Issues facing global economy; Stephen King, Managing Director of Economics at HSBC, (Pictured right) devotes his column in the Independent to examining the global economy in the coming year. He lists three big issues, starting with China and India. Despite the US and the Eurozone delivering growth rates in line with expectations in 2005 China and India offered the big shocks with growth rates 1 per cent higher than expected. This kept the demand for raw materials buoyant and raised their share of global trade. In 1990 the G7 nations accounted for 70 per cent of global GDP - today it is 62 per cent. This, in turn, relates to the second issue with US short-term interest rates likely to move above the long-term interest rate and thus threatening to invert the US yield curve. King says that this has sometimes, but not always, signalled the onset of recession. The third issue is the UK’s productivity rate, which seems to be steadily declining which is hardly encouraging for the longer-term health of the UK economy. He says that the success of the government’s demand-side strategy - independence for the Bank of England, price stability and the avoidance of recession- has masked the slowdown in productivity to a mere 1.3 per cent a year over the past four years. In recent years the Polish plumber has kept the UK GDP expanding at a reasonable rate and it may be that the Bank of England may be alone in cutting interest rates in 2005 but productivity performance is the true elixir of economic success. Independent 03.01.06
Top City economists predict rate cut; an Evening Standard survey of the top 15 economic analysts in the City shows that 10 believe that interest rates will be cut this year to ensure that inflation does not undershoot its 2 per cent target. Of the ten, seven believe that the first cut could come in February whilst the other three say it will not come until well into the year. However, the dissenting five think that rates have troughed and will either stay on hold throughout 2006 or start climbing again. Evening Standard 29.12.05
2006 could turn out better than expected; Ashley Seagar, the economics correspondent of the Guardian, surveys the economic prospects for 2006 and predicts that they may be better than many of the pundits are forecasting. He says that in terms of the economy 2005 is best forgotten - growth at 1.75 per cent was the lowest since the recession of the early 90s, unemployment started rising after years of decline, manufacturing is back in the doldrums and China overtook the UK to become the world’s fourth largest economy after the USA, Japan and Germany. However, house prices did not produce the expected slump (see below), consumer spending seems to have past the worst and whilst the labour market at first glance doesn’t look great employment hit a record high and economic inactivity is falling. The rise in employment is probably explained by immigrants arriving and getting jobs as well as a 10 per cent rise in pensioners getting jobs over the past year. However youth unemployment is rising. There could be an unforeseen rise in oil prices and the boost given to the economy by the rise in spending on health and education is coming to an end. On the bright side there could be a fall in the value of the pound and the IMF has praised the “remarkable” stability of the British economy. For further information click here. Mission Guardian 28.12.05
Bosses predict the most difficult 12 months since early Nineties; a MORI survey of more than 1,000 FTSE top executives has found that two thirds expect the economy to worsen in 2006, while one on four believe it will improve. However, they are more optimistic about their own company’s chances with more than half - 57 per cent - forecasting that their business would improve. Despite the Chancellor’s promise of a recovery in Britain’s fortunes few business leaders have confidence in his optimistic projections. There is also a lack of confidence in the government as a whole with two in three correspondents rejecting the notion that ‘in the long term, this government’s policies will improve the state of Britain’s economy. For further information click here.Observer 01.01.06
Forecast
of modest rise in house prices; the latest monthly survey from Hometrack
says that house prices will rise modestly in 2006- as long as sellers are
realistic about how much their homes can command. The survey shows that prices
rose fractionally in December; the first increase for 18 months. Hometrack
forecast that overall prices will have dropped by 1.6 per cent during 2005
and will rise by just over 1 per cent in 2006. Sellers were achieving 93.5
per cent of their asking price and it was taking eight weeks onaverage to
sell a property- almost double the time during the summer of 2004 when the
market was booming.
