Business confidence on the increase; business confidence has risen for the first time in twelve months according to the latest Confederation of British Industry (CBI) industrial trends survey. Publishing the regional breakdown they say that sentiment is especially high in east England, the south-east, London, Yorkshire and the Humber. Most regions also expect new orders to rise in the next three months, the most optimistic being Scotland. Lai Wah Co, the CBI’s principal economist, says, “For the first time in over a decade, manufacturing demand has increased in every UK region. Slower increases in unit costs mean companies can at last start to repair profit margins while raising domestic prices. With expectations high for output growth, it seems manufacturers believe that they can continue to ride out a strong pound and a slowing US economy”. Further information - Click here Financial Times 07.05.07
UK is losing ground in race for competitiveness; the latest version of the World Competitiveness league, prepared by the International Institute for Management Development (IMD) shows Britain losing ground as the West faces a growing challenge from rising economic powers such as China, India and Russia. Judged on a wide range of key factors against 54 rivals Britain has hung on to 20th place but it was one of only 15 that failed to make any headway on competitiveness during the year. The remaining 40 are maintaining or improving their performance and closing the gap with the US, which remains the most competitive economy. With China, Russia and India, the report finds that Slovakia, Estonia, Hong Kong, Austria, Australia and Denmark have all shown a strong improvement in their competitiveness and are “catching up quickly” on the US. After the USA the other leading places are taken by Singapore, Hong Kong, Luxembourg, Denmark, Switzerland, Iceland, the Netherlands, Sweden and Canada. China has risen three places to 15th. Further information - Click here Times 10.05.07
Higher interest rates will reduce housing demand outside London; the Times argues that the latest rise in interest rates to 5.5 percent is likely to accentuate the divide between house prices outside the capital and those in the most sought-after London postal codes. The haves (people who are merely rich) and the have-yachts (rich beyond the dreams of avarice) will keep on pushing growth in London, which could be as high as 20 per cent this year, but elsewhere prices may falter as rate-rises begin to bite. Outside London there were already signs that the market’s temperature had already begun to cool. A scarcity of property for sale had driven prices up by ten per cent over the last 12 months but demand was already slackening under affordability pressures. It currently takes nine to ten weeks to sell a house in Yorkshire and Humberside whereas it takes two to three weeks in London. However no commentator sees signs of a severe downturn and Ed Stansfield (pictured right) of Capital Economics says: “There is just a change of tone and mood”. Times 12.05.07
A long squeeze lies ahead; the Economist examines the rise in interest rates and whether there are more to come. It says that the City’s rate-diviners are divided about what the Monetary Policy Committee (MPC) will do next. Some think that the Bank has done enough. With gas and electricity prices due to fall inflation is expected to drop back to two per cent by the end of the year and, in any case, the MPC is working on a two year timescale and last week’s rise was aimed at the inflation target for early 2009. However the Bank has expressed two worries that may swing the argument for further rate rises. The first is that it wishes to influence expectations both on the pay and the prices front. The second is that monetary growth looks uncomfortably high and in a lecture on 2nd May the Governor specified that previous episodes had presaged higher inflation. Therefore the Economist predicts that another rate rise seems likely, and the Bank is cautious about loosening policy. The squeeze will continue for quite some time. Economist 12.05.07
Has boom and bust changed for the City? The FT looks at what might happen if the music stops in the City’s booming labour market. Tens of thousands of jobs were lost during the downturn in the financial markets at the start of the century when the City’s workforce fell by 8.5 per cent. Since then, the UK’s most important labour market - the inner London boroughs that house the main financial centres that account for more than ten per cent of GDP has recovered sharply with employment rising by more than 13 per cent since 2002 to 342,000 in the City and Canary Wharf. The conventional wisdom is that the City’s economic cycle typically runs for five to eight years. Given Citigroup’s redundancies and the possible effects of a Barclays-ABN merger fears have started that we are about to enter a danger period. However Peter Spencer (pictured right) of the ITEM Club argues that the changed nature of a world economy characterised by “subdued inflation and modest increases in interest rates and a reduced reliance on US economic performance” means traditional cycles in the City no longer apply. Shaun Spencer of Napier Scott, City headhunters, believes that the City’s emergence as the world’s leading financial centre, and the growing emergence of markets such as China, India and Russia means that history will not repeat itself. Financial Times 08.05.07
