Are we at the top of the economic cycle? Gabriel Rozenberg examines whether the UK has reached the top of the economic cycle. From the roaring Chinese stock market to the scout hut in Willesden that was sold in May for £400,000, cheap money is gushing into asset markets everywhere and driving an unprecedented period of global growth. On the surface Britain’s economy is experiencing the longest period of sustained growth since records began. However tighter interest rates raised in response to unexpectedly high inflation, and a subsequent economic slowdown could have knock-on effects. The “China effect”, which has kept prices in the West low, is on the wane as China struggles to rein back its own inflation. Equally the Bank of England, with its predictions of economic growth, looks out of kilter with the more pessimistic view of City analysts. They fear that by clamping down on inflation the Monetary Policy Committee is risking a sharper slowdown in output than it has allowed for. Equally there are fears that acquisitions and mergers that have been fuelled by cheap credit are looking increasingly questionable. Ian McCafferty, economic adviser to the CBI, believes that: “We’re probably coming to the end of that decade of easy money”, and that there will be more volatility in the equity markets in the future. Times 04.06.07
London house prices continue to grow; the cost of the average London home has risen to £343,508, compared to the national average of £200,415, according to the latest FT house price index. The figures, which are based on Land Registry data for England and Wales, indicate the growing gap between prices in the capital and in the regions. Despite four increases in interest rates since August 2006, the London property market is still hot in contrast to the rest of the country. Peter Williams, chairman of Acadametrics, the consultancy that produces the FT index, said London prices were increasingly out of step with the rest of the country. “It is the material gap between London and everywhere else that remains the most notable feature of the current market with all that is implied for labour mobility, recruitment and retention”. Further information - Click here Financial Times 09.06.07
Private equity leader ponders tax status; Nicholas Ferguson (pictured left), chairman of SVG Capital and one of the top figures in the UK private equity industry, has criticised tax rates that leave buy-out executives “paying less than a cleaning lady”. Rules on capital gains tax (CGT) in the UK allow executives at private equity firms and some hedge funds to enjoy lower tax rates than most other people, often only 10 per cent. This anomaly has been the basis of the attack on buy-out firms by trade unions. “I have not heard anyone give a clear explanation of why it is justified”, said Ferguson. His comments come just before five of Europe’s top buy-out executives are to face the Commons Treasury Select Committee. The Treasury recently launched a review of its CGT rules and the issue has also attracted similar protests in the US, which has a similar system for CGT. At the same time Gordon Brown has made it clear that any clampdown on the tax breaks enjoyed by private equity should not hit other business taxpayers. An insider told the FT that even though there was a “quite wide consensus” growing round the view that the 10 per cent rate enjoyed by private equity partners is inequitable, Brown is not going to change the whole regime because of this. He would be asking the next chancellor to report back by the autumn on potential changes to the tax breaks of private equity executives and their companies. Further information - Click here Financial Times 04.06.07, 11.06.07
Britain to remain in manufacturing’s top eight; a study of the world’s 25 largest manufacturing countries by Global Insight, a US economics consultancy, predicts that despite slowing growth Britain will remain in the top eight manufacturing nations. This is despite the fact that only four countries - Italy, Australia, the Netherlands and Japan - are likely to have lower manufacturing growth rates between 2006 and 2011. However it does predict that Britain’s share of global manufacturing output will fall from 3.4 per cent in 2006 to three per cent in 2011 and 2.2 per cent in 2025. The UK was sixth behind the US, Japan, China, Germany and France in 2006 but will be passed by South Korea and India by 2025. The forecast also claims that China will become the lead manufacturing nation by 2020 - a position it last occupied around 1830. Having accounted for 4.6 per cent of global output in 1995 and 12.1 per cent in 2006 it will rise to 25.9 per cent in 2025. Further information - Click here Financial Times 11.06.07
Brown makes first staff appointments; Gordon Brown has announced his first major staff appointments for Downing Street when he takes over as prime minister. The announcements have been made by Sir Gus O’Donnell (pictured right), the cabinet secretary, with the intention of reinforcing the impression that the new prime minister will draw on civil service expertise, and that unlike Blair’s informal decision-making process, the civil service is now back at the heart of government. Simon McDonald, who currently heads Iraq policy at the Foreign Office, will become chief foreign policy adviser and Jon Cunliffe, second permanent secretary at the Treasury, will become the main adviser on the European Union. Sir Gus also announced that a new senior civil service post will be created within the Cabinet Office, to ensure that the operations of all government departments are coordinated. A Brown insider emphasises however that the new post will ensure that “you make a reality of cabinet government and the cabinet committee system. This will not be a centralising role but one that makes sure cabinet government works”. The Independent sees the new post as an answer to Lord Butler’s criticism about “sofa-style government” where a few key ministers made decisions informally. Michael Ellam will be Brown’s official spokesman and Tom Scholar his chief of staff. Financial Times 06.06.07, Independent 07.06.07
