Investors expect interest rates to fall to 4.5 per cent by the end of the year; following the Monetary Policy Committee’s (MPC) decision to lower interest rates from 5.5 to 5.25 per cent on 7th February, the FT says that investors were predicting further cuts to 4.5 per cent by the end of the year. Alan Clarke of BNP Paribas, believed that the MPC would keep lowering rates, but acknowledged “for now the Bank is trapped between plunging growth prospects and sharply rising inflation”. The Consumer Price Index rose by 0.1 per cent in January to 2.2 per cent. Both the European Central Bank and the Bank of England have resisted copying the drastic emergency steps taken by the US Federal Reserve to boost economic growth- Jean-Claude Trichet, ECB President, warned that a US-style stimulus package was now warranted in the eurozone. The scope for the UK adopting a fiscal stimulus package has been further constrained by the decision by the Office for National Statistics to reclassify Northern Rock as a public sector company, saying that the controls the government had taken over the stricken mortgage lender were similar to a nationalised entity. Further information Financial Times 08.02.08, BBC News Online 12.02.08
High street sales stronger than expected; the latest data from the British Retail Consortium shows that sales were 4.9 per cent higher in January than a year before. Over the Christmas period sales were up by 3.7 per cent. Helen Dickinson, head of retail at KPMG, said that the figures had been heavily skewed by a strong performance in the first week of January as the sales absorbed demand left over from a poor December. Further information Financial Times 12.02.08
Business groups call for more cuts; a cluster of business surveys say that the economy is facing a rough year as a result of the credit crunch and slowing world economy, but a recession remains unlikely. Business confidence has fallen to its lowest level since 2003, while 40 per cent of firms expect to make redundancies this year, and the housing market is in its worst state for 10 years. The British Chamber of Commerce (BCC) forecasts that economic growth will slump this year to 1.1 per cent, a third as much as the peak last autumn. It thinks growth will all but grind to a halt in the middle of 2008 before gradually recovering. David Kern, the BCC’s economic adviser said: “Threats to growth are much more acute now than risks of higher inflation, and we would have welcomed a bold UK move to [cut rates] to five per cent”. The Institute of Chartered Accountants in England and Wales highlights the loss of confidence in business whilst the Chartered Institute of Personnel and Development said that its latest jobs survey showed a big rise in redundancy intentions. Further information Guardian 11.02.08
IFS calls for extra £8bn to be raised in taxation; in its latest “Green Budget” the Institute for Fiscal Studies (IFS) says that Chancellor Alistair Darling will need to announce fresh tax increases amounting to £8bn in this year’s spring budget, to keep public sector debt below the government’s self-imposed ceiling. Without the rises, the IFS said: “We expect the government to have to borrow more than £40bn this year, next year and in 2009-10. We expect public sector net debt to hit the government’s ceiling of 40 per cent of national income in 2009-10 and to rise to 41.2 per cent by 2012-13.” The government would also break its “golden rule” [to borrow only to pay for investment] over the new economic cycle”. However, because of the current political difficulties, the IFS does not expect a significant early fiscal tightening but it warns temporary problems in the financial sector can have a bigger and more persistent effect on the public finances than the Treasury initially expects. It also warns of the potential damage to public sector finances of Northern Rock’s liabilities: “This would probably add £100bn, or seven per cent of national income to public sector net debt. The government should publish public finance figures with and without the impact of Northern Rock”. Further information Independent 31.01.08
House price inflation is lowest for two years; house prices declined for the third consecutive month in January taking the annual rate of price inflation to its lowest for two years, according to Nationwide. The lender said that prices dipped by 0.1 per cent, less than analysts expected but taking the annual growth rate to 4.2 per cent, the weakest since December 2005. On the less volatile three-month on three-month measure, prices fell by 0.3 per cent. The data shows the housing market remained subdued at the start of the year, when business usually picks up, after a sluggish end to 2007. Michael Saunders, economist at Citigroup, said “The chances are that house prices decline further in coming months”. Gloom about house prices also seems to be feeding into fears about the economy. The GfK NOP index of consumer confidence showed people very reluctant to make big purchases in January, although they were more pessimistic at the general economic outlook than their own personal finances. Further information - Nationwide and Tribal Group Financial Times 01.02.08
FSA warns that one million homes are at risk; although the figures for repossessions in 2007 were lower than expected the Financial Services Authority (FSA) has given a warning that more than one million homeowners could be at risk of serious financial difficulty and possibly losing their homes in an economic slowdown. The warning comes as the surveyors predict that 123 homes per day will be repossessed this year. The FSA cites three warning signs on mortgages: the loan was taken out for more than 25 years; it is worth more than 90 per cent of the home; and the amount borrowed is 3.5 times or greater than income. Over a third of mortgages sold between April 2005 and September 2007 fall into one or more of these categories. This suggests that more than two million of the 5.7m mortgages written in this time are of potential concern. It is the 1.04m customers whose mortgages contain two or more characteristics who most concern the FSA. The Council for Mortgage Lenders said that 27,100 homes were repossessed in 2007. Further information Guardian 30.01.08
