Sorry, Remoaners, but London still beats Paris

The hysteria over the size of our respective stock markets ignores the real threat to the City’s power

The French have much to laugh about at the moment. Their football team will probably cruise past England with ease at the World Cup in the coming weeks. Their economy is growing faster than ours, with lower inflation. And if the Brexit-hating commentariat is to be believed, Paris is now a bigger financial centre than London. Or is it?

It is true that the Paris stock market has just overtaken London’s as Europe’s largest, at least by total value. But this measure is mostly nonsense, since the extra value largely comes down to the success of one exceptional company – Bernard Arnault’s luxury goods empire, LVMH – which has benefited in the short term from an absurdly strong dollar. Its singular performance does not speak for the rounded status of Paris as a financial centre. Indeed, on virtually every metric that matters, London is still well ahead of any European city.

Nevertheless, the Parisian smokescreen was enough to unite every hardcore Remoaner on social media in a moment of pure bliss. “The Luftwaffe set fire to the London Stock Exchange in 1940 and then blasted it with the shockwave of a supersonic missile in 1945 and still did less damage to it than we did,” tweeted the respected historian Dan Snow, who would probably benefit from some business lessons.

This was surely the moment the anti-brexit crowd had been waiting for years to arrive. They had been disappointed that, after all the Project Fear warnings of 2016-19, the City hadn’t in fact been devastated by our departure from the European Union, and we didn’t see the bankers, hedge fund managers and insurance brokers decamping for Paris, Frankfurt and Amsterdam.

Rather, we have seen them increase their presence here. So who can blame the poor EU fanatics for grasping at an iota of vindication? You could even say that President Macron showed admirable self-restraint in not tweeting out one of those laughing memes.

In all fairness to Mr Macron, the French stock market has been blessed with a great company, akin to the Apple of Europe. Bernard Arnault, as its head, briefly reclaimed his place as the world’s richest man last year before losing it again to Elon Musk. His brands, which include Moët & Chandon, Louis Vuitton and Dior, have been so successful that the company’s share price has doubled in five years.

Moreover, there is some symbolism, however empty, in London losing its historic position as the Continent’s largest stock market – the first time that has happened since it started crunching the numbers back in 2003 – and this should make us think again about our neglectful attitude to stock market listings. While Paris’s LVMH is worth €350billion (£305.5billion), overtaking the value of Meta (formerly Facebook), our biggest listed company is the oil and gas giant Shell, with a value of £165billion. And even though Shell got a slight boost from the rising oil price, it is hardly a growth business.

We could easily have made up for that, but instead chose to do nothing as some of our best new businesses, such as Cazoo and Soho House, listed their shares elsewhere. Soon even the giant chip-maker ARM, a strategic asset, could be allowed to list abroad.

It is despite all this, and thanks to London’s historic reserve of talent and capital, that it remains Europe’s pre-eminent hub for share dealing, currency trading, funds under management and almost any other metric. According to the Global Financial Centres Index, the City remains in second place behind New York (Paris ranks in 11th place in case you were wondering).

But we are about to let relatively benign complacency turn into failure. In the six years since Brexit, we have done nothing to make the City more attractive, preferring instead to impose crazy governance codes on entrepreneurs. We have worried more about diversity targets and green virtue-signalling than growth, while making the tax system as unattractive as possible.

So while it is a Remoaner feverdream to say that Paris is winning, we are facing credible threats from real competitors, whether New York, Singapore, Shanghai, or even Beijing. One day, if these hubs are allowed to nibble enough business from the Square Mile, the likes of Dan Snow might be able to gloat with some justification.