Fears about future of ONS; the FT says that big cuts are being made by the ONS as it struggles with a budget squeeze and its relocation from London to Newport in south Wales. The cuts include a reduction in the sample used to collect key labour market data. Many of the senior figures in UK statistics are warning about a repeat of the 1980s when, amid a previous round of cuts, data quality suffered and Nigel Lawson, then chancellor, failed to spot the coming economic boom- with disastrous effects on inflation. The Bank of England has already gone on record to express its concerns. Another major problem is that all but a dozen staff will make the move to Newport. Despite hopes that the remaining staff would have a sizable office in London, they are now camped at government offices until the move is completed in 2010. Karen Dunnell (pictured left), the current national statistician, told MPs that she expected only 10-15 per cent of staff to relocate. She conceded that the decision to close the London office was “very difficult and very unpopular”. Her implication is that 700 of the 800 staff that were in London last year will be leaving. She said that she was happy with their replacements but many others have expressed deep concern - especially as it is felt that the universities do not produce the standards needed. Financial Times 31.05.07
Accounting rule changes may shrink PFI deals; privately financed public sector projects are likely to get smaller in size and nature after the government switches from UK to international financial standards next April. This will have the effect of switching some current private finance initiative (PFI) projects, which are currently off-balance sheet on to the government’s books. Although on-balance sheet projects can be more flexible they have the effect of less risk being transferred to the private sector. This could lead to shorter contracts of perhaps 20 years and the public sector making capital payments on construction projects as they go along rather than the private sector providing all the capital. This could, in turn, reduce the demand for equity. The result may be a new form of hybrid public-private partnership where the public sector would face higher capital payments but long-term project costs would be lower. Work is still under way to adapt what are essentially private sector accounting standards to the public sector and a clearer picture should emerge in the autumn. The CBI has urged Gordon Brown to resist calls to abandon PFI, which would reduce innovation and long-term planning. Financial Times 09.06.07
Fertility rates hit highest level for 26 years; women are choosing to have more babies than at any time since 1980, according to official figures from the Office for National Statistics which hint at the first baby boom of the 21st century. The fertility rate- the number of births per woman- rose from 1.8 babies per woman in 2005 to 1.87 in 2006- the fifth annual rise in a row and the most babies born in a single year since 1993. The 26-year high in the fertility rate suggests a new baby boom, but is still tens of thousands of children short of the post-war baby boomer years. Economists welcomed the news saying that low birth rates are storing problems for the future when there will be too few tax-payers to support an ageing population. The figures suggest that older mothers and migrant families are increasingly making up for younger British-born women choosing not to have babies. Further information - Click here Guardian 08.06.07
Kelly says translations do not help integration; Ruth Kelly (pictured right), the secretary of state for communities, has called on local authorities to encourage immigrants to learn English instead of routinely translating documents into foreign languages. She said that translation was being used “too frequently” and could become a “crutch” which could discourage integration. She was anticipating a report from the Commission on Integration and Cohesion, set up after the 7/7 bombings, which will address translation services. It is estimated that the NHS, the courts and local authorities spend more than £100m each year on translations. Further information - Click here Independent 11.06.07
Dell tells its suppliers to turn green; Michael Dell (pictured left), chief executive and founder of Dell, has announced that the company is to discriminate between its suppliers on the basis of how green they are and will blacklist those who do not curb their impact on the environment. Despite recent losses in market share to Hewlett-Packard Dell is the second-largest computer company and a notoriously fierce negotiator that wields tremendous influence among suppliers. His comments follow a trend for green thinking in the computer industry, which is estimated to account for two per cent of the world’s carbon emissions. Bill Gates, the co-founder of Microsoft, has recently invested in ethanol fuel technologies, whilst the founders of Google have provided funds for solar power research. Further information - Click here Times 06.06.07
Man Group to sponsor Oxford maths institute; Man Group, Europe’s largest hedge fund group, is to sponsor a new institute at Oxford University as part of its efforts to cope with a shortage of mathematicians ready to work in the City. Man will pay £10.45m to fund the Oxford-Man Institute of Quantitative Finance for five years, plus a £3.3m charitable gift to endow the Man professor of quantitative finance. This is only the second time that a hedge fund has endowed a chair, after the £3.3m donation from Winton to establish a professor for the public understanding of risk at Cambridge. Several hedge funds have research bases in Oxford. Further information - Click here Financial Times 07.06.07