House building and planning reform to feature in Brown agenda; a number of papers say that a major house building programme together with reforms of the planning system are expected to be at the centre of Gordon Brown’s first government. The Planning White Paper is due to be published later this week and will concentrate on reforming the planning system and introducing an independent planning commission to vet major infrastructure applications. The White Paper, which is a response to Kate Barker’s Treasury-commissioned Review of Land-Use planning, published last December, is aimed at facilitating the building of major infrastructure projects and in particular, more nuclear power stations. The housing minister, Yvette Cooper (pictured left), who is close to the chancellor, has warned that unless more homes are built, 70 per cent of 30-year-old couples buying for the first time will not be able to afford a home. The Treasury is already looking at a range of measures to increase housing construction and the government has also appointed John Calcutt, a former chairman of English Partnerships, to lead a housing review. The pressure for new houses is being intensified by the rising number of people living alone. A government review suggested that 220,000 houses a year needed to be built - well over existing numbers. Financial Times 08.05.07, Regeneration 11.05.07
Brown plans new housing bonanza; according to the Observer Gordon Brown is determined to tackle the affordable hosing crisis and is considering moves to fast track the building of tens of thousands of new homes by relaxing planning laws. Legislation would allow for the creation of new-style development corporations similar to the vehicles that allowed Docklands office developments in the 1980s. The powers would be given to a new organisation created by the merger of English Partnerships and the Housing Corporation. Communities England would also be given cash to build key infrastructure, such as roads, to release land for development. Another feature of Brown’s plans will be the building of five “Eco Towns” to be built on old industrial land to provide 100,000 homes in a carbon neutral environment. Observer 13.05.07
Gordon Brown should not be afraid to make Ed Balls his Chancellor; the Economist examines the potential fate of Ed Balls (pictured right) in the new Brown government. It says that the “deputy chancellor” could turn out to be the most important figure in the Brown government, apart from the prime minister himself. The 40-year-old former journalist has only been an MP for two years and occupies a relatively junior post at the Treasury with special responsibility for the City. However since he was lured from the FT by Brown in 1994 he has established himself as an adviser who can debate with Brown on equal terms. When they entered the Treasury after Labour’s landslide victory in 1997 officials soon got the message that nobody within the building, apart from Brown himself, would have more power and influence than Balls, who later became chief economic adviser. He was instrumental in several of Brown’s major decisions and could well be seen as the joint architect of the macroeconomic stability based in the belief that a left-of-centre government must establish credibility with the international financial markets before embarking on redistribution. The question is how they should handle the next stage of their close relationship. The Economist doubts whether Balls will be promoted to the cabinet and if he should become chancellor; Balls admits that he is still an inexperienced politician and the Economist says that he is also abrasive and not a great communicator. On the other hand no one in government can match his technical mastery and Brown would have greater confidence in delegating Treasury matters to him than to anyone else. Economist 28.04.07
Reid departure leaves room for major reshuffle; the news that John Reid (pictured left), the home secretary, is planning to return to the backbenches when Tony Blair retires on 27th June has opened up the way for Alistair Darling to become chancellor. The prospect had been that with Scots as prime minister and home secretary, a third Scot would have caused presentational problems - even before the results of the Scottish Parliament made the Scot Nats the largest party. The FT says that Darling is seen as the cabinet minister with the best command of the economic brief. It goes on to say that that the likelihood is that Jack Straw will return to the post of home secretary, where he was deemed to have done a good job in the government’s first term. Furthermore given the new focus of the job on national security Straw is seen by leading Brownites as having grasped the challenge of radical Islam. The only other candidate would be David Miliband whose appointment would appease the Blair supporters but may lack the weight to deal with any new terrorist attack. Other possible moves include Hilary Benn becoming foreign secretary, Ed Balls leading a re-configured Department of Trade and Industry, and James Purnell becoming culture secretary. The Times says that few, if any, ministers will stay in their current jobs and a number will stand down. Financial Times 07.05.07, Times 10.05.07
Britain’s 100,000 ‘invisible’ teenage dropouts; the Observer features the findings of a forthcoming report from the Bow Group that says that there are 100,000 children missing from school. The report, Wasted Education, says that last year 15,000 children in their GCSE year were missing from the school registers and 70,000 missed exams. Chris Skidmore of the Bow Group says, “These are the lost children. If you compare the number who were at school three years ago and the number who are 16 now, you can see them dropping off the rolls fairly dramatically. Others never turn up to exams”. Further information - Click here Observer 06.05.07
Investor forces ethics on to Tesco agenda; a small shareholder has amassed enough support to force the issue of ethical trading with suppliers onto the agenda for Tesco’s annual shareholders’ meeting. Ben Birnberg, a retired solicitor and company secretary at War on Want, wants the supermarket to adopt higher standards in its dealings with suppliers and farmers in low-wage countries. Tesco had turned down the original request for a debate but Birnberg has used the Companies Act to gain the support of at least 100 other shareholders who own an average of 2,000 shares each. The letters of support are being delivered to Tesco this week to beat the deadline for resolutions for the annual general meeting to be held on 29th June. Guardian 14.05.07