US joins in protests about non-dom tax; following the protests made by the Lord Mayor and others about the dangers to London of the proposed annual levy on foreigners living in the UK there have also been protests by the US and, for several days, Lord Jones, the minister of trade. The US protest relates to whether the £30,000 fee falls within the transatlantic treaty designed to avoid double taxation. The US banks in London are also making similar protests although the Treasury has, so far, been resisting saying “it is a matter for the US authorities.” Lord Jones originally made a statement saying that the levy, which applies to non-doms who have lived in the UK for seven years or more, “threatened London’s status as the world’s leading financial centre”. However within hours the Department of Business and Enterprise published another statement saying that he was perfectly happy with the “reasonable plans”. The FT says that the Treasury have estimated that 3,000 of the 116,000 non-doms will leave. Evening Standard 11.02.08, Financial Times 08.02.08, 11.02.08
Rethink may be on the cards for non-doms; several newspapers claim that Alistair Darling appears to be ready to rethink his plan to increase taxation on non-domiciled foreigners living in Britain. The Times says that it understands the Treasury is looking at new provisions to assure non-doms that the aim was not to pry into their worldwide taxation affairs. Times 12.02.08
Tax rises for services ruled out; Sir Gus O’Donnell, head of the Civil Service, has told the Guardian Public Services Summit that the government will not be able to raise taxation to cope with the growing demand for public services. Further information Guardian 08.02.08
The world post-Hain; following Peter Hain’s decision to stand down as secretary of state at the Department for Work and Pensions (DWP) a number of changes have been made in the government. James Purnell, former secretary of state for the Department of Culture, Media and Sport (DCMS) and before that a minister for pensions reform, has taken over from Peter Hain at DWP. He is succeeded at DCMS by Andy Burnham, former chief secretary at the Treasury who is, in turn, succeeded by Yvette Cooper, the former housing minister. On the next rung Caroline Flint, previously minister for employment and welfare reform, takes over housing and her post goes to Stephen Timms, previously the competitiveness minister. Baroness Vadera, formerly Parliamentary under-secretary at the Department for International Development, takes over Stephen Timms’ portfolio dealing with competitiveness and deregulation including enterprise. Further information Regeneration 01.02.08
Green paper planned on the creative industries; the Department of Culture, Media and Sport is planning to publish a Green Paper next week as part of a drive to turn Britain into the “world’s creative hub”. The paper will list 20 main proposals including a £200m national film centre, a permanent home for London Fashion Week, funding for new film and creative ideas, and a Davos-style arts and finance conference. Despite the Green Paper coming after a series of cuts made by the Arts Council the Times says that the government is keen to demonstrate support for Britain’s creative talent. Times 12.02.08
Fifty five per cent of council tenants are unemployed; Caroline Flint, the new housing minister, has called for council tenants to be made to seek work as a condition of their tenancy – enforced by signing of “commitment contracts” agreeing to look for work. If they failed to do so, they could lose their council homes and the contracts would be extended to existing tenants in the future. A Department for Communities and Local Government spokeswoman said that Flint was aware that her proposals were going to lead to strong debate but she did not see it as an option to leave a whole generation of council tenants without pressure to seek work or train. Many local government bodies and housing charities attacked the idea pointing out that councils had a duty to house the homeless. Shelter said that Flint’s ideas would send Britain back to the Victorian era whilst Leslie Morphy of Crisis said: “We are totally opposed to this proposal. Social housing now contains some of the most vulnerable people in society. Our experience at Crisis shows that encouragement and enablement- and not threats- are the way to help homeless and vulnerable people to build independent lives”. Ms Flint said that there had been a “collapse of work” in the council and social housing sector. Statistics reveal that the number of unemployed council tenants has risen by 20 per cent to 55 per cent since 1981- twice the national average. Almost three-quarters of those aged under 25 are unemployed. Further information Guardian 04.02.08, 06.02.08, Financial Times 06.02.08
Six million live in homes where benefits are only income; the latest report from the House of Commons Public Accounts Committee looks at Helping People from Workless Households into Work and concludes that there are six million people living in homes where no one has a job and “benefits are a way of life”. Introducing the report, Edward Leigh, chairman of the Committee, said: “Many of those on benefits year after year are unskilled, disabled or caring for children. Their problems need to be tackled early, before the pattern of being unemployed becomes entrenched. Support also needs to be delivered by organisations with the right kind of knowledge of local communities. The effectiveness of employment support programmes in reducing the numbers of long-term unemployed will depend on their ability to reach these people”. To reach the government’s target of raising the employment rate from 74.4 per cent to 80 per cent of the population the Department of Work and Pensions estimates that this will mean getting two million people into jobs, including one million currently on incapacity benefit and 0.3 million lone parents. The report recommends that at present there is no overarching strategy to prevent duplication of effort between the Jobcentres, the local authorities and voluntary sector organisations. A joined-up strategy could support information sharing, providing local partners with appropriate access to data on the locations of worklessness and enhancing the effectiveness of outreach activities. Further information Daily Mail 07.02.08
