Letter from London

City spouses block Brexodus

One reason so few high-flyers have left the UK is because their partners enjoy the high life in London.

For City of London spouses, the prospect of Brexit is gloomy | Chris J Ratcliffe/AFP via Getty Images

LONDON — London may have an unexpected group to thank for preventing a Brexit exodus from the financial district — the well-heeled spouses of top bankers.

Before the Brexit vote, many bank CEOs, including Goldman Sachs’ Lloyd Blankfein and JPMorgan’s Jamie Dimon, warned that thousands of jobs might have to move if the U.K. were to leave the EU. Rivals like Frankfurt and Paris turned on the charm to attract as many Brexit finance refugees as possible.

Two years on, the bankers’ diaspora hasn’t (yet) happened and top executives have dialed back their rhetoric.

In an interview with POLITICO earlier this month, Blankfein said the U.K. economy remains surprisingly healthy despite the vote and Brexit will require “more distribution of [the bank’s staff] than otherwise we would have.”

Last week, Chancellor Philip Hammond claimed to have “dammed the flow” of jobs from the City, while Trade Secretary Liam Fox told a business forum this week that the U.K.’s “professional infrastructure in financial services cannot be replicated anywhere else in Europe.”

“No, I would not be willing to relocate to Germany, absolutely no way” — Tara, 30-year-old wife of a City trader

Although the Brexit negotiations in Brussels have yet to touch on financial services in any detail and huge uncertainty remains over the U.K.’s future relationship with the EU, the in-principle agreement on a 21-month transition period last month will have steadied some nerves in the City and Canary Wharf.

But if London is to retain most of its finance industry, it may depend on more than Hammond, Fox or the U.K. negotiators.

One reason for the banking Brexodus not materializing may be more prosaic: The “other halves” of the financial elite enjoy their London lifestyle too much to leave. This phenomenon suggests the capital’s pre-eminence (it was voted the world’s top global finance center last week in a survey of finance professionals) may be more resilient than its European rivals hope.

From the get-go, the City’s army of “yummy mummies” — there are yummy City daddies and partners too, but top jobs in banking are still dominated by men (who pay themselves significantly more than women in the sector) — have made it clear to their other halves they have no intention of moving.

Several City wives and one City husband who spoke with POLITICO (withholding their full names at the request, in some cases, of their partners’ employers) said they were simply not willing to give up London’s advantages because of Brexit.

One City wife who blogs under the pseudonym Notting Hill Yummy Mummy has taken the temperature of other spouses in a similar situation. “Dark, grey, cold Frankfurt is a bit of a nightmare … people that have a choice of any sort aren’t going to willingly move there,” she said, offering no verdict on London’s weather.

She cited the case of an American family that had been offered relocation to Europe from New York. After traveling to London and Frankfurt to check the comparative advantages, including schools and housing, they concluded the German financial capital was not for them. “They put together an Excel sheet with all the information they had collected and the two cities just couldn’t compare,” said Yummy Mummy.

One very senior banker in Canary Wharf said he took his wife and two daughters to check out Frankfurt — the leading candidate to rival London as Europe’s financial hub after Brexit — at the end of 2016. When they got back to London, his wife informed him that “there was no way in hell the family was moving.”

What, no Hurlingham?

As part of their contingency planning, a number of City firms organized trips for top executives and their families to scope out Frankfurt. The feedback: Real estate and schooling options are limited and the language barrier is discouraging.

It soon became obvious to employers there isn’t another London in Europe.

“No, I would not be willing to relocate to Germany, absolutely no way,” said Tara, the 30-year-old wife of a City trader.

“I don’t speak German and I couldn’t work in Frankfurt, plus there’s a quality-of-life factor: London is an interesting city, lots of stuff to do — Frankfurt isn’t” — Rebecca, banker’s spouse

The families in question felt suitably upmarket housing options were limited in Frankfurt; there were few sports clubs offering adult and children’s activities in English; and there were no private members’ clubs to compete with exclusive London haunts like the Hurlingham Club, the Arts Club and 5 Hertford Street.

Frankfurt’s international schools follow the International Baccalaureate rather than the English curriculum, making it difficult for bankers’ kids to pick up where they left off if they returned to London.

Meanwhile, London’s posh private schools are a major draw for bankers. Top primary schools like Kensington Prep, Falkner House, Glendower Preparatory and Wetherby — costing upwards of £20,000 a year — are the schools of choice. Securing a place is a major endeavor: Registration closes at least one year before the start of kindergarten, the yearly intake is about 20 percent of the demand, and if the child drops out, readmission a few years later is unlikely.

“I signed up my daughter for nursery before she was born; on the form I had to write ‘to be confirmed’ in the space where it asked for the child’s sex and date of birth. It’s just too important to improvise,” said Olivia, sipping a “liquid gold latte” — a concoction of turmeric, cinnamon, astragalus, honey and coconut milk — on a bright green velvet couch at Farmgirl, a café just off Fulham Road in southwest London.

Olivia, and many other banker families, use the services of consultancies offering expensive advice on where to send their kids to school. They are adamant that securing a place at the right school trumps a Brexit-related relocation.

Marina Fogle, an English socialite who runs an antenatal class in South Kensington and wife of TV personality Ben Fogle, said London was simply “unbeatable in terms of what it offers wealthy people.”

“When Brexit happened, a lot of my friends thought ‘OK, that’s it, we’re moving.’ And in the finance sector some people did, but by and large things seem to have worked out,” she said.

Frankfurt’s a bore

According to Notting Hill Yummy Mummy, locations like Barcelona and Paris would be more appealing socially, but the Catalan city doesn’t have enough top finance jobs and French taxes are a turnoff.

Another consideration is the spouses’ own jobs, which some would have to give up if they moved.

“I don’t speak German and I couldn’t work in Frankfurt, plus there’s a quality-of-life factor: London is an interesting city, lots of stuff to do — Frankfurt isn’t,” said Rebecca, who organizes fundraisers for charities and is married to an Italian banker.

A 52-year-old professor who teaches at one of London’s most prestigious universities, and is married to a senior female banker, said he would find it difficult to leave London.

“I wouldn’t have a problem moving per se, the challenge is finding a city that replicates London’s main qualities: good jobs, great schools, plenty of real estate options, unrivalled public transport,” he said.

Firms’ best bet, if a hard Brexit forces them to move staff, is to expand local offices and send some bankers back to their home countries, as Goldman Sachs’ Blankfein suggested.

“If we were ever given the option to go to Milan, it would be different, it would mean returning home and improving our lifestyle further,” Rebecca said. Meanwhile, London has become her family’s second home: They own a property there and her husband recently became a British citizen.

Whatever route the banks decide to take, they will not be able to dictate to their staff — and perhaps more importantly their families.

“Bankers are a bit like soccer players — they decide where they’ll play based on where their wives want to live,” said Rebecca.

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