RDAs seek independence from Whitehall; the English regional development agencies (RDAs) have submitted proposals to the Treasury that they should have their own dedicated budgets rather than receiving funds from six different government departments which are then merged into the RDA single pot, which is administered by the Department of Trade and Industry. The proposal forms part of the RDA’s evidence to the Treasury inquiry into economic development and regeneration, which is due to report later in the year. The rejigged funding system would sit comfortably with the takeover of the regional government offices that was proposed in a recent pamphlet to which Treasury ministers Ed Balls and John Healey contributed. Jim Braithwaite, chairman of the South East England RDA said that they were bidding for the agencies to be treated “like a government department and [to] manage our own budget”. Regeneration 04.05.07
Business may have vote on extra business rates; businesses are unlikely to face the prospect of supplementary business rates - as proposed in the Lyons Report on local government - before 2010 at the earliest. Phil Woolas (pictured right), the local government minister, has also said that business may be given the chance to vote on whether councils should be given the power to raise a supplementary rate of up to four pence in the pound to support local economic expansion. Sir Michael Lyons had initially recommended that local authorities should agree with local business how the money should be spent and details impact on the local economy. This should be done through “strong consultation” and be subject to judicial review, rather than giving business a vote on it. However, Woolas said that government was still considering giving business a vote and would be consulting later in the year. They would also be discussing how councils should consult and how votes should be constructed - one vote per business or a vote adjusted by rateable value. Whilst one vote per business was used in Business Improvement Districts their expenditure was fairly small and supplementary rates were likely to be used for major projects, which raised questions of whether larger businesses, who would be paying more, should have a greater say. Financial Times 14.05.07
Reduced rate relief to boost inner city regeneration; plans to reduce rate relief on empty properties in town and city centres have been published in a new bill. The measures, which are expected to raise £900m, were recommended in the report on local government by Sir Michael Lyons (pictured left) and were endorsed by the chancellor in his Budget speech. At present, commercial properties receive 100 per cent rate relief for the first three months and 50 per cent thereafter, with warehouses and factories receiving 100 per cent relief at all times. Under the new proposals, which will come into force in April 2008, business rates will be payable after six months for factories and after three months for all types of property. The Conservatives have attacked the move as a stealth tax but Mr Woolas has pointed out that it is “daft” for the state to subsidise empty properties when commercial rents are so high. Further information - Click here Financial Times 10.05.07
Urban rebuilding at risk from buy-to-let; attempts to rebuild Britain’s city centres are being jeopardised by absentee landlords buying up swathes of new flats, according to development experts. Tom Macartney (pictured right), chief executive of Sunderland Arc told a London conference that in many inner city housing schemes, investors outnumbered owner-occupiers. Given that many tenants were transient, this made it harder to create community spirit. His warning comes as buy-to-let hit a new record last year, with 330,300 investors borrowing £38.4bn. Recent figures from the London Assembly suggest that landlords rather than owner-occupiers bought about 70 per cent of the 20,000 new flats built in the capital last year. David Warburton of English Partnerships said that some investors were buying flats and not letting them out at all. “They are sitting on them and waiting for capital appreciation”. He said that in Plymouth English Partnerships were limiting how many investors could buy into a new housing scheme. Financial Times 02.05.07
Bank expresses concern about Welsh transfer for ONS; the relocation of the majority of government statisticians from London to Newport in Wales poses a serious risk to the quality of economic data, according to the Bank of England. Papers released by the Treasury select committee reveal the extent of concern within the Bank about the poor performance of the Office for National Statistics (ONS). As well as worries about the overall management the Bank expresses concern about the proposed relocation of ONS statisticians from Pimlico to the ONS office in Newport. It says it poses “a serious risk to the maintenance of the quality of macroeconomic data. If substantial numbers of ONS staff are unwilling to relocate, the loss of skilled individuals could have a severe impact on a range of statistics”. As part of the Government’s response to the Gershon report on moving jobs out of London the ONS plans to relocate 600 staff in London to Newport, where it already employs 1,200. All statistical staff are due to move by 2010. However a considerable proportion of the staff are currently unwilling to move. Daily Telegraph 14.05.07
Rogers leads prefab housing revolution; the first set of houses (pictured right) designed by Rogers Stirk Harbour & Partners has gone on sale in Oxley Woods in Milton Keynes with two-bed houses costing £199,995. There are 19 houses in the first tranche built by George Wimpey with an eventual target of 145. They are the first product of a challenge set by John Prescott’s former Office of the Deputy Prime Minister for developers to work with architects to produce homes costing £60,000 to build - excluding land costs. Ivan Harbour, one of the partners in the rebranded practice of Richard Rogers, says that even though they have been responsible for Heathrow Terminal Five, the Welsh assembly and Madrid’s Barrajas airport, it is the most important job that they have - “If we can effect even a small change in this type of housing design it will be a great success for us”. Apart from the bold contemporary aesthetic, the most radical thing about the houses is their use of offsite manufacturing techniques. By making many components offsite most of the waste can be eliminated and higher standards introduced. The houses incorporate passive solar water heating, efficient insulation and controlled natural ventilation. Although similar methods are increasingly popular in the US and continental Europe there has been resistance in the UK outside the social housing sector. Developers know how much they can get with traditional building methods and innovation only works if it is successful and popular. It is too early to determine whether association with an architectural brand will help sales. Further information - Click here Financial Times 07.05.07
