Pre Budget Report; the pre-Budget report (PBR) gained a lot of column inches this year not least because of the number of specially commissioned reports on various key issues for the economy that came with it. They included the Barker report on planning, the Eddington report on transport and the Leitch report on skills. Looking at the PBR James Blitz, the FT’s political editor, says that in six months Gordon Brown (pictured right) will almost certainly be sitting in 10 Downing Street, as prime minister. A few weeks later, the premier and his successor at Number 11 will unveil new plans for Britain’s public spending. The PBR has told us what the “number one priority” of that Comprehensive Spending review will be: education. In a political PBR that was light on real tax and spending decisions Mr Brown made a down payment on his ambition, spelling out what he regards as a significant increase in spending on school buildings. The Conservatives challenged that the actual increase was slower than in recent years and Blitz agrees that the next three years will see a significant slowing of growth in public spending after years of heady expansion. But for Mr Brown, the significance of the announcement is the broader message that he is sending. He believes that the state has a genuine role to play in ensuring that the UK is fit to meet the globalisation challenge - boosting science, skills and, above all, education. The one area where he received a lot of criticism was green taxation. Unlike the Tories he believes that raising green taxes as a proportion of overall taxation is fundamentally mistaken. He believes that the focus of policy should be on collective effort - hence the agreement with the construction industry that by 2016, every new home should be “zero carbon”. Further information - Click here Times 07.12.06
Contradictory views about the US economy; the US economic situation is best summed up by two pieces in the Guardian and the Times, which appeared on the same day and were at complete odds. In the Guardian Larry Elliott (pictured right) says that the current US economic situation faces a milder version of that in the UK in the uneasy days of 1992, which led to Black Wednesday. Although the dollar is floating and is underpinned by its status as a global reserve currency Ben Beranke, the Fed Chairman, knows his credibility is on the line. Inflation is high enough to make the central bank nervous but any further interest rate rises could be limited by the fact that the deflating housing bubble is now affecting the rest of the economy. Elliott concludes: “All in all, the prognosis is not good for the dollar. The economy is weak, policymakers seem paralysed and speculators look ready to stampede for the exit”. In the Times, Anatole Kaletsky says that rarely in living memory has an important currency, or any financial asset, been as friendless as the dollar is today. However he argues that most of the supposedly fundamental reasons why the dollar is falling appear to be bogus. He disputes the argument against raising interest rates and also that the prospects for economic growth point to a lower dollar. Although US growth is slowing, so is growth in Europe and Japan - and there is more likelihood of a reacceleration in the US in the second half of next year. In fact if the euro and the pound stay anywhere near current levels against the dollar and Asian currencies, a big change in the direction of the currency markets is probable very soon. Guardian 04.12.06, Times 04.12.06
Blair announces ‘£2bn red tape cut’; the prime minister has announced 500 measures to cut the £14bn cost of red tape to individuals, firms and charities. The aim is to save up to £2bn a year from measures such as simplifying planning applications and rules covering fire certificates. The plans envisage greater use of the internet to reduce administrative costs in areas such as importing and exporting. William Sargeant (pictured left), the head of the Better Regulation Unit at the Cabinet Office, said that the target to cut unnecessary bureaucracy by 25 per cent by 2010 was “ambitious”. He also acknowledged that there were some items of red tape that could not be abolished such as work permits.
Further information - Click here Financial Times 11.12.06
Brown to scrap DTI? The Observer claims that the Department of Trade and Industry (DTI) faces an almost certain abolition in a shake-up of Whitehall being considered by Gordon Brown when he becomes prime minister. It would be replaced by a beefed-up energy department and its other functions abolished or distributed around other departments. A separate science department is also being considered, reflecting what the chancellor considers as its importance in Britain’s economic future. The Observer quotes aides to Brown as denying that the shake-up would involve splitting the Treasury into a separate Ministry of Finance and a Department of Economic Affairs. It says that Brown has shown scant regard for the DTI and has made it a target for spending and job cuts. The Daily Telegraph says that the chancellor sees the DTI as a costly and unwieldy amalgam, unsuited to tackling the challenges of a global economy in which countries such as India and China pose an ever-greater competitive threat. Observer 10.12.06, Daily Telegraph 11.12.06
Charities Aid Foundation looks at a social equity capital market; the Charities Aid Foundation (CAF) is looking at creating a social equity capital market to allow social enterprises to raise money without losing their “social” focus or control of their business. Developing a Social Equity Capital Market, written by Jessica Brown of the New Economics Foundation, says that the number of social enterprises which seek to maximise social as well as financial returns, has grown hugely in recent years. There are now about 55,000 in the UK with Café Direct and organic food retailers Abel & Cole amongst the best known. Tracy Redding of CAF says, “some companies that have gone to the market felt that they have had to ‘sell their soul to the devil’”. She said that there was increasing interest in investing in social enterprises from wealthy individuals, charitable foundations and SRI investment funds as well as more mainstream investors. Further information - Click here Financial Times 04.12.06
UK policies ‘alienating Muslims’; a new report by the Demos think-tank claims that UK government policies are breeding alienation and resentment amongst British Muslims. The report says that the government rushed its response to the July 2005 London underground bombings and that too much emphasis has been placed on police powers and security and not enough with engaging with the Muslim community. The Demos study says, “extremists are able to attract support from communities cut adrift from mainstream British society”. By viewing Muslims as a single interest group the government has failed to draw a distinction between angry Muslim opinion and those who seek to use violence. Engaging with Muslim communities could offer a source of intelligence and help in diverting potential extremists away from violence. Further information - Click here Times 04.12.06