For further information click
here.Guardian 28.12.05
Enterprise schemes producing ‘lacklustre’ results; a report from the Institute for Public Policy Research (IPPR) says that the government schemes to stimulate enterprise in deprived areas have only produced “lacklustre” results and that the organisations that aim to help business succeed are “complex and confused”. The IPPR report says that progress on increasing economic activity in the poorest areas of England was not as good as it should be. It calls on ministers to re-examine enterprise policy in time for the February launch of the new Local Enterprise Growth Initiative. It also questions the effectiveness of the schemes that offer tax breaks and the marketing of the enterprise zones. It says a survey of local businesses in deprived areas of Derby, Doncaster and Sunderland showed that more than half did not know they were in an enterprise zone and only 2 per cent had used the schemes. It also showed that most had not used Business Link, although those that had reported a positive experience and that the service was “relatively limited and hampered by bureaucracy and red tape”. For further information click here.Financial Times 22.12.05
Bankruptcies to rise in 2006; the number of businesses going bankrupt will rise in 2006 and fall back again in 2007 according to a study by BDO Stoy Hayward. The study suggests that 17,303 businesses went bankrupt in 2005- a 9 per cent increase over 2004. With the housing surge petering out and consumer spending and economic growth slowing, retailers were the worst hit with business failures rising by 25 per cent to 1,242. BDO Stoy Hayward predict a 4 per cent rise in bankruptcies in 2006 as the full effects of the slowdown are felt, followed by a fall back to lower levels in 2007 as economic growth improves. For further information click here. Financial Times 19.12.05
‘We
may not love the CBI, but we need it’; Patrick Hosking, writing
the Business Commentary in the Times, responds to the attacks on the Confederation
of British Industry (CBI) made by playwright David Hare in the New Statesman
and George Monbiot on the Radio 4 Today programme. David Hare singles out
Sir Digby Jones, the CBI Director General, who he deems “the whingeing
capitalist- the man at the head of a fabulously rich organisation who is forever
complaining that the world is doing him down…” Monbiot marvels
at what he sees as the overweening influence of the CBI arguing that it is
the only special interest group that ministers “grovelled to”.
Hosking says that it is right and proper that journalists report the CBI viewpoint
on everything from the congestion charge to educational standards. Gone are
the days when the business community was seen as a monster and the only business
stories worth reporting were about consumers being ripped off or employees
being ground down. Businesses were now recognised as job creators, taxpayers,
innovators, pension providers and major sponsors of sport and the arts, including
playwrights such as Sir David. However, the CBI did need to acknowledge the
failings of business occasionally and to accept that business has to pay its
fair share of taxes. George Monbiot has scored some hits in his critique not
least the CBI’s decision to blame everyone but bosses for the pensions’
crisis. Anyone can see that the decision to take pension contribution holidays
year after year was a mistake that exacerbated the deficits we see today.
Hosking concludes that the CBI needs a bit more self-criticism and a bit more
willingness to yield to the arguments of others- otherwise expect more of
an anti-CBI backlash in 2006. For further information click
here. Times 30.12.05
Business bodies ask for time on red tape ideas; the main business organisations have defended the lack of ideas for cutting red tape that have been submitted to government. So far only 150 ideas have been sent in, 70 of them through the www.betterregulation.gov.uk website set up by the government in September. The CBI said that it was early days and it was “actively encouraging” its members to put ideas forward through the website. The British Chambers of Commerce said that it had made a “big push chambers to come with ideas” and would be collating them in the New Year. The BCC said that one of the reasons that the process was so slow was that “Part of the problem is that some of the small companies feel so swamped with regulation, they don’t have time to submit suggestions”. The government said that it was not disappointed by business’s response to the deregulation drive and Jim Murphy, Cabinet Office Minister, said that he was “tremendously encouraged”. Financial Times 28.12.05