‘Immigration is not a threat to public services’; Britain’s public services are not in danger of being overwhelmed by the rising population according to a new policy paper from the Lib Dem-leaning think-tank, the Centre Forum. In Does Britain Need a Population Policy? Alastair Murray argues that the strain on public services is because central government is slow to respond to the challenges of rising immigration, fertility rates and greater longevity. He argues: “These problems are fundamentally the result of an overly centralised state and would and did- exist without large-scale immigration”. He argues that levels of immigration into the UK could fall in 2011 when France and Germany relax their restrictions on workers from new EU member states. Further information Times 29.01.08
London authorities insist on ethical standards from suppliers; private sector suppliers are being forced to increase the diversity of their workforces and improve their green credentials to win contracts worth billions from London authorities. The Greater London Authority Group, which includes Transport for London, the Metropolitan Police and the London Development Agency and spends £3bn a year on goods and services, has written new “responsible procurement” clauses into dozens of new contracts. It is intended to use the same policy for procurement for the 2012 Games and the planned construction of Crossrail. In addition GLA Group contracts worth about £5.5m annually have had conditions inserted specifying that employees must earn at least “the London living wage”, which is set at £7.20 per hour. The idea, which originated in the US, is to ensure that social and environmental goals are implicit in the authorities’ buying decisions. The mayor’s advisers claim that the policy also gives more opportunities to smaller businesses, especially those run by people from diverse ethnic backgrounds. Further information Financial Times 11.02.08
Local leaders support local tax-raising powers; nearly nine out of ten business and city leaders support the use of local fundraising tools to pay for crucial local infrastructure according to a survey undertaken by for the Centre for Cities by PricewaterhouseCoopers. The survey found that 86 per cent of council and business leaders supported the use of fundraising schemes such as supplementary business rates. There was also support for greater financial devolution with only 10 per cent supporting the status quo where most local funds are administered by central government. In addition 92 per cent of respondents said that businesses need to have a say in how to tackle local transport and housing problems. Further information Regeneration 08.02.08
Tories in move to shake up regulation; the Tories have poached the former heads of the government’s red tape advisory watchdog and the Financial Services Authority (FSA) to lead a new review of regulation. The review is being headed by Sir David Arculus, the former chairman of the Better Regulation Task Force with other members including John Tiner, the former chief executive of the FSA and Teresa Graham, who has just stepped down as deputy head of the government’s Better Regulation Commission. Previous Tory attempts to launch red tape strategies have gone awry. The £35m of potential cuts identified by the David James review before the last election was successfully used by Labour to claim that the Tories wanted to cut public services. The new group will have a different remit. Its main aim will be “to make the regulatory system work better, accepting that in a modern society people want protection against things going wrong”. Alan Duncan, the shadow business and enterprise secretary, stressed that the party was “not looking for a laundry list” of cuts. He went on: “We’re looking at how the law is made and why it’s made so badly, as it cascades from Europe to Westminster to local authority guidelines to implementation of these guidelines- a five star horror machine that generally goes from bad to worse”. Sir David Arculus indicated the different approach, saying it would build on the “good work” by the government to reduce administrative burdens imposed by Whitehall. Further information Financial Times 04.02.08
Businesses urged to claim R&D tax reliefs; PriceWaterhouseCoopers (PWC) have claimed that businesses are missing out on as much as £1bn in cash from the government because of misconceptions about what can and cannot be claimed as tax relief for research and development work. The government has announced further changes to its R&D tax credit scheme from April. The actual rate will climb from 150 to 175 per cent for small firms and from 125 to 130 per cent for large companies. At the same time, the size of company that can benefit from the top rate of R&D tax credit will double, from 250 to 500 employees. Diarmuid MacDougall, tax partner at PWC, says that many firms are missing out because they underestimate the amount of resources they can claim for in creating innovations. Firms have until 31st March to claim tax relief in spending during the past six years. After this date, they will only be able to claim for the previous two years. Further information Financial Times 09.02.08