The row about multiculturalism; the Economist looks at the roots of the row about multiculturalism which led to Ken Livingstone boycotting a conference held to mark 30 years of anti-discrimination law. Whilst the row was put down to a personal feud between the mayor and Trevor Phillips, the head of the Commission for Racial Equality (CRE), it has deeper roots than that. It is about the new fault-line in the politics of multiculturalism: religion. CRE was originally created to deal with what Lord Scarman (pictured right) called “the racial disadvantage that is a fact of British life”. Although Afro-Caribbeans still suffer from more than their share of problems it is ironic that their original complaint that they wanted to be part of the mainstream of British society has now helped them to become accepted. A recent MORI poll, commissioned by CRE, shows that 80 per cent of black people report that they mix often with different ethnic groups. By contrast, Asians, especially Pakistanis and Bangladeshis, opted more for separateness. Consequently, they were seen as “less trouble” but the rise of aggressive Islamic fundamentalism and its accompanying threat of home-grown terrorism has changed all that. Mr Phillips suspects that race is not the problem so much as the cultural and religious separateness of many Asians that includes not just Muslims but also new Sikh and Hindu organisations. Mr Phillips believes that old-fashioned race politics is on the way out. Mr Livingstone disagrees and accuses Mr Phillips of creating unnecessary alarm over cultural differences that should be welcomed. Economist 02.12.06
One in five pensioners will live abroad; a report from the Institute for Public Policy Research (IPPR) says that the number of British pensioners who are moving overseas is now in such numbers that one in five will live overseas by 2050. The IPPR says that the phenomenon is called “silver flight”. At present there are 1.02m pensioners living overseas with the top choices for retirement being Australia (245,000), Canada (157,000) and the USA (132,000). In Europe, Spain is the top destination with 75,000 followed by France and Italy, both with 34,000. Ireland has 105,000 British pensioners. The study, Brits Abroad, will throw new light on the implications of Britain’s ageing population, an issue that Gordon Brown is putting at the centre of next year’s comprehensive spending review. In a separate report for BBC News Online the IPPR estimate that 5.5m Britons have opted to live abroad. Australia and Spain are the major destinations but there are increasing numbers heading to the major Asian economies. The two main parts of the population who are moving are young, unmarried professionals and pensioners.
Further information - Click here and here for BBC coverage
Sunday Times 10.12.06, BBC News Online 11.12.06
War on Want accuses UK retailers; a report produced by War on Want accuses three leading UK retailers - Tesco, Asda and Primark - of “exploiting” women workers in Bangladesh. It says that despite the fact that all three retailers are signatories to the Ethical Clothing Initiative, textile workers in Bangladesh are working 80 hour weeks in “potential death trap” factories for as little as five pence an hour. It bases its allegations on interviews with 60 workers from six different garment factories. The starting wages were as little as £8 per month, barely one-third of the living wage in Bangladesh but rose to £16 per month for better-paid sewing machine operators. Tesco said that workers at all its Bangladeshi suppliers were paid above the national minimum wage. “All suppliers to Tesco must demonstrate that they meet our ethical standards on worker welfare, which are closely monitored”. Primark said, “as members of the Ethical Trading Initiative we are fully committed to improving working standards in Bangladesh.” Asda said that it conducted 13,000 factory audits worldwide to ensure workers were not being exploited. Further information - Click here for War On Want and here for Ethical Trading Initiative Guardian 08.12.06, BBC News Online 08.12.06
Companies urged to take CSR seriously; a position paper produced by the Association of British Insurers (ABI) urges companies to include key information on corporate social responsibility (CSR) in their annual reports and to approach the issue seriously. It is dismissive of lavishly produced CSR reports deeming them as “a PR exercise”. The ABI urges companies to spell out the risk factors facing their businesses in enhanced “narrative reports” that British companies will be required to produce under new EU rules. Peter Montagnon (pictured right), ABI investment affairs director, claimed that companies that were already ahead of the curve on these issues tended to have higher share prices than those that did not. He went on, “more companies do regard CSR as being part of mainstream responsibilities. That is good and produces real results. But we want to build on that. Investors want to see more forward-looking discussion in the annual report. Understanding companies requires more than just looking at financial numbers. We would also like to see a greater use of key performance indicators”. Gordon Brown, the chancellor, scrapped the requirement to include an “operating financial review” in annual reports last November. But a forthcoming EU directive will require companies to include a “business review” along similar lines. Further information - Click here Independent 30.11.06
Tesco is most admired company for third time in four years; Tesco has won the Management Today ‘most admired company’ and Sir Terry Leahy, its chief executive, ‘most admired leader’ for the third time in four years. The awards, which are run in conjunction with Mercer Human Resource Consulting, are determined by a vote amongst company bosses. Management Today says that turnover and profits keep going up and up. Half-year results announced in October, showed profits up by 12.5 per cent to £1.15bn, with a huge boost coming from international sales. Profits were up by an amazing 42.1 per cent at online arm Tesco.com and one-fifth of UK sales are now non-food. However Management Today detects factors that could cause a wobble. Tesco has fallen below halfway in the CSR table - 136th out of 239 companies (BT were top of this table) and are 33rd in the Quality of Goods and Services category. Significant movers in the most admired company table were GlaxoSmithKline (up from 65 to 4), Carphone Warehouse (up from 50 to 5), Icap (97 to 7), AstraZeneca (59 to 11) and Berkeley Group (up from below 239 to 12). Another notable riser was Marks and Spencer who went up from 124th to 17.