Small Business Forum launched by Government; the first meeting of the Small Business Forum was held on 1st May. The forum is seen as an informal way for the government to engage with the small business community and includes individuals and representative groups. It replaces the Small Business Council, which wound up in March. There will be a series of round table meetings to discuss key issues facing the UK’s 4.3m small and medium sized enterprises. The first meeting, which was attended by representatives from seven different business groups, ten private companies and the DTI, discussed what the scope of the new body should be. Amongst the issues that they pinpointed were simplifying the business support programme, making it easier for small businesses to compete for public sector contracts; and improving small businesses’ access to investment. Further information - Click here Regeneration 04.05.07, 11.05.07
UK non-domiciles double in three years; the number of people claiming non-domicile tax status has risen to 112,000 - a 74 per cent increase on 2002 - fuelling fears that the UK is becoming the world’s first onshore tax haven. The tax break, which was originally formulated in 1799 to help British colonialists avoid tax on their overseas income, is being increasingly used by City tycoons and overseas billionaires. The figures were given in a written parliamentary answer by Ed Balls (pictured left), economic secretary to the Treasury, who said that no estimates had been made of the economic benefits that non-domiciled tax status brings to the UK. Observer 06.05.07
US universities lead biotech advance; universities and colleges rather than companies are leading the advances in biotechnology according to a study of worldwide patents between 2002 and 2006 conducted by Marks and Clerk, the UK-based intellectual property firm. However there is a global disparity in academic patenting activity with the US and Japan well ahead of Europe. The top three patenting organisations were the Japan Science and Technology Agency with 1,022 patent families, the University of California (with 543) is in second position, and the US government with 443 is third. The highest-ranking company is Genentech of the US in fourth position. However, the top 20 list is dominated by US universities. Oxford is the highest ranked European university with 65 patent families - less than half the number of each of the universities of Texas, Pennsylvania, Florida, John Hopkins, Stanford and Columbia in the US. Further information - Click here Financial Times 07.05.07
Record number of insolvencies; the number of people who went into insolvency in the first three months of 2007 hit a record high of 30,075, up 24 per cent from the same quarter a year ago. The figures are seen as a sign that rising interest rates are increasing the strain on consumers with record debt levels and higher utility bills combining with many consumers having stretched themselves to the limit to buy a house. Steve Treharne (pictured right), head of personal insolvency at KPMG, expects 130,000 to become insolvent in 2007 although Pat Boyden, partner in Business Recovery Services at PwC thinks that as the figures for the first quarter of the year were only 200 cases higher than the last quarter of 2006 could show that the numbers are peaking. Another factor is that although individual voluntary arrangements (IVAs) have more than doubled in the last 12 months they may become more difficult in the future. Banks are worried about the rise in debt charges and there is a crackdown on companies offering to arrange IVAs. Further information - Click here Financial Times 05.05.07
Former minister attacks ‘woeful’ New Deal; Frank Field (pictured left), Labour MP and former welfare minister, has attacked the performance of the chancellor’s New Deal jobs programme as “woeful”. Unveiling a study for Reform, the public services thinktank, Mr Field said that the New Deal for young people had cost £1.9bn and yet the number of unemployed youngsters is higher now than when the programme was launched in 1998. Challenging government claims that youth unemployment has been virtually abolished he cites figures showing that over half a million 18-24-year-olds are out of work - 70,000 more than in 1998. The number of people not in employment, education or training is also said to be higher than in 1998 and rising. A spokesman for the Department of Work and Pensions questioned the research: “The new deal for young people has been a success, helping over 700,000 18-24-year-olds into work. Since 1997 the number of young people on welfare benefits has fallen- not risen- by well over 100,000. As John Hutton has made clear, we recognise the need to refresh the New Deal so it continues to deliver jobs and opportunities for those hardest to help”. Further information - Click here Guardian 14.05.07
Small firms should get aid for maternity benefits; leading business bodies have joined forces with the Equal Opportunities Commission to seek aid from the chancellor for small businesses struggling to cope with the extra costs of maternity benefits. In a joint letter they say that small employers “face a disproportionate cost burden in recruiting and training temporary cover for maternity leave”. It calls for extra financial assistance to cover these costs for “micro employers” with fewer than ten staff. Government should also pay for advice on maternity issues for small businesses that lack human resources departments. Financial Times 07.05.07