Tax relief rules eased for deprived area loans; the government has relaxed the lending rules of the Community Investment Tax Relief (CITR) scheme to make it easier for micro-finance institutions to invest in deprived areas. CITR offers tax breaks to people who invest in accredited community development finance institutions (CDFIs) that provide loans for firms in deprived areas. Previously CDFIs were required to invest at least 75 per cent of funds raised through the scheme each financial year from the fourth year after accreditation onwards. The change means that the CDFIs will be allowed to invest 75 per cent in firms in poor areas after year four. The Department for Business, Enterprise and Regulatory Reform said that the change would make CITR “more practical, clear and useable”. Further information Regeneration 08.02.08
Online shoppers prefer books; according to a global survey by Nielsen Online, books are the most popular item online across the globe. Over the past three months two-fifths of e-shoppers bought books, followed by 36 per cent buying clothing, accessories or shows, 24 per cent airline tickets and 19 per cent music. The survey, which covers more than 26,000 internet users in 48 countries, contradicts the prediction that online clothes and shoe shopping would never take off: they are the fastest growing sector having jumped from 24 to 36 per cent. There was also strong growth in books whose biggest buyers are in South Korea - also the country with the highest proportion of online shoppers, at 99 per cent of those with internet access. Germany is second, with just over half of internet users buying books online. Austria is next followed by Vietnam, Brazil, Egypt, China and India. With 45 per cent of internet users buying books, the UK was tenth in the list. Further information Guardian 28.01.08
Experts predict grim year for insolvencies; the number of people becoming insolvent last year unexpectedly dropped for the first time in nine years but experts are warning 2008 is likely to set another record high as debt problems mount. Government figures show that insolvencies dropped by four per cent in the last quarter of 2007 producing a total of 24,846- a drop of 26 per cent on the same period of 2006. Mark Sands, head of personal insolvency at KPMG, predicted with the credit crunch and end of mortgages with cheap fixed rates insolvencies could total 130,000 in 2008. Further information Guardian 02.02.08
Skills shortage threatens UK status in biosciences; a survey of 170 bioscience and pharmaceutical companies by Semta, the skills council for engineering and technology, finds that nearly 40 per cent of the companies cannot fill key posts, particularly at higher levels. This was four times more than companies in other sectors. In addition 29 per cent of firms had skill gaps in their workforce. The findings raise fresh concerns about Britain’s status as one of the world’s leading centres for research and development in bioscience. The industry generates £3.3bn a year in revenue and employs 55,000 people. Aileen Allsop, vice president of science policy in research and development at AstraZeneca, said the general standard of science graduates was inadequate even for the group’s graduate training scheme. “There are usually shortcomings, their maths is not strong, or they have done little practical work”. Lynn Tomkins, director of policy at Semta, added that half of those who did graduate in science were not going into the relevant industries - “they’re good project managers, they are quite analytical. The City, for example, is very good at attracting people because of the rewards”. Further information Guardian 05.02.08
Employers could fund 20,000 degrees in 2010; John Denham, the secretary of state for universities, believes that employers will increasingly provide funding for degree courses. More degrees will be tailored to employers’ needs, which will result in a rise in the number of scaled-down two-year honours degrees and vocational foundation degrees. In 2008-09, 5,000 degree places are likely to be funded by employers and this number could rise to 20,000 within three years. The vision is contained in a letter from John Denham to the Higher Education Funding Council laying out future priorities. Further information Times 29.01.08
UK as most popular destination for overseas students?; despite its food and weather, Britain is beginning to topple the US from its position as the most popular place for overseas students to study according to a survey by the International Graduate Insight Group. The survey, which covered 11,000 overseas students from 143 countries, says that prospective students found the UK is safer than the US, has respected higher education institutions and, amazingly given the complaints about British immigration control, is easier to get a visa to study in. The survey is welcomed by the UK higher education world, which has become anxious that the number of foreign students coming to the UK was starting to level off as the competition from countries like Australia grew fiercer for the £60bn international student market. The current number is 385,000 but the latest statistics show a nearly eight per cent rise in applications to UK universities. However Dominic Scott, director of the UK Council for International Student Affairs, says that the US will be difficult to shift from its position because of the generous scholarships and grants on offer at US institutions. He also points to the cost problems in the UK with the strength of sterling making the cost of living one of the highest in the world and although the UK is an easy place to obtain a student visa countries like China, India, and Singapore are seen as even easier. The survey shows that the UK is seen as the hardest place to get work as an overseas student after the degree. The rules limiting overseas students from working in the UK for more than a year have been eased to two years from March 2008 and it is hoped that this will boost overseas student numbers. Further information Independent 31.01.08