Further information - Click here Management Today December 2006
The Barker planning Report; in her report on planning Kate Barker (pictured right), a member of the Bank of England’s monetary policy committee and a former economic adviser to the CBI, says that major infrastructure projects such as new power stations, housing and transport schemes are being held back by the fact that too much land is “protected” from development and whether local authorities are allowing projects to go through. Like Rod Eddington (see below) she calls for a national planning body to have the final say on major infrastructure projects coupled with moves to make England’s planning system quicker and more simple, and the appeals system to be speeded up. In spite of having one of the highest densities of population the UK has twice as much protected land as other industrial countries. Although 8.3 per cent of the land area of England is designated as urban, 12.9 per cent is greenbelt, 7.6 per cent comprises national parks, 15.6 per cent is designated as areas of outstanding natural beauty, 6.2 per cent special areas of conservation, 4.7 per cent are special protection areas and 8.2 per cent sites of special scientific interest. She also emphasises that currently one quarter of big planning applications are being blocked by local authorities. Further information - Click here BBC News Online 05.12.06
Barker proposes an extra land tax; one of the major measures expected from the Barker report were proposals for a Planning Gain Supplement, which would raise money for infrastructure by taxing new developments. In his pre Budget statement the chancellor referred to this proposal for further consultation, which will, in effect, delay any introduction until 2009. However Barker did propose another tax on brownfield sites as well as charging full business rates on empty buildings. Her argument is that there is around 63,500ha of previously developed land lying unused and that in some areas such as Birmingham, Manchester, the City of London and Hackney this amounts to a fifth of properties sitting vacant. The British Property Federation warned that that it would be inequitable if developers were penalised if there were delays whilst they sought finance. Estates Gazette 09.12.06
The Eddington transport report; the Eddington report argues against big transport projects such as motorways or high-speed rail links in favour of measures to reduce congestion. The principal proposal is to charge motorists a variable amount per mile travelled: more if the road is busy and less if it is not. He says that growing cities and international gateways should be priorities for investment and advises that transport planning inquiries should be speeded up. He claims that if car journey times could be cut by one tenth in urban areas, then productivity would rise by one per cent. He argues that essentially the problem is not the shape of the British transport system, which he suggests, is the right one, but the pressure imposed on particular points within it. Cleansheet solutions are rejected in favour of prosaic, incremental easing of bottlenecks - extra carriages on trains rather than new west coast mainlines. A second practical implication of the recommendations is likely to be even more controversial. Although it was not highlighted, the small print of the report suggests a rebalancing of effort towards London and the south east. Further information - Click here Guardian 02.12.06
Canary Wharf to double in size; Ruth Kelly, the communities and local government secretary, has revealed the government’s latest thinking about the Thames Gateway, which will include plans to double the size of Canary Wharf. Unveiling the Thames Gateway Interim Plan at the Thames Gateway Forum she said that the government would create a further 180,000 jobs and 160,000 homes across the region by 2016. Four key areas for development had been identified: Canary Wharf; Stratford in the Lower Lea Valley, which will house the 2012 Olympic Village; Ebbsfleet in North Kent; and the Gateway’s ports, in particular P&O’s £1.5bn development of Shell Haven in Thurrock, which is yet to receive planning permission. A development prospectus issued alongside the policy framework earmarks Canary Wharf for a further 10.7m sq ft of offices by 2016, 75 per cent more than its current 14m sq ft. The government also intends to accelerate the redevelopment of town centres across the region including Basildon, Barking, West Ham, Southend-on-Sea, and Bromley-by-Bow. Further information - Click here Estates Gazette 25.11.06
IKEA to launch houses on UK market; IKEA, the Swedish furniture chain, is to launch a range of timber-framed houses known as BoKlok - on the UK market. The houses, which have been pioneered in Scandinavia by IKEA and the Swedish construction company Skanska, are seen as an answer to the UK’s lack of affordable housing - even though prefabricated houses have traditionally struggled for acceptance in the UK where brick is dominant. The company expects to be able to sell flats for under £100,000 and three-bedroomed houses, even in south-east England, at less than £150,000. The homes will all have high ceilings, double-glazing and will be fitted out with IKEA kitchens and wooden floors. The BoKloks will be developed under licence by Live Smart@home, the commercial property arm of affordable housing body Home Group. BoKlok is Swedish for Live Smart. The first project will start early next year in Gateshead, followed by Glasgow. Further information - Click here Financial Times 01.12.06