CBI warns that companies could move from UK; Sir Digby Jones, Director General of the CBI, (Pictured right) has warned that mounting unease about tax policy could encourage some companies to leave the UK. An article in the FT says that “this kind of talk is usually dismissed as an empty threat. In 2000, for instance, a proposal to tighten tax rules on international companies provoked similar warnings. However some multinationals think it is different this time around. Chris Spooner, head of financial planning and tax at HSBC Holdings, says: “We could be at a tipping point here for international companies”. HSBC weigh up the alternative locations for the holding company and Spooner says that at the time of the last review in the late 1990s, it was clear that the UK was the most favourable place to be. However, since then other countries have become more competitive and like other tax experts he highlights the Netherlands. Future worries include the government’s dependence on business tax revenues and the consequences for constant changes to curb tax avoidance, the consequences of the cases currently at the European Court of Justice and the increase in mergers and acquisitions that create the opportunity for re-location. On the plus side Ernst & Young point out that the UK accounted for 46 per cent of all headquarters projects in Europe in the first three quarters of 2005. For further information click here. Financial Times 23.12.05
Nine
WiFi hotspots announced; three London boroughs are amongst nine cities
that have been chosen to pioneer a nationwide WiFi network, which will utilise
street furniture such as lampposts and street signs. The first nine networks,
which should be in place by March next year, are Edinburgh, Leeds, Manchester,
Birmingham, Nottingham, Oxford, Cambridge, Liverpool and the three London
boroughs of Kensington & Chelsea, Camden and Islington. Similar schemes
have been started in Philadelphia and San Francisco but unlike the US where
they have been set up by public bodies the UK scheme has been put together
by a firm called The Cloud, a London-based private equity-backed WiFi firm.
Other centres will be announced later in the year. The Cloud recently set
up a network in Canary Wharf and also has sites at the British Library, the
South Bank Centre and branches of Coffee Republic andYoungs. The City of London
is also planning a scheme of its own. For further information click
here. Times 03.01.06
COMMUNITY AND BUSINESS AFFAIRS
Cameron
says he will stand up to big business; the Conservatives have taken
newspaper advertisements in which David Cameron (Pictured right),
their new leader, has promised that he will “not just stand up for big
business but stand up to big business when it’s in the interests of
Britain and the world”. This led to what the FT calls “a shot
across the bows” from Irwin Steltzer, a key adviser to Rupert Murdoch,
who suggested that Mr Cameron’s niceness and relative youth were not
enough and that he should avoid adding to the costs of doing business. The
remarks came at a time of growing tension between big business and the Labour
Government and businesses had been hoping that tax and regulation would be
prime targets for any party seeking to offer a distinctive alternative to
Labour. The FT says that Mr Cameron’s decision instead to criticise
big business has created concern. If his sentiments turn into policy this
could turn into more serious friction.
Financial Times 05.01.06
Review of business policy will examine social responsibility; Alan Duncan (Pictured right), the new Shadow Secretary of State for Trade and Industry, has said that the party’s review of business policy will look at how companies could be more socially responsible. “In terms of big companies, you’re looking at lots of environmental issues, waste, and also at distribution. Is this environmentally costly and the right thing to do? We’re all in this together”. He denied suggestions that this would lead to higher environmental taxes on companies. At the same time officials close to Mr Cameron, reacting to criticism from business lobbies, including Irwin Steltzer (see above), said that they were responding to research that shows the Conservatives being seen by voters as too close to large corporations. Financial Times 05.01.06
Population in the North is on the increase; the Office for National Statistics reports that the historic population drift from the north to the south has been reversed for the first time in 70 years. After decades of falls the population living in the areas outside the South grew by a few thousand in 2001, by more than 20,000 in 2002, and by 35,000 in 2003. In particular, the North West, Yorkshire and Wales have seen their population grow between 2000 and 2003. Although the population of major cities such as Birmingham and Liverpool continues to decline, the falls are more than offset by the population growth in such areas as Lincolnshire, the North Lancashire coast, the rural Pennines and East and West Yorkshire. For further information click here. Independent 16.12.05
More
pressure on the RDAs; Norman Lamb MP (Pictured left), the
Lib Dem spokesman on trade and industry, is pressing for an investigation
into the spending on overseas offices by the regional development agencies.