Universities urged to back academies; the government is mounting ever greater pressure on universities to sponsor academies as a way of helping to reduce class bias in higher education. The prime minister has put the universities at the heart of plans to expand the programme of privately run but publicly funded academy schools saying he wanted every university to pair up with a struggling school. Bill Rammell, the universities minister, told a Guardian Higher Education conference that universities are still dominated by middle-class students: “The proportion of young people from the higher socio-economic groups who get a higher education is over 43 per cent. The proportion from the lower groups is just under 20 per cent. On average in non-Russell Group universities, one in three students comes from one of the lower socio-economic groups. In the Russell Group, it’s one in five. And at Oxford and Cambridge, it’s one in ten”. The minister said that the National Council for Educational Excellence was preparing options and recommendations for universities. At the end of 2007 21 universities had set up programmes sponsoring, co-sponsoring or partnering with academies, with more in the pipeline. The prime minister has said that to encourage universities, the government will be removing the £2m minimum requirement. Further information Guardian 11.02.08
Secular groups attack plans for Cathedral academies; plans for Britain’s cathedrals to create city academy schools have been attacked by secular campaigners who are complaining that they offer the church “subsidies on a breathtaking scale” without helping young people from deprived areas. Up to 40 such academies aiming to boost interest in choral music and “transform musical education” could be sponsored under the scheme, part of the Church of England’s target for creating 100 academies. Most would be created by converting existing cathedral schools with Bristol Cathedral School, which provides choristers for the cathedral and charges fees of around £9,000 a year, due to be the first cathedral academy in September. Fees will be scrapped and the school will be able to choose 10 per cent of pupils on musical aptitude. Stephen Parsons, the school’s chair of governors, said: “It will be absolutely fair. There’s no exclusion on ability or geography. It will be an open entry system. We will use non-verbal reasoning tests to get a good spread of abilities from the lowest to the highest”. Nine other cathedral schemes are under discussion. According to Frank Field MP, the chair of the Cathedrals Fabric Commission, possible locations could include Chester, Salisbury and Southwark. Some 12 Church of England academies are open, with a further 18 at an advanced stage of planning. There are also 20 other academies backed by other religious sponsors. Guardian 04.02.08
85 per cent of poorer white boys fail to get five GCSEs; figures released by the Department for Children, Schools and Families show that the vast majority of white working class boys are leaving school with too few qualifications and that white boys in deprived areas are the lowest performing group of pupils in schools after the small population of traveller children. The actual figures are that 85 per cent of white boys from poorer homes fail to get five good GCSEs including English and maths compared to nearly half of their wealthier classmates. Slightly more than 17 per cent of black Caribbean boys achieve five good GCSEs, and 51.5 per cent of Chinese boys do - the highest scoring for any ethnicity. Further information Guardian 01.02.08
More than 30,000 pupils leave at 16 with no qualifications; parliamentary answers obtained by the Conservative Party shows that the level of underachievement at school is far greater than previously thought and raises issues about raising the school leaving age to 18. Michael Gove, the Shadow Schools Secretary, said that the government’s practice of including teenagers with one GCSE pass at Grade D or below was creating a rose-tinted view of academic achievement. He doubted whether any pupil or employer believed that any GCSE lower than a C had little value in the jobs market. He said that many of those not gaining GCSEs had become disengaged from school at a very young age. The figures obtained by the Conservatives show that 12,159 pupils in year 11 were not entered for any GCSEs and a further 19,110 failed to gain a single GCSE; 9,881 achieved GCSE at grade D or below. Times 08.02.08
London launches £200-a-day ‘dirty lorry’ entry charge; owners of the worst polluting lorries, buses and coaches that fail to meet EU pollution standards now have to pay £200 to enter London. The new Low Emission Zone is being enforced using fixed and mobile cameras that read number plates in the zone and check them against a database of registered vehicles that meet emissions standards, have paid the daily charge, or are exempt. Transport for London predicts that the system, the first of its kind in the UK, will mean better air quality for 170,000 Londoners. It says that around 12,500 vehicles out of the 120,000 lorries and buses that use London roads will be affected. The zone does not apply to motor cars or motor cycles. Freight industry groups warned about the effect on small operators. Further information Guardian 04.02.08