The Leitch skills report; the chancellor has accepted the recommendations of the Leitch review and, in particular that the UK system needs to be switched from being supply-led through the FE colleges to being demand-led by the employers. In his report Lord Leitch (pictured right) argues that given the right policies the UK could boost employee productivity by £1,800 per average worker per year between now and 2020. This would involve nine in ten adults being trained to the equivalent of five good GCSEs or NVQ level two. At the same time 95 per cent of adults must achieve so-called literacy and numeracy levels, and 40 per cent must be trained to degree level. The chancellor also announced that Sir Digby Jones, former director-general of the CBI, will head a drive to persuade more businesses to become involved. The Leitch report urges major changes to the UK’s state-funded skills framework including a further streamlining of the Learning and Skills Council and the creation of a network of employer-led employment and skills boards to oversee skills training in each region. However Martin Wolf says that Leitch adds little to the skills debate. He says that the new system is to be built on the employer training pilots (now Train to Gain), but the Institute for Fiscal Studies assessed these pilots and concluded that 85-95 per cent of the training was deadweight and it would have happened anyway. He says that, in short, the Leitch report looks like just another in a series of proposals to remedy the failures of schooling. He says that far more worrying for the economy than the lack of skills at the bottom is the collapse of rigorous education at the top: the number of pupils studying physics at A-level has fallen by 56 per cent in 20 years. Further information - Click here Regeneration 08.12.06, FT 08.12.06
No school, no job for 1.24m young people; the number of young people doing nothing with their lives has increased sharply according to research undertaken for a new Conservative document produced by the Centre for Social Justice - a think-tank chaired by Iain Duncan Smith. Using data produced by the Office for National Statistics they say that there are 1.24 million aged between 15 and 24 who are neither in education, work nor in a training scheme - a 15 per cent increase on 1997. The rise has been particularly rapid for 16-17 year olds and men, where the figures are up by a third. Further information - Click here Times 11.12.06
New limits on access to skilled jobs; John Reid (pictured right), the home secretary, has announced that under the new migration proposals, skilled jobs will have to be advertised to British and European workers first unless they are listed as shortage occupations. The planned migration advisory committee, which will be established next year, will also propose an annual quota for the number of lower skilled migrants allowed into Britain. He stopped short of acceding to Conservative demands for an annual limit or even to spell out what the “optimum level” of migration should be. He hoped that the migration advisory committee, which will be made up of business and union leaders, would take account of the economic, tax and wider social impact of migration, including that on housing, schools and public services, as well as identifying skills gaps. The committee is to be introduced alongside a five-tier points-based system covering highly skilled, lower skilled, students and other temporary workers. The committee will be asked to recommend which jobs should be designated as shortage occupations which will also include taking into account alternative measures such as providing incentives to employers to train British residents in the necessary skills. Further information - Click here Guardian 30.11.06
Government orders new review of employment tribunals; following evidence that the recent changes to the working of employment tribunals are deemed to have been unsuccessful; the government has announced a review of the tribunals - the second in as many years. The new review was announced by Alastair Darling (pictured left), the trade and industry secretary, who said that it would be conducted by Michael Gibbons, a member of the Better Regulation Commission, and that he had been asked to report by next spring. The recent changes were designed to reduce the number of vexatious claims by requiring employees to go through a statutory three-stage grievance procedure before going to a tribunal, and by giving tribunals the powers to vet cases before allowing them to proceed. However despite these changes the number of cases remains as high as it was. In 2003-4 there were 115,042 tribunals, this dropped to 86,000 in 2004-5 (the year the changes came into effect) but by 2005-6 the numbers were back up to 115,039.
