’s cheaper to employ people in the UK because labour laws are far more favourable for employers and sterling means that it’s much better to employ people here than in Europe or America.”
McGivern told brokers that leaving the European Union will provide huge opportunities and doesn’t have to make the UK or Europe suffer.
He added: “If we lose passporting rights will every banker leave London? Is the city going to empty completely? Unlikely.
“Is it possible we might be able to strike more attractive trade deals with the likes of China, Singapore, India and Indonesia? They are demographic powerhouses that are generating serious wealth while I’m afraid Western Europe is dying demographically and industrially.
“Would this attract more bankers to London? It’s well known that China wants the renminbi to become the reserve currency of the world but to do so it’s got to be tradable outside of China.
“Will they move the centre of Chinese renminbi trading to New York? Unlikely; it’s the home of the dollar. Frankfurt? Unlikely; it’s the home of the euro.
“Might it just come to London; the financial exchange centre of the world?”
Chinese investment is already coming to the UK.
The newly-approved nuclear power station at Hinkley Point in Somerset is part financed by the state-owned China General Nuclear Power Group (CGN).
Meanwhile Chinese real estate developer Greenland Holdings is developing the largest residential building in Europe near Canary Wharf called Spire London, at a cost of £800m and with a completion target of 2020.
McGivern reckoned the English language is a trump card for the UK compared to the rest of Europe.
He said: “Malaysians and Singaporeans don’t want to educate their children in France and Germany; they want to educate them in the UK because of the English language.
“How do they view Europe and the UK? We’re safer. Paris, Germany, Spain or here? They want to be here.”
He added: “All these things can happen. Will they happen? Frankly I haven’t got a clue but nor does anybody else.”