Arts graduates not bothering to look for work; the latest UK Careers Graduates Survey says that too many arts and humanities students are not bothering to look for work. In spite of a booming job market, only 27 per cent expected to land a job compared to 58 per cent of engineers and 57 per cent of business graduates. Almost half of the arts and graduates had “no definite plans” for life after university, expected to take time away or thought they would end up in temporary work. High Fliers Research, which conducted the survey of 17,170 students, said that with 80 per cent of graduate vacancies open to applicants from any discipline there was no reason to fall behind. Further information - Click here Financial Times 08.05.07
British schools face ‘US-style segregation’; a senior executive of the Commission for Racial Equality (CRE) has warned that Britain is in danger of becoming a kind of “mini America” as schools become increasingly segregated and turn into ethnic and religious ghettos. Nick Johnson, director of policy and public sector at CRE, who was speaking at a seminar on education and segregation, went on to say that “a ticking timebomb” was waiting to explode in British schools and called for urgent action to reverse the trend. He cited the example of Bradford where 62 per cent of secondary schools are predominantly white, and 21 per cent are predominantly non-white. The new Education and Inspections Act requires schools to promote community cohesion, but it is unclear what criteria will be used to determine whether they are doing it. Nick Johnson expressed concern about academy and trust schools, which have greater freedom over admissions policies than state schools. On the other hand Simon Burgess (pictured left), professor of economics at Bristol University said that although ethnic segregation was increasing in certain areas for certain racial groups there was no overall increase across the country. While segregation was bad for social cohesion there were other issues. Children might do better in schools where there were other children like themselves and they may also have a greater feeling of safety. Further information - Click here Times 26.04.07
Public schools to fund free places through overseas branches; Harrow School is leading a drive by some of Britain’s top independent schools to fund an expansion of free places using profits from overseas offshoots. It is considering licensing five schools in India, China and South East Asia to fund up to 200 free and subsidised places - a quarter of its total roll. This will enable it to comply with the “public benefit” aspects of the new charity arrangements for public schools. Harrow already has two schools in China and Thailand. Wellington College is planning to open two or three franchises in the Gulf, Dulwich college is planning eight schools in Asia on top of its two satellite colleges in China, Brighton college is opening a franchise in Russia, Haileybury in Kazakhstan and Oxford High School is opening two offshoots in Shanghai - one to teach the Chinese curriculum to Chinese students and the other an international school. A dissenting voice comes from Eton, which says that it is not prepared to take the “considerable reputational risk”. It is almost halfway towards its £50m target to subsidise fees for a third of its pupils. Sunday Times 29.04.07
All-white schools should form links with black or Asian schools; Jim Knight (pictured right), the schools minister, has told the Annual Conference of the National Association of Head Teachers that all-white schools should be twinned with schools with predominantly black or Asian schools. He would also like to see pupils in faith schools becoming pen pals with their peers in schools of different faiths and for children in rural schools to visit inner-city counterparts. Such partnerships would be crucial in promoting community relations and would allow pupils to meet youngsters from different backgrounds. Nationally, only two per cent of secondaries and five per cent of primaries in England have no pupils from minority ethnic groups. But in areas where the ethnic population is over the eight per cent national average, partial segregation along race and ethnic lines can be entrenched. Further information - Click here Times 08.05.07
Trapping CO² emissions is best way to save the planet; the third of the advisory reports from the UN’s Inter-governmental Panel on Climate Change says that a worldwide programme to capture greenhouse gases from power stations and factories could be humanity’s best chance to save itself from climate change. The previous two reports dealt with the science of climate change and how temperature changes might affect humanity. The report says that carbon dioxide levels in the atmosphere are around 382 parts per million, compared to their pre-industrial norm of 273ppm a year. They are rising by about two ppm a year and that rate is accelerating. It says that given that fossil fuels such as gas, oil and coal are still so plentiful and cheap consumption and emissions are likely to rise for years to come. It means that the best way of reducing emissions is to capture CO² and dispose of it permanently, either by pumping it underground or by bubbling it into deep ocean so that it can dissolve in seawater. A linked report estimates that around 40 per cent of the world’s CO² emissions could be captured this way. The problem is that that capturing and storing CO² is an infant technology. Nuclear power on the other hand is a relatively mature technology and the report says that it could prove a powerful means of cutting carbon emissions. The fourth conference, which will pull the findings of the three working parties together, will be held in November in Valencia. Further information - Click here Sunday Times 29.04.07