Further information - Click here Independent 08.12.06
Blair calls for 400 city academies; marking the tenth anniversary of his speech about “education, education, education”, Tony Blair (pictured left) has called for the target for city academies to be doubled to 400. The government had planned to build 200 by 2010 but Blair now thinks that demand is sufficient for 400. City academies take approximately £25m to build - suggesting £5bn extra would be required. He justified the increased target by pointing to encouraging exam results from the small number of academies that have opened, and to a stream of blue chip sponsors and universities willing to join his inner city drive. Blair believes that the academies represent the best chance of narrowing the education divide between rich and poor. He rejects the accusation that they are largely populated by the middle classes by pointing to large proportions of pupils on free school meals. The target of 200 by 2010 includes 60 in London, and the new target suggests that this figure will increase to 100. He also called for an increase in the number of Trust schools, which are independent within the state sector. At present there are 30 pathfinder projects covering 50 secondary schools but the prime minister called for 100 Trust schools to be in the planning stage by next spring. The Department for Education said that they were in talks with Unilever, the Co-Operative Group, Laing O’Rourke and the universities of Exeter, Essex, Sunderland, Wolverhampton and the West of England. Mr Blair and Alan Johnson, the education secretary, also announced a number of other changes including more stretching questions to make A-levels more challenging including the introduction of a new A* grade; a £2.5m fund so that every local authority can offer one centre offering sixth-formers the chance to do the international baccalaureate and specialised vocational diplomas for 14-19 year-olds which Alan Johnson described as “the most radical educational development taking place probably anywhere in the world.” Blair also called for pupils to be equipped with “life skills” including the chance to join debating societies, the opportunity to watch and take part in plays, the ability to cook a meal and to handle domestic finances. To mark the 30th anniversary of James Callaghan’s speech at Ruskin College, which was seen as paving the way for the national curriculum the Downing Street Strategy Unit has published a paper on progress in education over the past decade. It points to improved results but also a slowdown in progress over the past three years. Further information - Click here and here Guardian 30.11.06, Times 30.11.06, BBC News Online 30.11.06
Business executives could save badly run schools; the latest annual report of the Office for Standards in Education (Ofsted) shows that 51 per cent of England’s secondary schools are failing to provide a good education. One in eight is judged inadequate. According to Christine Gilbert (pictured right), the chief inspector of schools, speaking at the report’s launch “the report card for English education has been increasingly encouraging for ten years, but it is still not good enough”. Discussing persistent poor standards in some schools, she blamed poor leadership and management within schools. “We should look at drawing in heads from business and industry. If you have teaching experience it may get you to first base quicker, but I do think schools could benefit from the leadership expertise of people from outside, particularly those who have taken early retirement in their 50s. They could come in as consultants or heads”. Further information - Click here Times 23.11.06
Boys struggle to read and write in English; government statistics show that girls aged 11 who speak English as a second language achieved higher scores in reading and writing tests than boys for whom English is their mother tongue. Figures also show that Chinese, Indian, Irish and pupils of mixed white/Asian background achieve higher scores than white British children in GCSEs and national tests. However there are still significant gaps between children in these groups and other ethnic minorities. While 65.4 per cent of Chinese pupils and 44.2 per cent of white British pupils achieved fives GCSEs, including english and maths, the figure was 29.2 per cent for Caribbean children and 3.8 per cent for Gypsy/Roma children. Further information - Click here Times 24.11.06
City is in denial about investing in science; the City is in denial about the role that investment in science can play in boosting profits according to a report produced by the Engineering and Technology Board. They say that climate change is the biggest test for the City both as an environmental issue as well as an “investment opportunity of huge magnitude”. The report examines what it calls the “paradox of why there are so few science, engineering and technology businesses generating wealth in the UK, when London is a powerful capital market and our science is among the best in the world.” The authors, who include senior representatives of bodies such as the Association of British Insurers, the London Stock Exchange and the British Venture Capital Association, lies in City attitudes. It says that the City should rise to the challenge of climate change. Further information - Click here Financial Times 05.12.06
Business chiefs urge EU to tighten carbon regulation; a group of business chiefs have urged José Manual Barroso (pictured left), the president of the EU Commission, to set targets urgently on the regulation of greenhouse gases after 2012. The leaders, who included representatives from B&Q, BAA, Centrica, John Lewis, Johnson Matthey, Shell UK, Standard Chartered Bank, Tesco and Vodafone, said: “We need to know now what these targets will be in order to find the best way to achieving them”. The EU scheme, which has been operating since January 2005, promotes the trading of carbon emission allowances and should be linked to other carbon trading schemes around the world. The 25 business leaders say: “A fully international carbon market should be a diplomatic priority”. Two days after the meeting the EU published its proposals for the second phase of the Emissions Trading Scheme (ETS) to cover the years 2008-12. Under phase one national government capped the amount of carbon that industries such as steel and electricity could produce. Within the cap, and across Europe, polluters had the right to trade carbon. The first round failed, according to an FT editorial, because too many countries gave their industries too many carbon credits with the result that the few countries, such as the UK, that did set tough limits have to pay everybody else for their surplus credits. It commends the Commission for seeking to impose tough and equitable caps on emissions in phase two. It says it is the way that national governments are still trying to game the ETS that is of the most concern. They created ETS. They have signed Kyoto and their leading politicians agonise in public about the threat from global warming. But they still seek to protect their domestic industries and pass the cost of carbon emissions on to someone else. Further information - Click here and here for EUROPA Financial Times 28.11.06, 30.11.06