Former Shell chairman calls for ban on cars that do less than 35mpg; Sir Mark Moody-Stuart, former chairman of Shell and currently chairman of Anglo American, has called on the EU to ban the sale of cars that do less than 35 miles per gallon. Reacting to the comments of the Society of Motor Manufacturers and Traders who claim that the drivers of the most polluting cars already pay extra through road tax and petrol duty he said that this simply allowed rich people to avoid their responsibility. Sir Mark pointed out that: “When we eliminated coal fires in London we didn’t say to people in Chelsea you can pay a bit more and toast your crumpets in front of an open fire- we said nobody, but nobody, could have an open fire”. His rule would only apply to new cars and he acknowledged that car-makers would be able to improve the efficiency of many sports cars but they would struggle to get some heavy, luxury cars to qualify. He said that he was confident that the market would provide solutions if governments demanded it of them. BBC News Online 04.02.08
Airbus predicts that number of aircraft will double in two decades; Airbus was warned that more runways will be needed to accommodate a doubling of the global aircraft fleet by 2026. It says that 28,534 passenger and freight aircraft will be flying in two decades time- double the current total of 13,284. It says that Britain will the third largest customer for new aircraft after the US and China. They say that soaring fuel costs have helped to propel the figure upwards as airlines will accelerate replacement of older aircraft, which consume expensive fuel more voraciously than new ones. In fact it believes that nine out of ten aircraft now flying will be decommissioned by 2026. It points to Airbus’s own A380 superjet, which carries hundreds more customers and burns 20 per cent less fuel than its predecessors. However the report does acknowledge that aviation’s contribution to global carbon dioxide emissions will grow from two to three per cent over the period- a figure disputed by environmental groups who say the figure will be even higher. Airbus also raises the prospect of aircraft being powered by alternative fuels by 2026. The debate over the environmental benefits of biofuels has become increasingly heated, while there are doubts over the ability of biofuel producers to meet the aviation industry’s needs. National Express, the rail and coach group, has already pulled out of one biofuel trial. Further information Guardian 08.02.08
Parisian bike hire scheme comes to London; as part of what he describes as “a £500m transformation of cycling in London” the mayor has announced that a London version of the Paris free bicycle hire scheme is to come to London in 2010. Unlike Paris, where the scheme is funded by the sale of advertising space, the £75m costs of the London scheme will be largely provided by London council tax payers, although some advertising may be sold on the bicycles themselves. The bicycles will be free for the first half-hour to people who pre-register and agree to pay an automatic fine of £100 if they do not return the bicycle, it will then by £1 for each additional half-hour. David Brown of Transport for London said that it intends to start with 6,000 bikes in the summer of 2010 but that would quickly double if demand warranted it. Further information Times 12.02.08
Camden Town fire hits 300 businesses; up to 300 stallholders and employees in the Canal Market as well as the Hawley Arms pub have been badly hit by the huge fire that started on 9th February. The Canal Market is one of six markets around Camden Town and Camden Lock. According to Camden Town Unlimited- the business improvement district body for the area- the fire has hit 1-9 Chalk Farm Road, the Canal Side Market and around to and including the Hawley Arms. Some of the markets are still open for business including Camden Lock, the West Yard, and the Middle Yard. Further information BBC News London, Evening Standard 11.02.08
City aims to make Cheapside a major retail centre; the Times describes the City of London’s multimillion pound gamble that Cheapside can become a shopping attraction to rival Bluewater or Brent Cross. With St Paul’s Cathedral at one end and the Bank of England at the other, Cheapside is at the bustling heart of the City from Monday to Friday but is dead at weekends. However by 2012 the retail space on AND round Cheapside will increase by 1.5m sq ft, 44 per cent of which will be entirely new, an increase equivalent to the new White City shopping centre. It is expected that there will be 167 new retail units. The City Corporation has joined forces with big developers such as Land Securities to create the Cheapside Retail Initiative to market the area as a world-class shopping and leisure area. Land Securities are behind the £500m One New Change scheme next to St Paul’s on the former Bank of England site. It will have 220,000 sq ft of new retail space on three levels and should be ready by 2010. Land Securities say that they have signed “some household names”. It is planned to make all the transport links used during the working week available at weekends and there will be free parking. Under the London Plan the City’s working population is due to increase by 50,000 to 400,000 (this is a forecast made before the current financial squeeze). Another stimulus is the Millennium Bridge, the pedestrian river crossing that attracts 10,000 visitors a day. Further information Times 04.02.08
Boris pledges shake-up for ‘rigid’ London Plan; Boris Johnson, the Tory candidate in the 1st May election for London Mayor, has promised an overhaul of the Mayor’s development strategy claiming that the London Plan is too rigid and is slowing down redevelopment. He said: “Part of the problem of the one-size-fits-all London Plan is that we cannot tailor projects for individual areas. For boroughs like Newham, the rigidity of the rules, such as affordable housing quotas, is preventing real regeneration”. Johnson also said that the mayor’s new strategic powers, which come into force in April, were “probably, too much”. He plans to redress the “unpredictability… and lack of section 106 agreements”, adding that he favoured a “tariff system for concentrated developments”. Estates Gazette 26.01.08