Companies urged to sign up for Carbon Disclosure Project; Ian Pearson (pictured right), minister for climate change, has told a business conference in New York that companies should attach as much importance to the environment as they should to financial statements. He urged all large businesses to sign up urgently to a common standard for reporting greenhouse gas emissions, known as the Carbon Disclosure Project. The project works on behalf of global institutional investors with assets worth £20.6bn to provide a mechanism for business to measure and declare its carbon emissions. Only 55 per cent of the FTSE 100 provided emissions data, fewer than half of them up to the required standard. Further information - Click here and here Financial Times 10.05.07
UK falling behind in promotion of green fuel; the UK government is not doing enough to promote investment in the production of green fuels according to Jonathan Johns, head of Ernst & Young’s renewable energy group. Speaking at the launch of a new index to monitor the attractiveness of different countries to potential investors in the biofuels industry, he said that British politicians had lagged behind European neighbours in introducing regulations to encourage production. This had encouraged investors to look elsewhere so that the UK was sixth in the list of the most attractive countries for investment in biofuels behind the US, Brazil, Germany, France, Spain and joint with Sweden. Although British producers benefit from lower fuel duty rates, including biodiesel, other countries, such as Germany, were providing greater incentives. Equally although Gordon Brown had set a target that by 2010 five per cent of all UK fuel should be from renewable sources, Germany had a target of 6.75 per cent by 2009 and eight per cent by 2015. Further information - Click here Times 08.05.07
Nuclear plans are delayed; the Observer says that plans to build new nuclear reactors to plug the looming gap in Britain’s electricity generation will be delayed again by another round of wide-ranging consultation. The government was concerned that it could face another legal challenge from Greenpeace if it does not consult properly over its energy review. The government had planned to publish its energy review this week but publication could now slip back to June. Alongside the review it will also issue new consultations over nuclear power which will cover the economics of new build and then storing the resulting radioactive waste as ordered by the High Court judge in the Greenpeace case. The consultation will also cover the wider principles of whether nuclear power is needed - to which companies will have to respond. The nuclear industry fears that this new round of consultation will not be completed until early next year. However the government will also announce plans to streamline the planning process for major infrastructure projects such as nuclear power. Observer 13.05.07
Dash into biofuels could be harmful; a leading British investor has warned about the head-long flight into biofuels saying that unless sustainability criteria are built into the supply chain of any green fuel project there could be adverse effects on the surrounding environment and social structure. Co-Operative Insurance, the investment arm of the Co-Op has already encouraged companies involved in the palm oil supply chain to join a special round table to look at issues of concern in the sector. Sam Lacey, the author of Biofuels: Risks and Opportunities of an Emerging Industry, says: “The current growth of the industry is happening without paying attention to the long-term impacts. It must be pushed in a more sustainable direction and complemented by fuel-efficiency measures and reducing our use of fossil fuels”. Further information - Click here Guardian 14.05.07
City leaders say main problem is “Heathrow hassle”; the latest meeting of the chancellor’s high-level group on financial services enabled the three dozen or so City leaders present to present their grievances. Of these the difficulties faced by executives when flying in and out of London’s airports was the main source of concern especially when Heathrow’s security measures were compared to the more congenial welcome found at other financial places. Other issues included funding for the Crossrail, east-west London rail link, strengthening the general insurance market, implementing tax and legal changes to boost London’s competitiveness and promoting UK financial services overseas. On Crossrail, the terse response was the case for it had been accepted but despite the significant funding issues a way through would be found. The issue was deferred to the next meeting when the comprehensive spending review would have been published. Ed Balls, the City minister, launched a prospectus for the new international centre for financial regulation, which has won the support of most of London’s big investment banks as well as the City of London. Whilst City leaders were appreciative of ministers’ willingness to listen and the progress being made on overhauling the City’s financial infrastructure, they wanted to see progress by the time of the next meeting in the autumn. Further information - Click here for HM Treasury and here for The City Financial Times 10.05.07
Crossrail - the saga continues; the Times claims that the Department of Transport (DfT) has raised renewed concerns about the funding of Crossrail and that nothing will be decided until the autumn when the comprehensive spending review is published. In a response to the Select Committee on Transport the DfT concedes that although it remains committed to Crossrail “it is true that funding remains a challenge”. It emphasises the need for London- or those that would benefit from Crossrail- to contribute accordingly to the scheme. The scheme is thought to cost £16bn after some cost reductions but the cost of raw materials is rising fast. One of the key benefits of Crossrail would be to alleviate congestion on other parts of the capital’s transport network and so reduce time spent travelling while also improving productivity. The Times says that most parties agree that the cost of Crossrail should be borne by those that would benefit, including big business. The Lyons report on local government proposed that London should be allowed to raise supplementary business rates to fund infrastructure projects which could secure a commercial loan worth about £3bn. The promise of future revenues could underpin another loan of £3bn and it is proposed that the government put forward another £3bn. However this could still leave a gap. A report commissioned by Crossrail and the Greater London Authority in March concluded that the costs would go up by £300m for every year that construction was delayed. Times 07.05.07