He says that the nine English RDAs spend £5.5m a year on overseas offices
but that there is a big discrepancy between the amount of staffing that each
one has overseas. One North East RDA has nearly 11 dedicated staff overseas
and access to 21 through sharing arrangements with other agencies. It spends
£890,000 a year on overseas staffing. The London Development Agency
and the East of England RDA have no overseas officials. The £5.5m costs
do not include spending by the Department of Trade and Industry’s UK
Trade and Investment- the Government body responsible for promoting trade
and inward investment.
Times 19.12.05
Creative talent is being ‘squeezed’ out of New York; a report by the Centre for an Urban Future, a think-tank dedicated to planning New York’s future, says that “creative” talent is being driven out of the city by the “uncreative”. It quotes advertising and publishing as two industries that are shrinking in the face of the high costs of workspace, a general lack of business skills among individual creative entrepreneurs, barriers to reaching appropriate markets and the impact of changing technology. The report compares the situation with that of London where a single strategic body, Creative London, has been formed to overcome the traditional fragmentation of the field and to devise common strategies for investment in the creative sector. For further information click here. Times 20.12.05
Dispersal policy is creating refugee ghettoes; a Home Office report says that asylum-seeker ghettoes are developing in deprived areas as a result of the policy to disperse refugees around the UK. Hundreds of people seeking asylum are being housed where they are more likely to face racial assault and harassment. The policy for dispersal was introduced to relieve pressure on London and the South East. Among the deprived areas where they have been housed is the Sighthill council estate in Glasgow where asylum-seekers represent almost half of the estate’s population. Other areas with a high rate of dispersed asylum-seekers are deprived parts of Birmingham, Doncaster, Leeds, Bradford, Newcastle, Nottingham and Manchester. The report says that while the policy may be suitable in the short-term, there are questions about the long-term impacts on social cohesion, especially from linguistic clustering which can contribute to an emerging ghetto. Further information click here. Times 23.12.05
Suspicion
of new housing threatens Thames Gateway; a report by the Institute
for Public Policy Research (IPPR) says that it could prove difficult to persuade
people to move to the priority housing development areas in the Thames Gateway.
It says that there is widespread suspicion about the quality of the new housing
in designated areas which stretch from east London to the Essex coast and
could see as
many as 250,000 new homes over the next few years. For further information
click
here. Financial Times 04.01.06
Youth unemployment back to 1998 level; data from the Office for National Statistics show that a 60 per cent increase in long-term youth unemployment has returned it to the level it was at when the government launched the New Deal in 1998. Long-term youth unemployment fell sharply from the middle of the 1990s dipping from 187,000 in May 1997 to 146,000 a year later when New Deal was launched. It fell to below 100,000 in 2002 but has now increased to 147,000. A spokeswoman for the Department of Work and Pensions said that the figures “do not give us cause for concern” but did concede, “the increase is surprisingly large and we need to look over a longer time frame and ask ONS whether this month’s figures could be erratic”. An article by the FT Statistics Editor suggests that ministers may have been exaggerating the job creation impact of New Deal particularly by presenting the claimant count as if were an official measure of unemployment. He says the claimant count figures are far less reliable than the labour force survey. For further information click here. Financial Times 15.12.05
Employer
Training Scheme has ‘little impact’; a report on the
pilot areas for the Employer Training Scheme, designed to improve adult skills,
has had only minimal impact in its first year. The report, which was compiled
by the Institute for Fiscal Studies for the Department for Education and Skills,
reports that the employer training scheme, which is to be extended nationally
this year under the brand Train to Gain, had increased the volume of training
by only half a percentage point in pilot areas. It says that one of the reasons
might be that subsidised training was taken up first by companies that were
already providing or considering similar schemes themselves. The DfES said
that the scheme, which subsidises GCSE or basic skills courses for poorly-qualified
workers, has grown in the past four years and was used by a quarter of employers
in some areas. For further information click
here.