Climate change brings rejection of Stansted expansion; Uttlesford council in Essex has turned down the planning application for a plan to double the number of passengers using Stansted airport. The council’s planning officers said that it would be premature to grant permission until the government had been given a chance to respond to the Stern report and whether it wanted to amend or withdraw the air transport white paper. Guardian 27.11.06
Go-ahead for Heathrow expansion; according to the Times the government is due to announce later this week that it endorses a big expansion of Heathrow, including a new runway. Gordon Brown, the chancellor, is believed to have accepted the arguments put forward by Sir Rod Eddington in his transport report that expansion of Heathrow is crucial to the economy and to maintaining London’s position as Europe’s financial centre. The progress report on the aviation white paper will continue to support the second runway at Stansted but this is opposed by all the major airlines and Ferrovial, the Spanish company, that recently bought BAA, agrees with British Airways that Heathrow should be the priority. The main obstacle has been the levels of pollution but the Department of Transport is now confident that they can be reduced to European levels by the time a third runway is built. BAA is thought to be secretly developing a pollution charging scheme aimed at older, more polluting lorries. BAA hopes to submit a planning application for a third runway in 2008. Ministers are also keen to accommodate more take-offs on the existing two runways while the third runway goes through the planning process. A consultation paper will be published in the New Year proposing the ending of runway alternation, which gives residents under the flight path respite from aircraft noise for half the day. Times 08.12.06, Evening Standard 08.12.06
Mayor hints at tougher climate rules; speaking at the Thames Gateway Forum, London mayor Ken Livingstone (pictured right) hinted that he might raise environmental standards for new developments, because previous estimates about the effects of climate change in London could be “totally wrong”. He told developers that they must “build houses, offices and shopping centres so that they can be liveable in the middle of this century”. Existing measures to prepare the city’s buildings for a future rise in temperature may not be sufficient. He said that in common with all models for cities around the world the model they had been using was actually based on rural areas and so did not give accurate predictions for London where heat bounced off the concentration of concrete, brick and steel. In October the mayor launched the Urban Heat Island Effect Study, which was looking at the steps that London should take to adapt to warmer temperatures. Estates Gazette 25.11.06
Stronger BID seen as key to Oxford Street improvement; a proposal for a change in legislation that would require landowners to contribute to Business Improvement Districts (BID), as well as wider limited partnership ownership pools, are two of the key recommendations of the Mayor’s West End Central Retail and Planning commission. The commission, which is headed by Ian Henderson, former chief executive of Land Securities, sees an extension of the powers of the New West End Company (NWEC) as the means of getting a single private sector-led body to “oversee redevelopment of the area and its management”. It warns that Oxford, Regent and Bond streets and the surrounding area are “at a turning point” and warns of a “very real risk that institutions, landowners, and retailers and other occupiers will stop investing”. The area contains more than 16m sq ft of retail floorspace - over half of central London’s total - employs over 30,000 people in shops and accounts for more than £4bn of retail spend a year. Most urgent is the need to improve the eastern end of Oxford Street, where a more powerful NWEC could lead the revamp, the report says. The commission also calls for better co-ordination between Westminster and Camden councils, the mayor and Transport for London. The commission supports the mayor’s idea for trams coupled with greater space for pedestrians. This idea seemed to have gained credence when more than a million people turned out for traffic free shopping in Oxford Street and Regent Street on 2nd December. Further information - Click here Estates Gazette 02.12.06, Observer 03.12.06
Mayor launches long-term transport strategy; the mayor is pressing ahead with plans to drive more motorists off the road to reduce congestion and carbon emissions. According to Transport 2025, a long-term strategy document for the capital’s transport network, almost one in ten car journeys in London should be abandoned in favour of public transport over the next 20 years. It warns that current policies will fail to handle the projected 4m extra journeys likely to be made every day in London by 2025. It calls for a nine per cent “mode shift” from cars to public transport, cycling and walking, on top of the four per cent shift seen over the past five years. In addition there is expected to be a 15 per cent rise in freight movements over the next two decades. Without any investment beyond existing transport policies, it predicts crowding on the tube and national rail could increase by about 40 per cent. The single most important investment decision would be Crossrail, which is awaiting a funding decision from the government. Further information - Click here Financial Times 29.11.06
Central London house prices rise by 26 per cent; according to Knight Frank, the estate agency, central London house prices have risen by 26.6 per cent in the past year, the biggest surge since the property market peaked in the late 1980s. In November they raised by 2.8 per cent - the ninth month this year when they have gone up by more than two per cent. They attribute the rise in prices to “sharp demand in growth met with an equally sharp downturn in supply”. The agency said that they expected prices to rise by 12 per cent next year. Further information - Click here Times 11.12.06