City opposes new powers for Mayor; the City of London has warned that the new planning powers proposed for the Mayor of London could damage the City’s role as a financial centre. Under the new Greater London Assembly Bill the Mayor would gain the power to overrule planning decisions by local authorities. However the City argues that concentrating such power in the hands of one person would be a mistake. Michael Snyder (pictured right), the chairman of the City of London’s Policy Committee, argues that: “The City has supported a strategic role for the London mayor but the current proposals, as drafted, are in danger of damaging the international competitiveness of the City by making the whole process more complicated and less responsive”. In particular the City, supported by some leading developers, wants the Mayor’s proposed powers to intervene confined to major schemes rather than all schemes of “potential strategic importance”. Financial Times 08.05.07
Over 200 City lawyers earn more than £1m-a-year; with Clifford Chance, the world’s largest law firm, breaking the million-pound profits per partner barrier for the first time the Times predicts that more than 200 City-based lawyers will earn more than £1m this year. However it will be the 120 partners at Slaughter and May who will on average be earning the most at £1.5m, with long-serving partners topping £2m. At Linklaters the average profits per partner will about £1.2m. Some partners at Allen & Overy, Herbert Smith and Ashursts may top £1m but the average profits per partner is around £800,000- £850,000. The rise in profitability at the UK’s largest law firms will close the gap in earning power between the City and Wall Street. Nonetheless Skadden Arps Slate Meagher & Flom, America’s largest law firm has expended in London by hiring young lawyers with the promise of big money and big work. Scott Simpson, their London-based cross-borders mergers expert is expected to be one of the City’s highest earners this year. Times 10.05.07
Another claim that US firms prefer London; research undertaken by Cushman & Wakefield and published to coincide with the annual conference of the British Council for Offices claims that “there is no doubt that the balance has shifted between New York and London in terms of their positions as global cities”. The report says that during the first quarter of 2007, almost half the occupiers in London’s 10,000 sq ft-plus lettings came from foreign companies. US firms accounted for 27 per cent of these larger lettings. Some 60 per cent of that space was taken by financial companies. Both cities had similar vacancy rates and similar rental growth although space in London reached an all-time high of £110 per sq ft- three times the Manhattan figure at similar rates of exchange. Another point of difference is the development pipeline with Manhattan having very little and London having 9m sq ft, where “cranes on the skyline are an indicator of a city’s vitality”. Further information - Click here Estates Gazette 05.05.07
London emission zone to charge polluting lorries £200 per day; plans for a low-emission zone (LEZ) to be launched next year have been announced by the mayor. Older, dirtier lorries will have to pay £200 a day to drive in London and the £8-a-day congestion charge will be adapted so the most polluting vehicles pay £25 a day to enter. The LEZ will cover all 33 local authorities rather than the smaller congestion zone, which straddles the central and western parts of inner London. Fines will be far more punitive than the congestion scheme, with transgressors facing a bill of up to £1,000. The scheme will be extended to vans and buses in 2010. There has been a mixed reaction from business with London First expressing concern for the effects on smaller firms whilst others, such as the Knightsbridge Association, have called for an even more ambitious scheme. Further information - Click here Guardian 09.05.07
Regeneration plans for Canning Town; regeneration plans for Canning Town have been published by Erick Egeraat Associated Architects. The plans include 7,000 new homes as well as retail and commercial space. Further information - Click here Regeneration 04.05.07
GLA sees 2,000 acres of disused land; a series of studies of industrial land in Greater London commissioned by the Greater London Authority shows that more than 2,000 acres of disused land could become available for development over the next 19 years. The study points to east London as the area with the most disused land. Some 1,245 acres were identified in the north-east and the south-east. North London will lose 465 acres; south-west London, 166 acres and west London 136 acres. The report also moots a number of options for relocating London markets, including moving Billingsgate fish market in Poplar to either New Spitalfields or New Covent Garden. Further information - Click here Estates Gazette 05.05.07
Covent Garden uses bequest for Floral Hall; the Royal Opera House is to rename the Floral Hall in honour of the late Paul Hamlyn, after a £10m donation from the late publisher’s foundation. It has also opened the way for sponsors to acquire other naming rights including the auditorium. Hamlyn donated thousands to Covent Garden on projects to attract young people into the building. Further information - Click here Times 10.05.07
Gormley sculptures perch on London rooftops; as part of an exhibition of his work being held at the Hayward Gallery from 19th May, 31 Anthony Gormley sculptures have been placed on rooftops and pedestrian areas across half a square mile of inner London. Sites include the Shell Centre, the National Theatre, Waterloo Bridge, the Union Jack club, King’s College, Imperial College and the Freemason’s Hall. Further information - Click here BBC News Online 02.05.07