BA to fly to New York from London City; British Airways have announced that they are to launch a business-only service from London City airport to New York in 2009. Bankers and lawyers in the City and Canary Wharf will be offered a 15-minute check in, door-to-door service using a 32-seat Airbus A318 twice a day. However because the A318 will be unable to take off at City Airport with a full fuel load there will be a stop on the west coast of Ireland to refuel. The news comes after BA announced it was going to start services to the USA from airports in mainland Europe. Further information Times 02.02.08
GE Money to move global HQ to London; General Electric is moving the headquarters of its consumer finance division from Connecticut to London in what is seen as underlining the global nature of GE Money and also a boost for the UK capital in its challenge to New York as a global financial centre. GE Money origins date back to the 1930s when it was set up to provide credit for cash-strapped Americans to buy GE appliances. Today it has revenues of $25bn a year and $200bn of assets to be the world’s largest provider of private-label credit cards. The announcement coincided with the appointment of London-based William Cary as chief executive. Another of GE’s six divisions dealing with healthcare has been based in Britain since the company bought Amersham in 2004. Further information Financial Times 08.02.08
Damien Hurst to open on Marylebone High Street; Damien Hurst has chosen a new development on the corner of Hinde Street and Marylebone High Street to launch his first retail outlet to be called “Other Criteria”. The shop will sell art, books and clothing. Estates Gazette 02.02.08
Canadians eye British Council HQ; faced with pressure from the government to make efficiency savings the British Council has held discussions with the Canadian government about subletting its 80,000 sq ft London office next to Admiralty Gate as the new Canadian High Commission. The Canadians lave been looking for a new building following the decision to put their existing office in Grosvenor Square on the market for £300m. Spring Gardens has the virtue of being close to its cultural centre at Canada House in Trafalgar Square. The Canadians have also held talks with some of the likely bidders for the Crown Estate’s Metropole building in Northumberland Avenue. Estates Gazette 02.02.08
Latest London fashion star to move to New York; Jonathan Saunders has announced that he is to follow in the footsteps of other British fashion designers such as Matthew Williamson, Luella Bartley and Alice Temperley and switch his allegiance from London to New York. Saunders describes his switch as a “natural progression” and goes on to say that there is a lot of editorial and financial support for New York fashion week that London can not compete with. However despite Saunders’ move, there is evidence that the traffic is no longer one way. Luella Bartley returned to London last year and that her sales have risen since then. Whilst not ruling out returning to New York she says: “I was really nervous about coming back to London, not just because of how it might affect the business, but also because London is so much more creative as a fashion capital than New York that people are really tough on you. But I enjoyed myself so much more- it felt like a real homecoming”. London has been boosted by a dramatically increased funding package of £4.2m over the next three years from the London Development Agency. Jaeger boss Harold Tillman is succeeding Stuart Rose as chairman of the British Fashion Council and Jaeger was making its debut at the London week, being held 10th-15th February with a collection designed by Karen Boyd of the 1980s design duo Boyd and Storey. Further information Guardian 02.02.08
Young British designers aim to combat the downturn; Sarah Mower of American Vogue previews the London Fashion Week. She says that previous economic bad patches have resulted in a cull of the youngest, weakest and most dispensable designers and that suddenly there is a chill wind blowing through fashion retailing with the result that the massed talent of Hackney, Dalston, Shoreditch and King’s Cross may well feel that they’re designing for their lives. Already some American buyers have cancelled saying that London is just too expensive. However the British Fashion Council says that journalists are coming from China, Russia and other emerging markets and buyers are coming from Europe and the Middle East. She also says that thanks to their training at Central St Martins the new set of young London-based designers are super-careful as well as creative. In the past two years this multi-talented cohort-, which includes Scots, Serbians, Canadians, Greeks, Australians and Scandinavians-, has generated more concentrated young energy than New York, Milan or Paris. But the difference is that this generation was born into global awareness and finds itself working in the most polyglot, outward-looking, internationally connected city in the world. Further good news is that, from the risk-limitation point of view, is that they are not wholly dependent on the fluctuating US economy with Russians, Chinese, Koreans, Greeks and shops from the Middle East turning up to place orders and they’re not looking for anything wishy-washy. The editor-in-chief of Russian Vogue says that “there’s something very quirky and special about the English that they like” whilst a buyer from Lane Crawford, with branches in Hong Kong and Beijing, says, “I feel very strongly that the creativity from London needs to be supported. The talent pool is incredible and over the years I’ve seen many designers develop unique looks that women find approachable”. Observer 03.02.08