Financial Times 05.01.06
Incapacity benefits to depend on attempts to work; an article by John Hutton, the Work and Pensions Secretary, in the January issue of Progress magazine seems to give a number of clues about the content of the impending Green Paper on welfare reform to be launched at the end of January. It says that the Government will introduce a “something-for-something” approach by providing more generous benefits and support in return for a new obligation on people to try to work again. The aim will be to take at least one million off the incapacity benefit, and cut the £12billion annual cost. At the same time there will be a shake-up of the benefits structure to remove the inbuilt disincentives for people to return to work and, in another move that will alarm some Labour MPs, fresh moves designed to persuade lone parents to move into work. In the meantime John Hutton has written to the MPs- almost all Labour- representing the 100 areas with the highest numbers of incapacity benefit claimants. He points out the links between dependency on handouts with deprivation. For further information click here. Independent, Times 27.12.05, Evening Standard 03.01.06
Clearing house mooted for apprenticeships? A database to
match would-be apprentices to vacancies is being devised as part of the drive
to increase the number of young people doing vocational training while they
earn. Last year the Learning and Skills Council (LSC) announced that although
175,000 young people had started apprenticeships with 130,000 employers, more
than 200,000 applications had been received. This led to an advisory committee
telling ministers that they should develop a “clearing house”
which in turn led to Phil Hope, the Minister for Skills, promising such a
scheme for next year. Norman Lamb, the Lib Dem spokesman on trade and industry,
has written to Mr Hope suggesting a computer-based clearing house on the same
lines as the universities. However, the LSC are doubtful about a national
system and prefer to look at local and regional schemes. Mr Lamb has responded
by suggesting a centralised clearing house on the same lines as UCAS where
candidates and employers can be effectively matched against the opportunities.
UCAS have indicated their interest in helping to develop such a scheme.
Financial Times 27.12.05
‘2006 may not be a good year for job seekers’; job seekers can expect a weaker labour market in 2006 according to John Philpot, Chief Economist at the Chartered Institute of Personnel and Development. In his annual report on the labour market Philpot says that rising employment and lower economic growth resulted in 2005 being “one of the worst years for productivity growth since 1990”. This means that despite the stronger growth expected in 2006 employers will look to cut costs through slower recruitment, more redundancies or further attempts to raise productivity. Further information click here. Financial Times 28.12.05
CBI withdraws support for parental leave; the CBI has withdrawn its support for the government’s flagship policy of increasing parental leave for employees. The move is in protest at the Chancellor’s withdrawal of a proposal to lift the regulatory burden on businesses. In a letter to Alan Johnson, Secretary of State for Trade and Industry, Sir Digby Jones, the Director General of the CBI, warns, “Given that the burdens on employers will not now be adequately compensated through additional support, I regret the CBI can no longer support your proposals to extend family-friendly employment legislation”. Financial Times 23.12.05
Government
takes steps to rescue private childcare; the Times reports that the
Government is intervening to subsidise privately run childcare nurseries in
an attempt to drive up standards. Ministers have been forced to act after
a series of damning reports into private nurseries and crèches used
by 630,000 children. Official inspections revealed lack of staff, poor security
and dirty premises faced by parents paying up to £200 a week for nursery
places. Just one in ten staff has a degree despite research that shows children
do far better at nursery if the staff includes a qualified graduate teacher.
Beverley Hughes, the children’s minister, has been given a £125m
transformation fund, which will enable her to subsidise both voluntary and
private sector nurseries to employ graduates. The fund has a two-year life.
Times 30.12.05
Fees are putting off poorer students; a
survey of schools and college career advisers shows that the advisers are
predicting that there will be a drop in applications for university places
ahead of the introduction of the £3,000 tuition fees. The scheme will
damage the government’s attempts to attract more students from deprived
backgrounds according to three–quarters of the advisers. The survey
was undertaken by the university marketing agency Heist and comes ahead of
this week’s deadline for university applications, when the final figures
will be published. This follows a forecast carried in the Sunday Times that
black students are failing to get their share of places at Britain’s
top universities in the Russell Group. It says that there are more Black Caribbean
students at London
Metropolitan University than in the entire Russell Group.