Marks and Spencer make more green commitments; the 2007 annual corporate social responsibility review produced by Marks and Spencer alongside its annual report and accounts offers a new list of targets to reinforce its green credentials. The 100-page report makes 100 commitments to tackle climate change, cut waste, increase sustainability, encourage healthier lifestyles and make M&S a “fair partner” to do business with. Many of the commitments have been published before but amongst the 40 new ones are increased use of rail freight, phasing out pesticides, installing bicycle facilities, recycling plastic coat hangers and better densities for its chickens. It is working with the Carbon Trust on a scheme to spell out the carbon cost of products. Further information - Click here Guardian 07.06.07
Croydon designs an urban regeneration vehicle; Croydon Council is embarking on a plan for a long-term partnership with a developer to regenerate the town centre and the wider borough, which could establish a formula for other councils. In its first phase the urban regeneration vehicle (URV) will develop five council-owned sites. The developer will then be asked to match the value of these assets in cash. When the five projects are complete, including 200,000 sq ft of new council office space at College Green, the URV will buy sites for the regeneration of the town’s district centres as well as the town centre. These will be developed through the developer’s cash contribution. A preferred bidder will be selected in February but a shortlist of six to eight bidders will be selected by 10th July. Estates Gazette estimates that the five sites are worth £89m and says that the proposal sounds like a good idea - but with caveats. First, it may help ameliorate the view that all developers are profiteering buccaneers content to disfigure your skyline for a quick buck. Other benefits could be that design credentials could play a big part in selecting a partner and that it will encourage a holistic strategy rather than the usual piecemeal approach. It will also forge a public/private team that can learn to co-operate and work more speedily and efficiently to achieve the stated aims of the URV over its planned 15-year life. Estates Gazette 02.06.07
London becomes a social networking hub; the FT looks at the market for social networking sites in the light of the recent sale of London-based Last.fm for £141m to CBS, the US television network. Last.fm is the second big UK social networking sale, the first being the purchase of Friends Reunited by ITV for £120m in December 2005. However the FT thinks that it will not be the last and that the UK is starting to pull its weight as a centre for social networking websites. Unlike the previous dotcom boom, the new sites do not need sophisticated technology. Thanks to the development of internet advertising models, such as Google’s Adwords, it is comparatively easy for social networking sites to make money from an early stage. A 15-year-old with just £200 of wages set up PPLParty.com, a clubbing-related site, from a part-time job. It now has 320,000 users. Faceparty.com has grown to 5.2m users simply on advertising and revenue revenues - it has never needed to raise money from venture capital investors. The presence of dotcom millionaires willing to act as angel investors is furthermore making London an important hub for developing social networking sites. Financial Times 02.06.07
Awning makers to benefit from smoking ban; the ban on smoking in public places from 1st July is causing problems for breweries as well as employers, but according to the FT it is bringing increased trade for the manufacturers of made-to-measure awnings for pubs as well as the makers of nicotine replacement products. Hillarys, the made-to-measure blinds and shutters retailer, says that it has seen a surge of inquiries for made-to-measure awnings for pub gardens and outside spaces. Other businesses that are benefiting are patio heater manufacturers and retailers. However warnings are going out that the average patio-heater gives out more emissions than the average Chelsea tractor and that if every pub buys two patio-heaters the overall effect will amount to the carbon emissions of a small city. According to Mintel sales of anti-smoking products have risen by 50 per cent in the past five years and they envisage similar growth in the next five. However PriceWaterhouse Coopers is forecasting that 12 per cent of pubs across the UK will cease trading in the next four years as the effects of the nationwide smoking ban take effect. Financial Times 04.06.07, Evening Standard 11.06.07
Summer enterprise camps are shelved; following a very high profile launch by the chancellor, the Treasury has admitted that there are “no plans” to set up a network of enterprise schools across Britain this summer. This is despite an earlier pledge to “roll out” the scheme this year. Ministers have admitted that just 236 businesses have signed up to help with the camps. Initially Gordon Brown had said that 3,000 companies would be involved. The summer camps were first announced in 2005 and confirmed in the 2006 Budget. Eleven trial residential and non-residential courses were held last summer and were popular with teenagers, with many over-subscribed. However in a written parliamentary answer Jim Knight, the schools minister, said: “We have no plans at present for a second round of such enterprise summer schools in 2007”. He said that they were “considering options” for future years. The Treasury later said that enterprise would be taught as part of the school day. Sunday Times 10.06.07