Aquatic Centre ‘has almost trebled in cost’; the Evening Standard claims that when the contracts are signed next month for the aquatics centre for the 2012 Games, the costs will have trebled from the initial estimate of £75m – although much of this can be explained by VAT and inflation. However the striking design by Zaha Hadid has also contributed with the wave-shaped roof expected to cost £60m alone. The 22,500-seat building will consist of two 50-metre pools and a diving pool. However Olympic chiefs have compared the building with the Sydney Opera House in terms of complexity and allure, and insist that the extra cost will be vindicated because the centre will have greater “allure” than the main stadium. Evening Standard 30.01.08
LDA plots to move film studio to Olympic media centre; the Three Mills Studios, the film and television studios behind Lock, Stock and Two Smoking Barrels, could become the first post-Olympics tenant at the 1.3 sq ft media centre being built in Hackney. The studios are currently located in Newham, which, like the media centre, is owned by the London Development Agency. The Agency wants the studios to provide a 300,000 sq ft anchor for the International Broadcast Centre after the 2012 Games. Estates Gazette 02.02.08
BA becomes fourth major sponsor; British Airways have paid £40m to become a major sponsor of the 2012 Games. The airline supported the bid to host the games and will fly the UK teams to the 2008 Beijing Olympics and the 2010 Winter Games in Vancouver. They become the fourth sponsor alongside Lloyds TSB, EDF and Adidas. Evening Standard 01.02.08
Candy Brothers get the keys to Chelsea Barracks; a low-key military ceremony marked the handing over of the 12.8-acre Chelsea Barracks by the Ministry of Defence to the Candy Brothers. The Monaco-based brothers, who are behind some of central London’s most expensive developments such as One Hyde Park, have bought the site for £959m in a joint venture with Qatari Diar, part of the Qatar government’s investment arm. The concrete barracks, home to the Coldstream Guards for more than 40 years, will be demolished and replaced with luxury apartments. Rogers, Stirk, Harbour and Partners have been appointed to undertake the masterplan for the site. Planning proposals are subject to agreement from Westminster planners, but it is understood that the developers hope to create a link to another exclusive development site they acquired last year - the Grosvenor Waterside, a hidden Victorian dock next to Chelsea Bridge. Unusually the new development, consisting of 1,500 homes, will include some affordable housing. Further information Independent 01.02.08
Southwark approves second tower for Blackfriars; following the granting of planning permission for a 52-storey residential tower at One Blackfriars Road, Southwark Council has now given permission for a second 42-storey residential tower on the neighbouring 20 Blackfriars Road site. It has given permission to Israeli investor Gill Levy for 450,000 sq ft mixed-use scheme designed by Wilkinson Eyre, which in addition to the residential tower, will include a 23-storey office tower as well as shops. The new development will pay £5.9m in section 106 payments covering local education facilities, healthcare, road improvements and the renovation of Christchurch Gardens. Further information Estates Gazette 26.01.08 S
outhwark loses senior property figure; John East, head of planning and transport at Southwark Council for the past three years has left to join Savills. His resignation follows the departures of Chris Horn, project director for the £1.5bn regeneration of the Elephant & Castle; Paul Evans, strategic director of regeneration; and councillor Richard Thomas, executive member for regeneration. The departures have sparked fears about the local authority’s management of some of London’s most high-profile regeneration schemes including the Elephant, the Shard of Glass tower, and the £200m Potters Fields residential development. Earlier this month Southwark admitted that due to a lower than expected government grant the regeneration plans for the Aylesbury Estate has been delayed and there is an ongoing dispute with developers Berkeley over Potters Fields. Estates Gazette 02.02.08
Waitrose to lead redevelopment of Hammersmith town centre; despite fierce competition from Tesco, a consortium led by Waitrose and including Grainger and Helical Bar has won the battle to redevelop the centre of Hammersmith with a £110m scheme which will feature 290 homes, shops, cafes and restaurants as well as a superstore. Ugly and outdated council buildings around the town hall will be demolished for the scheme, which will also include the creation of a new square in front of the town hall and a bridge to connect King Street with the riverside, which is currently cut off by the A4. Waitrose’s plans will go out for public consultation before a formal planning application is submitted in the autumn. Further information Evening Standard 06.02.08
Dubai and Libya buy Metropole building; the Crown Estate’s Metropole building in Northumberland Avenue has been bought for £130m by the Dubai Investment Trust and the Libyan fund LIFCO. The funds, with International Hotel Investments, which runs the Corinthia hotels group, will transform the 400,000 sq ft building into a five-star, 283-bedroom hotel and residential scheme. The consortium will refurbish rather than rebuild behind the façade, along with the neighbouring 10 Whitehall Place. Estates Gazette 09.02.08
Thornfield plan another Smithfield development; as the inquiry into Thornfield’s proposed redevelopment of the Smithfield General Market closed it emerged that Thornfield also plan a 200,000 sq ft redevelopment of the adjacent Caxton House. A pre-marketing campaign has started for the new scheme to be called Charterhouse Place. The inquiry was notable for a number of clashes between Thornfield and English Heritage, one of which was the fact that Thornfield owned the NCP car park, which runs under Caxton House and Smithfield Market. Estates Gazette 02.02.08
grapevine is produced twice monthly (except in August and December when there
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Next issue on 28th February 2008
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