Sunday Times 01.01.06, Guardian 04.01.06
Renewables key to nuclear future; an article by Michael White, the Guardian’s political editor, says that the government is being advised by outside experts that the only way to win public support for a new civil nuclear power programme is to produce a formula that embraces a strong future for renewable energy. The article is produced on the same day that a Guardian/ICM poll shows that almost half of voters are opposed to a renewed commitment to nuclear energy. A critical part of any formula to be produced by the energy review being chaired by Malcolm Wicks, the energy minister could be to link nuclear and the green alternatives of renewable energy sources, wind and wave power. Brian Wilson, a former Labour energy minister, advocates that the “renewable obligation” certificates which require the industry to ensure that 10 per cent of new energy comes from renewables by 2010 and 15 per cent by 2015 should be extended to 2030 with cross-party support. Guardian 27.12.05
Europeans missing Kyoto targets; Britain and Sweden are the only European countries honouring their Kyoto commitments to cut greenhouse gases according to a new report published by the Institute for Public Policy Research (IPPR). The report says that although the US is portrayed as the ecological villain 10 of the 15 European signatories, including Ireland, Italy and Spain, will miss their targets without urgent action. France, Germany and Greece have adopted policies that could be successful. However recent figures have shown that carbon dioxide emissions are increasing in 13 out of the 15 countries, including Britain. For further information click here. Independent 27.12.05
Tories may drop opposition to climate change levy; as part of a drive to re-brand the Conservative Party as a party that cares about the environment David Cameron is reconsidering their opposition to the climate change levy. In a move, that is likely to annoy the leading business groups, he announced the setting up of an 18-month Quality of Life policy group to be led by John Gummer MP and Zac Goldsmith. Cameron said that he wanted to take climate change out of politics. Guardian 09.12.05
‘Gavron is one of 20 most important people on carbon emissions’; Business Week has named Ken Livingstone and Nikki Gavron amongst the 20 most important people in the world in the battle against CO² emissions. The fact that both the mayor and deputy mayor were listed was, according to the magazine, because, “They aim to turn London into a model of a sustainable future for all the world’s great cities”. Since the publication of the 2004 London Plan renewable energy technologies must be incorporated into all new developments where possible. At present this only applies to those large developments referred to the mayor’s office but the scope may be widened under the review of the mayor’s powers, which is currently taking place. The Guardian says there is a rumour that the requirement that 10 per cent of a development’s energy needs must be met by onsite renewable energy sources is likely to be doubled. It is also planned that the Climate Change Agency, set up by Livingstone and Gavron in June 2004, will shortly join forces with a private sector partner to go into the utilities business, providing London’s heat, power and cooling based on low-carbon decentralised energy, operating largely independent of the National Grid. From 2008 they intend to penalise lorries and coaches if they are not fitted with the latest standard in particulates filters. Guardian 04.01.06
Mayor
plans healthier London; Ken Livingstone has announced that he plans
a greener and healthier capital by imposing prohibitively high charges on
polluting lorries and improving access to more local and organic food. He
told a Soil Association conference, “The energy and emissions involved
in producing food account for 22 per cent of the UK’s greenhouse gas
emissions”. In addition to the charges for polluting lorries he plans
to encourage schools and hospitals to buy more local and organic food and
to use planning policies to end food deserts in poor areas such as Hackney.