Tories plan to streamline tax system for small firms; George Osborne (pictured left), the shadow chancellor, has announced that the Tories are to undertake a major study into the tax burden on small businesses. Grant Thornton has agreed to carry out research on aligning the administration of PAYE and national insurance, which are currently calculated in different ways and over different periods, creating enormous and unnecessary red tape according to Osborne. He went on: “the objective is to make it easier for businesses to offer flexible working. We are not talking about merging the national insurance and income tax systems: what we are talking about is how to bring their administrations together so that all businesses get a break”. Independent on Sunday 10.06.07
NHS Trust launches first commercial venture; the first company to be owned by an NHS Trust is to be launched in Wiltshire next week. Odstock Medical, which makes electronic devices to help disabled people to walk, will be 68 per cent owned by Salisbury NHS Trust, 18 per cent by its hospital charity, 12 per cent by the staff, and two per cent by Bournemouth University. Odstock has 12 staff and is based in the old burns unit of Salisbury District Hospital. Further information - Click here Financial Times 11.06.07
MPs warn that RDAs are ‘diluting UK brand’; a warning that Britain’s drive to attract overseas investment is being undermined by a “plethora” of regional bodies competing for business across the globe, has been issued by the House of Commons Select Committee on Trade and Industry. In a report on the marketing of the UK the committee says that the regional development agencies (RDAs) were wasting money, confusing overseas businesses and “diluting the UK brand” by setting up a “bizarre” network of 42 overseas offices to promote their regions to overseas business leaders. They go on to say that they are “deeply concerned” about the role of the RDAs, as figures show that eight of them have offices in the US, seven have an outpost in Australia and seven have staff based in Japan. They warn that the efforts of UK Trade and Investment (UKTI) might be damaged by the clamour of different regions competing for business. They also criticise the Treasury for imposing too many changes in strategy and structure on UKTI and warn that the new government under Gordon Brown might lead to “further damaging upheaval”. Further information - Click here Independent 06.06.07
Bridges Ventures raises £75m for second fund; Bridges Ventures, the venture capital fund founded by Sir Ronald Cohen (pictured left) to invest in deprived areas of the UK, has raised £75m for its second fund, outstripping its initial target by 50 per cent. The news is seen as giving the beleaguered private equity industry a welcome break by suggesting that it can be a force for good as well as a profit-making machine. Bridges was originally founded with £40m, with match funding from the venture capital industry and the government. It had two aims: to invest in poor areas or in socially beneficial projects while achieving a rate of return equal to private equity’s historical returns of 12-15 per cent. The new £75m fund makes Bridges the largest investor of its type in the world. Its closest equivalent is the New York City Investment Fund (NYCIF), founded by Henry Kravis, the boss of Kohlberg Kravis Roberts. NYCIF has raised $100m since 1996. Bridges invests up to £10m in any single company and its debut fund has invested in 27 companies and returned about £8m to investors. Further information - Click here Financial Times 11.06.07
Project to target “vulnerable” workers in London and Birmingham; two pilot projects have been launched by the government, which aim to uncover abuses by employers and to offer protection. In London the target group will be cleaners, security guards and caretakers who are not getting their full employment rights. Many people working in these areas are migrants or unskilled workers with poor educational qualifications, earning low wages in part-time or temporary jobs, lacking basic employment protections. Jim Fitzpatrick (pictured right), the employment minister who launched the scheme, said: “Too often people are not aware of their basic rights as a worker. The pilot will help to address this by providing better access to support and information. Employers and workers will benefit from employment information as well as drop-in advice surgeries. Information will be distributed in different languages to benefit as many workers as possible”. Unions and community groups in east London have recently held protests in support of a London-wide campaign for contract cleaners to provide a living wage of £7.05 an hour, sick pay, pension rights, 28 days holiday and union recognition. The TUC have also linked up with business leaders to launch a national commission to investigate the plight of vulnerable workers. Further information - Click here and here for GNN Financial Times 02.06.07
Wasting skills of the disabled ‘costs billions’; a report by the Social Market Foundation says that the wasted talents of unemployed disabled people are costing the economy billions of pounds. Improving the skills of the 6.8m working age disabled could give Britain a £35bn boost. Only half of disabled people are currently in work. Further information - Click here Guardian 11.06.07
Conservatives announce welfare proposals; the Conservatives have announced plans to force the long-term unemployed into work. They plan to use private providers and charities on a “no-win, no fee” basis. Further information - Click here Times 08.06.07