Farrell proposes new “Intellectual Quarter” for Bloomsbury; Sir Terry Farrell (pictured right) has unveiled plans to spruce up the heart of Bloomsbury by creating six ‘mini masterplans’ with the aim of transforming the area into the UK’s leading cultural and educational quarter. The study, ‘Bloomsbury - the strategic vision’, jointly commissioned by the London borough of Camden, University College and the London Development Agency, is seen as the first stage in a lengthy process. Launching the plans at a lecture at UCL Sir Terry said: “In recent years, the area’s landscape and public realm has deteriorated, and much of Bloomsbury is dominated by heavy traffic flows which create severance and discontinuity”. His six mini masterplans aim to create an urban environment that respects Bloomsbury’s history and its position as an oasis in the west end by reclaiming the squares and streets for pedestrians. They cover Bloomsbury’s squares, the museum quarter, two-way traffic, pedestrian movement, the design manual and the universities plan. The universities plan proposes a universities high street focused on Malet Place, which would run from the front quad of UCL south to the British Museum, taking in the University of London, RADA and Birkbeck College. Further information - Click here Estates Gazette 04.12.06
Hotel occupancy at ten-year high; the latest survey by PKF hotel consultancy services says that London hotel occupancy and room rates are at a ten-year high after recovering from last year’s fall after the July bombings. In October London hotels were 83 per cent full, a 7.6 per cent rise on the same month last year. Room rates were an average of £125.79. Outside London, hotels were 78.3 per cent full, a 2.5 per cent rise on last year. Further information - Click here Financial Times 29.11.06
Contingency costs beset 2012 budget planning; a major dispute about the size of the contingency budget in the revised costings for the 2012 Games has blown up between the government and London mayor, Ken Livingstone. The mayor is objecting to the government’s plans for a 60 per cent contingency, which he wants to limit to 20 per cent. He claims that because of the partnership agreement, he has a veto on the proposed budget, which is due to be finalised in early 2007. This was disputed by Jack Straw, the leader of the Commons, who rejected any thought that the London mayor could dictate budget decisions in this manner. “Ken can write as many blank cheques as he wants - the thing is, they won’t be banked or paid because it is a matter for the government to decide. However the Department for Culture, Media and Sport later conceded that the decision-making structure set up for the games did give the mayor significant influence. They said that the budget had to be approved by the Olympic Board, whose four members include Mr Livingstone. The mayor did later say that he would accept a figure between his 20 per cent and the Treasury’s 60 per cent. Financial Times 24.11.06
However IOC happy with progress and budget; Dennis Oswald (pictured right), the chairmen of the International Olympic Committee (IOC) Co-Ordination Commission, has told ruling executive board that London’s preparations for the 2012 Games are ahead of schedule and that he has no fears about the budget. The Swiss lawyer led a delegation on a two-day inspection of the areas for the venues, transport, environment and marketing. Despite claims that the topic of London had been added to the agenda for the meeting in Kuwait City at the last moment, IOC officials said that it was quite normal that there should be a report on a host city. There were also reports on Beijing 2008 and Vancouver 2010. Guardian 29.11.06
RIBA President warns about ‘plasterboard’ Olympics; Jack Pringle (pictured left), the current president of the Royal Institute of British Architects (RIBA), has joined Richard Rogers in warning that budget cuts risked sacrificing design excellence in the way that contracts were being awarded. They are worried that the Olympic Delivery Authority (ODA) is awarding contracts on a “design and build” basis, where the architect’s input only comes after the contract has been placed. The £300m contract to build the main Olympic stadium has been awarded to the Team McAlpine consortium, which was behind Arsenal’s new Emirates Stadium. It includes architects HOK Sport which have been involved with Wembley and the new stand at Ascot. Mr Pringle said: “The contract was a parody of one’s worst fears. HOK are marvellous architects, the Emirates Stadium is fantastic, and McAlpine are one of the most accomplished contractors. Is this a one-horse race?” The contract for the international media centre had also been let on a design and build basis. He had had calls from architects working on transport projects who feared that cuts to the budget and specifications would lead to it becoming the “tarmac and plasterboard” games. Sir Roy McNulty, acting chairman of the ODA, pointed to the spectacular plans for the aquatics centre unveiled by Zaha Hadid, which had emerged from a competition. He said that he envisaged many other projects being design competitions. Guardian 01.12.06
Radical architect to lead Stadium designers; Professor Peter Cook, a radical architect whose designs have only been realised five times in his 46-year career has been announced as the leader of the Olympic Stadium project for HOK Sport. Best known as a conceptual architect his most recent building was the Kunsthaus in Graz, Austria. His appointment prompted a mixed reaction with Bob Blackman, the London Assembly Conservative spokesman on the Olympics, hoping the design would not be too unworldly whilst Marcus Binney, architecture correspondent of the Times, said that until recently Cook’s designs had been impossible to build but modern technology had caught up with his designs so that they could now be built at a reasonable price. Times 02.12.06
