At London’s Globe Theatre, past is surely prologue.
The famous stage along the Thames, the third iteration of the thatched-roof arena since 1599, has endured the Plague, the great fire and the violent objections of the Puritans. Such perseverance wasn’t lost on Sadiq Khan, who launched his second term as London mayor there in May, along with a campaign to promote the arts, a pivotal cog in restarting the U.K. capital — the nation’s undisputed economic engine.
London accounted for almost 40% of the U.K.’s annual growth pre-pandemic, contributing twice the output of Scotland and Wales combined, so failure there portends a grim fate for the whole nation.
Without a thriving London, the overall economy could begin to resemble something like Italy, another faded imperial power struggling with debts that are too big, economic growth that’s too anemic and a vicious cycle that has it falling further behind its main competitors, according to the independent Resolution Foundation.
“Squandering the U.K.’s economic advantages, while failing to address its weaknesses — such as low productivity and high inequality — could see the U.K. end the 2020s with an economy looking more like Italy than Germany,” said Torsten Bell, the think tank’s chief executive officer.
It’s more than an economic challenge for Prime Minister Boris Johnson, who owes his 2019 landslide victory to the promise to “level up” the hinterlands to narrow the gap with London in the wake of Brexit. But overlooking the capital now would be like attempting to reboot the U.S. without New York and California.
“There can be no national recovery without a London recovery,” says Andrew Carter, CEO of the non-partisan research group the Centre for Cities.
London has suffered the biggest drop in salaried employees of all U.K. regions during the Covid slump, according to ONS data. When the government program that has subsidized jobs through the crisis ends in September, “there’s a lot of jobs that aren’t going to come back in London,” said Adrian Pabst, deputy director of the National Institute for Economic and Social Research. It expects unemployment in the capital to soar in 2022-23 to 7.9% from 4.5% before the pandemic.
There’s little cause for optimism in the crown jewel of the British economy. London’s financial services industry, all but left out of the Brexit trade deal, has seen hundreds of billions of dollars in assets and thousands of jobs shift to European hubs.
None of this is good news for the Globe, which lost 95% of its income during the pandemic, furloughed 250 staff at one point and made 20 more redundant.
Globe CEO Neil Constable expects the arts industry to be “first in and last out” of the recession, Britain’s worst in 300 years.
After a 429-day hiatus, the Globe has reopened for showings of “A Midsummer Night’s Dream” — albeit at quarter-capacity due to social-distancing restrictions — but finds itself in a fundamentally different economy.
Constable, already worried about another winter lockdown, doesn’t expect revenue to recover until at least 2024, with international tourists only trickling back.
That shows how Brexit has altered the landscape for an economy that thrives on foreign trade and workers.
The European students who accounted for 38% of the theater’s workshops pre-pandemic now need passports — not just identity cards — to visit. “The cost and hassle of obtaining a visa is now a serious competitive disadvantage,” said Josie Dent, managing economist at the Centre for Economics and Business Research.