For further information click
here. Guardian 07.01.06
Objections threaten to derail Crossrail; as the decision to grant a further £100m to Crossrail for preparatory works is discussed by MPs the Evening Standard starts to despair of the situation. This new grant would take the cost of planning Crossrail to over £500m and the Mayor says that he expects a further £100m to follow shortly. Meanwhile businesses and residents have lodged 358 objections. Many support the scheme but have fears over either the compulsory purchase of the land or the impact of the seven-year construction timetable. Others like BAA have concerns that Crossrail would have precedence over the Heathrow Express. A Crossrail spokesman said that, in fact, the number of petitions was “particularly low” and less than half of those received by the Channel rail link. Evening Standard 28.12.05
London hospitals in trouble; following the collapse of the Paddington Health Campus PFI scheme officials at the Department of Health are now challenging the costs of the biggest PFI hospital- the £1.1bn rebuilding of St Bartholomew’s and Royal London hospitals. The Department has challenged the project’s affordability and suggested that the Bart’s part of the 1,250-bed scheme should be reconsidered- once more raising the question of whether England’s oldest hospital, founded in 1123, should close. The FT says that the problem is partly due to government’s new “payment by results” system where hospitals are only paid for the work they do and for the patients that choose to go to them, not through block contracts. Another problem is with new technology making it possible to treat patients outside hospital, often at lower cost. These problems follow on the news that the Queen Elizabeth Hospital in Woolwich has plunged £29m into the red because of a fixed cost PFI deal, and the problems faced by the new UCL hospital at the top of Tottenham Court Road. Financial Times 29.12.05
Tube consortia fights back; the Chief Executive of one of the two consortia upgrading London Underground under the PPP scheme has warned that changes to the contract could imperil private sector funding. In comments to the FT, Terry Morgan, Chief Executive of Tubelines, which is improving infrastructure and trains on the Northern, Jubilee and Piccadilly lines, implies that the backers of PPP could either withdraw or seek compensation if Ken Livingstone tries to take over more control over the way the work is done. Bob Kiley, the outgoing chairman of London Transport, called for an end to output-based contracts and for TfL, rather than the contractors, to determine work schedules. However Tubelines, which is jointly owned by Amey and Bechtel, points out that over the Christmas period it had completed the work to introduce a new seventh car on the Jubilee line on time. It had also reduced the time to refurbish an escalator from 26 weeks to less than 10 and transformed the reliability of the Piccadilly line trains by stopping repairing flawed equipment and replacing parts, which had, in turn, boosted train reliability by 120 per cent. It had also laid 1km of track over a weekend closure whereas London Underground typically used to manage only 300m. Financial Times 29.12.05
Mayor calls for North-South tram route; Ken Livingstone has threatened to block a £2bn regeneration scheme at King’s Cross, unless it allows for a tram terminal. The King’s Cross Central scheme is being submitted for planning permission to Camden Council this month by Argent, who claim that they have offered three options for a tram in their proposals. Livingstone argues that all the councils involved support the concept of the Cross River tram to link King’s Cross, St Pancras and Euston in the north to Waterloo and then on separate branches to Brixton and Peckham. The tram is seen as helping to deal with the extra 60million passengers a year expected to go through King’s Cross by 2020, to help regenerate parts of South London as well as helping to address some of Camden’s housing problems. Evening Standard 22.12.05
Young’s consider outsourcing brewing; Young’s, the London brewer, are to consider outsourcing brewing, as one of the options stemming from its decision to investigate the development of its Ram Brewery in Wandsworth. When the decision was first announced Young’s said that it would use the proceeds to build a new brewery elsewhere in Wandsworth or failing that within the M25. Whilst there would be an outcry from real ale enthusiasts it is pointed out that InBev, the Belgian brewing conglomerate, recently outsourced the production of Bass Ale to Wolverhampton and Dudley Breweries with great success. Multiplex is considered to be the favourite to win the Ram site at a cost of around £100m. Times 27.12.05