West Ham to seek freehold in Stadium deal; West Ham United will seek to acquire the freehold on the Olympic Stadium in the forthcoming negotiations with the government about the club’s mooted occupation of the venue after 2012. The talks, which are set for this month, are being driven by the incoming chairman and new owner of the club, Eggert Magnusson. Through his membership of UEFA’s executive body on behalf of Iceland, he has longstanding contacts with Richard Caborn, the UK minister for sport, and a key figure in the discussions about the future use of the stadium. A West Ham source said that the deal had to stack up financially. “Whether it would be a freehold or a leasehold would be fundamental. We could be exchanging the Boleyn Ground for the Olympic Stadium for 99 years and that is not like for like - it would be a diminishing asset”. Guardian 28.11.06
Westfield delays announcing developer; Australian shopping centre giant Westfield has delayed announcing who will develop the majority of the Olympic Village site because of a dispute about the £120m section 106 payment. A consortium led by Lend Lease was expected to be named as the developer of the majority of the £4bn project ahead of Bourgoyes, the French construction group in partnership with Baratts. The section 106 agreement originally agreed by a consortium comprising Westfield, Multiplex, Stanhope, the Reuben Brothers and LCR was the largest ever signed in the UK, but was based on the consortium developing the entire 13.5m sq ft scheme. However Westfield will only be developing a 1.5m sq ft shopping centre and 1,040 homes in the first phase of the new scheme. Lend Lease will develop the remaining six zones of the Olympic Village, including 4,500 homes, up to 5m sq ft of offices and almost 400,000 sq ft of leisure. Westfield is also in negotiation about the subsidies the developers will receive for preparing the site and for retro-fitting the residential element after the 2012 Games. However a Westfield spokesman said: “We are proceeding very well in taking forward the planning, design and pre-letting of Stratford City. We shall shortly lodge the strategy for the entire site focusing on the environmental and sustainability specifications”. Estates Gazette 09.12.06
“Walkie Talkie” called in; in a surprise move Ruth Kelly, the communities and local government secretary, has decided to ‘call in’ Land Securities’ 525ft “Walkie Talkie” tower proposed for the old Kleinwort Benson site in Fenchurch Street. The 600,000sq ft scheme is outside the City of London Corporation’s designated tall buildings cluster. Estates Gazette 25.11.06
Battersea Power Station is sold to Irish group; the Hong Kong property developer Victor Hwang has sold Battersea Power Station for £400m to Real Estate Opportunities, a closed-end investment company listed in London and Dublin, which is controlled by Treasury Holdings. Treasury is owned by John Ronan and Richard Barrett, who are redeveloping Dublin’s waterfront. The Hwangs, who paid £10.5m for the site in 1993, blamed the sale on bureaucracy and the loss of a long-term tenant. Three weeks ago Wandsworth council gave their approval for a scheme to rebuild the famed white chimneys at the 1930s building and construct houses and offices on adjacent land. Treasury said that their plans resembled those of the Hwangs. The mixed-use development would include retail, leisure, hotels, offices and residential spaces. The mayor has written to Treasury Holdings seeking confirmation that the refurbishment of Battersea Park Station, which is part of the section 106 agreement, will be long enough for eight-carriage trains. Times 01.12.06, Estates Gazette 09.12.06
Planning approval for Supreme Court; planning approval has been given to convert the Middlesex Guildhall Crown Court site in Parliament Square into the home of Britain’s first Supreme Court. Building work will commence in March and the first case “will be tried in October 2009”. Times 23.11.06
Barking Reach wins consent; Bellway and English Partnerships have won consent for Barking Reach, one of the UK’s largest regeneration schemes. It will provide 10,800 homes, schools and community facilities on a 180ha site. Consent is dependent on agreement from the mayor of London and the secretary of state for communities and local government. Estates Gazette 25.11.06
Advertise on a church; St Martin in the Fields is to erect an advertising hoarding at the corner of its frontage facing into Trafalgar Square. The church says that it will only be there whilst building works are going on until next year and that it might raise thousands of pounds towards the restoration of the church. The guidelines for the hoarding stipulate that there will be no adverts promoting alcohol, tobacco, junk food, sexual activity or violence. The vicar, the Revd Nicholas Holtam, said “the renewal project is the most significant work on this site since John Nash’s reordering of this part of London in 1928. We thought long and hard about approaching Westminster council and, in the end, we decided the pros far outweighed the cons. Wealth creation in itself is no bad thing. Our café makes money, our shops make money and it all furthers the work of the church. This is a temporary measure which will not set a precedent”. The money will be used to fund repairs to the roof and the stonework. The development has bee attacked by the Civic Trust. Times 25.11.06
Regeneration scheme to link Dome to Greenwich Town Centre; a massive regeneration scheme fronting the River Thames from the Dome to Greenwich town centre has been given planning permission. London & Regional plan a 1.3m sq ft project, which will include 667 houses, 441,334 sq ft of offices, a 100-bedroom hotel and studio workshops. About 55 per cent of the scheme, which is to be called Granite Wharf, will be public open space, which will involve widening the Thames path and will include four squares, including a main central public space with shops and cafes; a health and sports area; and two gardens. Work on the scheme, which was designed by Squire & Partners, is scheduled to start in March 2007 with completion set for summer 2011. Further information - Click here Estates Gazette 25.11.06
King’s Cross plans move forward; work on Argent’s £2bn regeneration of King’s Cross could start late next year following Camden council’s approval of the section 106 agreement and all final legal terms and consents. However, there is still a dispute over the 2.3-acre triangle site - the only part of the 64.5-acre scheme that lies inside Islington. A local campaign group is threatening to seek a judicial review over the amount of social housing to be built on the site. Estates Gazette 25.11.06
grapevine is produced twice monthly (except in August and December when there
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Next issue on 18th January 2007
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