The selection issue is about the dim but rich; following the issue of grammar schools and selective education, Tim Hames says that the row started, and should still be rooted, in David Willetts’ (pictured right) belief that social mobility in Britain is on the decline and with it, the ideal of meritocracy. David Willetts accepts the conventional explanation that the massive expansion of higher education has not included the working class. There were 220,000 students attending university in 1974. Thirty years later there are more than 1.6 million. Yet it is those born into comfortable households who have secured these new places (especially the girls) and benefited from the economic rewards from them. This implies that the principal challenge of social mobility today is less how to raise up the bright but poor (though this is a real challenge) than how to force down the dim but rich. Hames wavers from the Willetts argument however by suggesting that the demise of grammar schools was a social and intellectual catastrophe. The grammar schools, have to all intents and purposes, been replaced by independent schools where it is not only the ability to think but the capacity to sign a cheque book that is crucial. Times 04.06.07
How to make selections; the Times looks at how selection policies can work for secondary schools. It points out that since the Greenwich judgment 20 years ago local authorities have not been able to preserve their schools solely for their residents. As a result families have been able to move to neighbouring counties and move bright offspring across the border. This is one of the reasons why schools are not representative of their catchment areas and why just two per cent of children at grammar schools are on free school meals, when children from low-income families make up 12 per cent of the local school population. So it is not the local population that drives the numbers attending these highly-selective schools but their popularity. While the system depends on parental choice, there will always be too few places at popular schools. As a result, says Professor Alan Smithers (pictured left) of Buckingham University, there will have to be selection - either on academic ability, postcode, faith, a first-come-first-served basis or lottery. He says that the new toughened admissions code is still open to manipulation, and as the academies become more popular they will be increasingly over-subscribed. Times 02.06.07
Interest mounts in purpose-built private school in Docklands; the first private school to be purpose built in London for generations has attracted bids from 29 potential operators in a sign of the growing appeal of the for-profit education sector. The scheme offers a potential solution to two major problems that have faced entrants to the private schools market in London –the cost of land and planning permission. The high levels of interest contrasts with the government’s struggle to find private education providers to take over the running of city academies. The new private school is on six floors of a tower being built as part of Ballymore’s Leamouth scheme at East India Dock in Tower Hamlets. The 1.9m sq ft scheme, which is on the site of the old Pura Foods refinery facing the Dome, includes 1,837 homes, an arts centre, a community centre and flexible workspace for creative industries. The decision to feature a school was to cater for the young families who might otherwise have sought private education outside the area. Ballymore said that in view of the “unprecedented level of interest” they would consider developing more schools, including secondaries, in its developments on the Isle of Dogs, Royal Docks, City fringes and Bishopsgate. Further information - Click here Financial Times 09.06.07
Evaluating the G8 deal on climate change; various newspapers have examined the news that Angela Merkel (pictured left), the German chancellor and host of this year’s G8 Summit, has thrashed out an agreement aimed at reducing carbon emissions. The Guardian remembers that Bob Geldof rated the G8’s agreement on Africa in 2005 as “Ten out of Ten”, but that rings hollow now that several members have reneged on their promises. Merkel sounded almost as triumphant as she announced her deal. The question is whether her judgment will stand the test of time any better than that of Geldof. There are reasons for thinking it might. It represents a change in the US position, which will be hard to reverse. Events such as the floods in New Orleans and the moves being made by individual states such as California as well as businesses such as General Motors have helped to create a tide against which even President Bush can no longer swim. The fact that he accepted the goal of a post-Kyoto treaty organised by the United Nations is especially welcome. However the devil is in the details. The US is only committed to “consider” a 50 per cent reduction by 2050 and the loaded “invitation” to India and China to do their bit, intended as a signal that the US retains the right to walk away unless these other poorer countries are willing to share the pain. Further information - Click here Guardian 08.06.07
#Navarre generates 70 per cent of its electricity through renewals; the Times writes how Navarre, a Spanish region bordering with France, gets 70 per cent of its energy from renewable sources. It hopes to increase this to 75 per cent by 2010 and eventually become a net exporter. Although it is still connected to the Spanish national grid for when the wind does not blow or the sun does not shine, the regional government of Navarre says that its switch to renewable energy could, and should, be copied by entire nations. There are 1,100 windmills in the region of just over 6,000 sq miles, which supply 55 per cent of the electricity. It has also built several photovoltaic solar farms which turn sunlight into electricity, has a biomass plant which generates power from straw, and has “solar thermal” plants that use the sun to heat water and power a generator. The region has mini hydro-electric plants that make use of the rivers, “co-generation” plants to recover energy from industrial sites and a biofuels plant that transforms vegetable oils into diesel. Overall Spain is a world leader in renewable energies - it produces more than 21 per cent from such sources and plans to reach nearly 30 per cent by 2010. By contrast Britain generates just over four per cent of its power from renewables and has a target to reach 10 per cent by 2010. Times 02.06.07