Why London is the hairdressing capital of the world; the FT looks at the recent spate of London-based trade events that have confirmed its increasingly important position as the industry’s global capital. It quotes Trevor Sorbie as saying that London’s cultural legacy has been the key factor with Vidal Sassoon seen as part of the design wave of the singing sixties alongside the Beatles and David Bailey and so on. “However, unlike in fashion where UK talent such as John Galliano, Stella McCartney and Alexander McQueen have left for Paris and New York, we have the industrial framework to support it”. Gary Kelly, editor-in-chief of the UK edition of Estetica, the hair industry magazine, says, “The UK is definitely looked upon as a hotbed for creativity in hair design. It is not just for the trade events, people flock from all over the world to the UK academies such as Vidal Sassoon, Sachs and Toni & Guy”. Another reason is the lucrative businesses that Britain’s big-name salons have spawned in the retail market selling hair care products endorsed by top hairdressers and stylists. Boots estimate that this market has risen from 2.9 per cent of the UK hair care market in 1994 to 12.4 per cent today. Financial Times 30.12.05
Saville Row under threat; the FT looks at the changing nature of Saville Row where it says rising rents, smaller premises and an influx of plush stores and offices are forcing the bespoke tailors out of one of London’s most celebrated streets. Financial Times 13.12.05
Telegraph moves to Victoria; the Telegraph Group, which publishes both the Daily and Sunday Telegraphs, is to leave Canary Wharf to move to Victoria. It will take up space in Victoria Plaza later this year. Independent 22.12.05
Business
Summit to be held on January 24; Tessa Jowell, the Secretary of State
for Culture, Media and Sport and the Minister for the Olympics, has announced
that a business summit will be held in London later this month to explore
how businesses and workers can benefit from the London Games. Amongst those
addressing the 300 delegates will be Sir Digby Jones, Director-General of
the CBI, Ken Livingstone, the Mayor of London, Brendan Barber, General Secretary
of the TUC, and from the London Organising Committee, Sir Keith Mills, the
Deputy Chairman and from the Olympic Delivery Authority, David Higgins, Chief
Executive. For further information click
here. Daily Telegraph 31.12.05
All is sweetness and light at the Shard; following the settlement between the three partners in the consortium developing the Shard of Glass at London Bridge have announced their plans for the adjacent site. New London Bridge House is to be built on a 3-acre site opposite the Shard and will have the same architect from Renzo Piano. It will have 580,000 sq ft of offices and 20,000 sq ft of retail. According to Renzo Piano, the new development will “float like the rock of Magritte above the ground”. Estates Gazette 17.12.05
However, the Economist still worries about iconic towers; the Economist returns to its theme that as much as ordinary Londoners love the new office towers like Gherkin tenants are not showing the same level of enthusiasm. Although a poll of architects named it as “the most admired new building in the world” 8 of the 34 floors still remain unoccupied. It quotes Chris Williams-Ellis of Atisreal as saying that most tenants prefer dull, square buildings. It contrasts the London Ark, a rotund, boat-like office building at Hammersmith Flyover, which has been empty for most of its 12-year existence with Plantation Place, built at the same time as the Gherkin, which was fully let within months. Given that the Mayor is making it clear that tall buildings will have to be interesting to get planning permission the Economist warns that we have to be prepared for more elegant and half-empty towers on the horizon. Economist 07.01.06
London still the costliest office centre; London is still the world’s most expensive office location, ahead of Washington and Hong Kong, according to new research by DTZ. For further information click here. Times 06.01.06
Heathrow rents most expensive in the world; according to a survey by King Sturge industrial rents in the area around Heathrow Airport are about €214 per square metre a year- making it by far the most expensive place in the world to rent industrial property. The high rents reflect Heathrow’s key position as the UK’s biggest airport and the limited supply of land available. Despite the huge increases in fuel prices, the faltering domestic economy and the July 7th attacks King Sturge forecast that the anticipated growth in the London economy and the development of Terminal 5 will enable Heathrow to retain its relative lead. London City Airport was the fastest growing London airport last year with a 13.9 per cent rise in passenger numbers. For further information click here. Financial Times 23.12.05
Wigmore Hall sale preserves venue for music; the lease on
the site of the Wigmore Hall has been sold by Prudential jointly to the Wigmore
Hall Trust and the Howard de Walden Estates. The Prudential insisted on selling
the hall in a package of buildings so that the Trust has paid £3m for
the venue whilst Howard de Walden has bought three neighbouring buildings
and offices next to the hall for £18m. Financial Times 05.01.06
Grapevine is produced twice monthly (except August and December when there is one issue) by Brian Wright on behalf of oneLondon.
Next issue:
26th January 2005
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