Carbon map of most toxic towns; the Carbon Trust has published the first carbon emissions map of Britain listing 30 towns and cities. The map is intended to encourage homes and businesses to cut their carbon consumption with a particular emphasis on business, where the Trust believes that the sector could do more to reduce the carbon dioxide it puts into the air. Across the country business is responsible for 40 per cent of carbon dioxide emissions but the map shows considerable variations. In Brighton and Southend, the business sector is responsible for 33 per cent of emissions, whereas in Leicester, Sheffield and Norwich that figure is 55 per cent. In terms of simple quantity the highest emitter is London, which produces 50,754,000 tonnes of carbon dioxide annually, compared to 696,000 tonnes from Aberystwyth. Further information - Click here Times 04.06.07
Branson unveils ‘green’ train; Sir Richard Branson (pictured right) has launched an experimental train service using Europe’s first biodiesel train. The six-month trial, which is being run jointly with the Association of Train Operators and the Rail Safety and Standards Board, uses a fuel mix of 20 per cent biodiesel, made from rape-seed, soyabean and palm oil. It needs special refuellling points which have, so far, being installed at Barton-under-Needwood in Staffordshire and Crofton in West Yorkshire. If the six-month trial is a success Sir Richard hopes to extend the use of biofuels to all Virgin trains and make a significant reduction in their carbon emissions. He said that if Virgin could convert its fleet they would cut their carbon dioxide emissions by up to 14 per cent or 34,5000 tonnes - the equivalent of taking 23,000 cars off the road. One of the guests at the launch was Gordon Brown, who Branson challenged to place biofuel, which pays 54.68p duty a litre, on the same tax basis as diesel, which pays 7.69p a litre. Virgin has been given special exemption for the trial and Brown promised to review the situation if the trial was positive. Further information - Click here Independent 08.06.07, Financial Times 08.06.07
London as an Islamic city; Time Out has a special issue devoted to examining the relationship between Islam and London. It says that at the end of World War One, London was the largest Islamic city in the world –containing in its empire 160 million Muslim subjects, 80 million in India alone. Forty years later at the end of Empire, unrest, war and poverty in south Asia led to mass immigration to the mother country and London became a Muslim capital in another sense. According to the 2001 census there are 607,083 Muslims living in London, the majority living in the east of the city. By 2012 the Muslim Council of Britain estimates that the Muslim population of Tower Hamlets, Newham, Waltham Forest and Hackney will be 250,000. Time Out looks at the thorny issue of why Muslim students perform less well than non-Muslim students. In London 37 per cent of 16-24-year-old Muslims have no qualifications (as opposed to 25 per cent for the general population). The picture is even worse for university education. It is argued that this is largely due to social factors such as English not being their first language, encountering racism in their education, and suffering from poverty and poor housing conditions. The Muslim Council argues that Muslim children do better in their own faith schools, of which there are currently 37 Muslim schools in London, of which five are state schools. Time Out 06.06.07
London to switch its lights off; between 9pm and 10pm on Thursday 21st June, many of London’s most famous landmarks, including Buckingham Palace, Clarence House, Canary Wharf, the BT Tower and at least one government department are to switch their lights out to raise awareness of global warming. Lights Out London is based on Earth Hour, a similar, hour-long mass switch-off earlier this year in Sydney that involved 65,000 households and 2,000 businesses and landmarks including the Opera House and Sydney Harbour Bridge. Earth Hour saw energy consumption fall by 10.2 per cent. Lights Out London will be less dramatic as it is planned for the longest day of the year and Capital Radio, the organiser, has refused to move the date although they did agree to delay the event by one hour. Other public buildings and businesses that have agreed to take part include the National Portrait Gallery, Harrods, the Savoy, the Ritz and the National Theatre. Ruth Kelly’s Department of Communities, Local Government and the Regions is joining in and the Department for Environment, Food and Rural Affairs may follow suit. Further information - Click here Observer 10.06.07
‘The Royal Festival Hall is once again something to be proud of’; the reaction to the two-year refit of the Royal Festival Hall has been very positive. The Guardian states that their initial impression is that the refurbishment “is akin to that of an old-master painting lovingly restored to its former glory”. The Economist takes a similar view. Despite its notoriously poor acoustics the hall had assumed a seemingly permanent place in public affection, but within a decade of opening, the building had fallen into disrepair and attempts at a major refurbishment in the 1990s were stalled. The impasse was broken by the arrival of Michael Lynch, the head of the Sydney Opera House in 2002. In response to his finding the building in a deplorable situation in serious danger of losing its international standing, the Economist says that there is no danger of that now after its £111m makeover. Larry Kirkegaard, an American acoustician, has made the concert hall’s sound crystal clear while architects Allies and Morrison, have shifted the offices into railway arches next door. New cafés, shops and restaurants line the riverside in the Festival Square and the Hall’s own restaurant has been restored. The Economist concludes: “The Royal Festival Hall is once again something to be proud of”. Further information - Click here Guardian 30.05.07, Economist 09.06.07
BA concludes labour deal for move to Terminal 5; British Airways has concluded negotiations on the reform of working practices for its 6,600 ground staff at Heathrow prior to its move to the new £4.5bn Terminal Five. The airline has suffered from wildcat strikes amongst Heathrow staff in the past. All its Heathrow operations will be transferred from Terminals One and Four to Terminals Five and Three in four phases between March and October 2008. More than 90 per cent of BA flights will operate from Terminal Five, where it will be the sole airline tenant, with the remainder operating from Terminal Three alongside its partners in Oneworld, most importantly Qantas and Iberia. BA is investing £330m in its move to Terminal Five, which it hopes will give it facilities to rival or surpass those offered by its main competitors Air France-KLM and Lufthansa at their Paris, Amsterdam and Frankfurt hubs. Financial Times 30.05.07
London to displace New York as leading art market? the Independent on Sunday previews the forthcoming art sales, which are expected to be the most expensive London auctions ever. The Sotheby’s show on 19th-20th June will feature Monet’s Nymphas, one of the water lilies series, which has never been seen in public before and is expected to achieve £10-15m although experts say that it could beat the record price for a Monet set at £19.8m in 1988. At the same time Christie’s will be holding an auction on 20th June featuring Lucien Freud’s Bruce Bernard, which is also expected to fetch a record price for a living artist. Other work on sale will be by Warhol, Hockney, Riley, Bacon, Degas and Bacon with a total sales estimate of £474m. London is displacing New York because of the billionaires from Russia, China and India who live in the city and are willing to bid against each other for a once-in-lifetime opportunity. The London art market has surged by 600 per cent since 2002. Independent on Sunday 10.06.07
Westminster says no more statues; Westminster City Council has come to the conclusion that it is awash with statues and has not got room for any more. Over the past 400 years it has accumulated over 300 statues from Charles I and Oliver Cromwell to Captain Cook, Queen Victoria and Eros. The Council has produced a consultation paper that proposes to establish a “saturation zone” centred on Whitehall, where almost half its memorials are based. Officials have also designated Victoria and Grosvenor Gardens as a “stress area”. Under present regulations anyone wishing to raise a statue in those areas would have to wait for ten years after the death of the individual or event before the council would even consider giving planning permission. Now they propose to refuse all applications unless there is an extremely good reason, such as a large-scale disaster. Further information - Click here Times 02.06.07
Islington plan revamp for the Archway; Islington Council is seeking a planning consultant to advise it on the regeneration of eight acres at Archway, N19. The council, which has concluded a consultation on the draft Archway development framework, plans a retail-led scheme on the rundown area at the base of Highgate Hill. They may include a refurbishment of the 17-storey Archway tower. Further information - Click here Estates Gazette 09.06.07
London achieves record coverage for its logo; Naresh Ramchandani states that he is not keen on the “London” typeface, that pink has never been a favourite colour and that he hates it when people leave capital letters off words that should start with capitals, but apart from that, he rather likes the new logo. At least he likes it now. When it was first unveiled he had wanted time to think about it but he felt that he had not been allowed that luxury. There was the mockery in the national press, the 50,000-strong petition to get it changed and Ladbrokes offering betting odds that it would be changed. However he was travelling on the tube reading one of the London freesheets over someone’s shoulder when he glanced at a feature about the Olympic “logo fiasco”. Because the man with the newspaper lingered on that page he was able to contemplate the logo and suddenly realised that its says 2012. It also looks like a cat licking its tail, a bunch of continents and a cubist version of a shot putter. Now he has started to think that the logo might be good, especially in the modern media age where it not only has to work in print but on YouTube and a 12-year-old’s mobile phone. He is now thinking of taking a bet with Ladbrokes because he thinks the logo is a grower. He concludes that some of the hysteria is genuinely taste-based, but that most of it is a rushed rejection of something new. Guardian 11.06.07
Brown worries about potential for spiralling construction costs; speaking at a reception at Downing Street Gordon Brown told sports journalists that controlling spiralling construction costs would be the major challenge facing the 2012 Games. However he moved to assure the journalists that he was fully committed both to the Games and also to sport in general. His concern about construction costs is not related to current progress but to the potential for rising costs when there are so many projects being built, especially in London. This is one of the reasons why he is pondering how the government should oversee the Games. At present it is in the hands of the Department of Culture, Media and Sport (DCMS), who are currently recruiting a senior private sector figure to lead the Government Olympic Executive, which will liaise with the Olympic Delivery Authority. However that may not be enough and consideration is being given to passing the responsibility to a government department with experience in handling major projects or to the Cabinet Office. Insiders stress that they believe that London’s plans need less ‘tweaking’ than was the case in previous host cities. Guardian 11.06.07
Implied land sell off alarms locals; answering a parliamentary question Tessa Jowell (pictured left), the culture secretary, said that the post-Games sell off of the land needed for the Olympics “will aim to maximise land revenues”. Regeneration quotes sources at Newham Council as being extremely concerned that the statement marks a change of government policy. Previously, the government stated that the principle aim of the Olympics was to further the regeneration o0f the Lea Valley area of east London, with £1.7bn of the £9.3bn budget earmarked for infrastructure for the Olympic Park. However a DCMS spokesman denied that the government intended to compromise on regeneration. There is increasing speculation that the DCMS will lose the responsibility for the Olympics once Brown takes over as prime minister. Regeneration 01.06.07
Construction union threatens Wembley-style delays; Britain’s biggest construction union has warned that the building of the Olympic Park and venues for the 2012 Games will be hit with similar delays, wildcat strikes and spiralling costs that plagued Wembley Stadium. The Union of Construction, Allied Trades and Technicians (UCATT) says that it has reached deadlock in talks with the Olympic Delivery Authority (ODA) over UCATT’s insistence that contractors on Europe’s biggest post-war construction project should use directly-employed labour. The ODA has not specified this point in its contract. Alan Ritchie, secretary of UCATT, which represents 125,000 workers, says that the employment model should follow the example of Heathrow’s Terminal Five, which was built on time and on budget using direct employment. The ODA said that it still hoped to reach agreement with the unions in the next few weeks. A spokesman said; “We are committed to ensuring high standards of employment and we are currently in positive negotiations with the construction unions to finalise a memorandum of agreement. It is our intention that the memorandum will include an agreement on maximising direct employment”. Guardian 06.06.07
Times names Forest Hill and Harlesden as good value; the Times names Forest Hill and Harlesden as the latest areas to offer good value for first time home buyers. Forest Hill sits quietly next to high profile neighbours and features Horniman Gardens as one of the capital’s most appealing small parks. The park also features what it deems as Forest Hills jewel in the crown - the Horniman Museum, picked out by Time Out as London’s finest “secret” museum. Despite the common perception that the SE postcodes are the back of beyond it has frequent trains to London Bridge with a running time of 15 minutes with many more services for the short onward hop to Charing Cross and Waterloo. There are also direct services to Victoria taking 35 minutes and in 2010 there will be an East London tube station. It says that Harlesden is not for the faint hearted; it topped the murder rate in 2001. Yet estate agents insist that the area is on the up. It has good transport links with direct trains to Euston as well as the Bakerloo Line and plenty of decent Victorian and Edwardian properties. Regeneration is helping to improve Harlesden’s profile. The notorious Stonebridge estate is undergoing a £65m redevelopment by Countryside Properties; more than 200 homes have been built and a further 300 are still to be completed. At this rate, Harlesden will be the new Brixton faster than agents anticipate. Times 01.06.07
TfL eyes offices in Greenwich Peninsula; Transport for London (TfL) is looking at the Peninsula Central as the final part of their search for 600,000 sq ft of new offices. It has previously signed up for 200,000 sq ft at the Shard at London Bridge and 220,000 sq ft at Palestra, Blackfriars Road in Southwark. The move is likely to be endorsed by London Mayor Ken Livingstone who chairs the TfL Board, and has been encouraging them to move to key areas for regeneration. The Greenwich Peninsula development also includes 10,000 homes and 350,000 sq ft of shops. Estates Gazette 02.06.07
Funding agreed for West End regeneration scheme; funding for the Central St Giles project, which is the centrepiece of the St Giles area’s regeneration has been agreed. A 50-50 joint venture has been established between property investor Legal & General and real estate developer Mitsubishi Estate Company (MEC). The project, due for completion in 2009, will include 37,000 sq m of offices, 3,700 sq m of affordable housing and 3,700 sq m of private housing around a new public piazza. The St Giles area, which is to the immediate east of Centrepoint, is owned by several landlords who have been criticised by the mayor for failing to work together. Further information - Click here Regeneration 01.06.07
Developers vie for site next to British Library; London & Regional, Helical Bar, Development Securities and Kier are among 15 developers lining up bids for a 500,000 sq ft mixed-use scheme next to the British Library alongside St Pancras station. The 3.6-acre site has become available as the result of a land swap between the British Library and the Department of Culture, Media and Sport to allow the library to expand its three acre site. Estates Gazette 09.06.07
Tenants line up for Bow Bells House; the Japanese developers of the 140,000 sq ft Bow Bells House scheme just off Cheapside are in discussion with a number of potential tenants who are attracted to the development as it is one of very few schemes coming forward in the City during the rest of the year. The favourite is the Bank of Tokyo but others said to be interested include the Bank of Ireland, VTB, Russia’s second biggest bank, and US law firm K&L Gates. Estates Gazette 09.06.07
grapevine is produced twice monthly (except in August and December when there
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Next issue on 28th June 2007
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