Camden Council approve King’s Cross station plans; a £400m makeover of King’s Cross station could be completed in time for the 2012 Games after receiving the go-ahead from Camden Council. Network Rail is promising a brighter station, with a new platform capable of taking an extra 24 trains a day, and a new concourse and booking hall. For the first time since 1972 when a temporary booking hall was built the Grade 1 listed southern face of the building will be uncovered. This will create a new public piazza, which will be larger than Leicester Square, which will cost £6m, with around £750,000 set aside for improvements to York Way. The mayor has the final say but is expected to give his approval. The scheme, which is being funded by Network Rail and the Department of Transport, aims to cope with an additional 10m passengers a year. Further information - Click here Rail 09.05.07
Sloane Square traffic plans are dropped after public protests; Kensington and Chelsea has dropped its plan to introduce crossroads into Sloane Square after a public consultation revealed serious local opposition. In the consultation, the council’s plans to introduce twin cross roads was presented alongside an alternative plan to renovate the square while leaving its roundabout in place. Atkins was paid to develop the latter proposal, based on protest group Save Sloane Square’s ideas. Although the consultation has yet to be fully analysed, 65 per cent of the 6,800 consulted opposed the crossroads design, in which the square’s central island would have been replaced by two large paved areas split by a road. The council’s ideas had been endorsed by the Commission for Architecture and the Built Environment. The council said that its plan would have increased the amount of space and accessibility of pedestrian space. However, Dr James Thompson, chairman of Save Sloane Square, said: “The third consultation was an extensive and thorough exercise. It showed conclusively that the crossroads plan was not the popular choice for residents, businesses and visitors”. Regeneration 04.05.07
University could rescue the media centre; a new university campus is emerging as one of the approved ideas for the legacy of the 1.3m sq ft media centre to be built at the Olympic Park (pictured left). The Olympic Delivery Authority (ODA) is anxious that the centre should not share the fate of some of the buildings that were erected for the Sydney and Athens Games. Bids from potential developers were due to be submitted by 4th May and are due to include details of proposals for the future use of the buildings. “The ODA is keen for the media centre to become the start of an urban development that would regenerate income for Tower Hamlets Council. Development could spread west”. One possibility was the QVC shopping channel but it is thought more likely to stay in south London. Two universities have put their names forward - London Metropolitan, which has campuses in east and north London, and the University of East London. London Metropolitan would only want 400,000 sq ft in year one but this could rise to 1m sq ft in a few years as it sold valuable freeholds. Estates Gazette 28.04.07
“Don’t expect a boom from the Olympics”; a report prepared for the London Assembly warns that promises that the Games will bring 50,000 jobs, affordable new housing on a large scale and contracts for small firms will prove very different to honour. Academics say that a study of the four previous host cities shows that long-term unemployment and workless communities were largely unaffected with Greece actually losing jobs. There was some growth in jobs in Sydney and Barcelona. The authors, from the London East Research Institute, have examined the nine areas of legacy that the 2012 Games planners hope to leave. They conclude that it will be “very challenging” for London to meet its goals on employment, sports participation, skills, tourism and disability awareness. Aims for urban renewal, the environment and the economy are ‘challenging’, while only the plans for community involvement are seen as ‘feasible’. The report was commissioned by the London Assembly monitoring the Olympics after members expressed concern about a possible gap between the 2012 leaders’ rhetoric and the likely reality on the ground. Further information - Click here Observer 13.05.07
Network Rail boss appointed as ODA chairman; John Armitt (pictured right), chief executive of Network Rail, has been appointed as the new chairman of the Olympic Delivery Authority. He will stand down from Network Rail in July and take up his new post in September. Sir Roy McNulty, who has been the acting chairman, will become the deputy chair. Further information - Click here Regeneration 11.05.07
Biggest trading floors planned for London Wall site; JP Morgan have announced that they are to develop four trading floors, each capable of housing 1,000 dealers, in a 20-storey building on the site of St Alphage House on London Wall. The planned floors of 72,800 sq ft each will trump the size of the existing record-holding trading floors of Lehman Brothers and Credit Suisse, both at Canary Wharf. The new building will be the bank’s European headquarters and it will also consolidate two existing London offices in Alban Gate, EC2 and Victoria Embankment, EC4. The Estates Gazette says that the bank’s decision to remain in the City surprised many who thought that the group would be lured to Canary Wharf. A spokesman for Canary Wharf said: “Canary Wharf made an extremely competitive offer to JP Morgan, but it would appear that the City made an even cheaper one”. Times 03.05.07, Estates Gazette 05.05.07
Fashion moving to Clerkenwell; Esprit, the fashion retailer, has moved its head office to a building in Farringdon Road. It joins Kookai, Timberland, Ben Sherman, Morgan and TM Lewin, who have all recently moved their head offices to Clerkenwell. One agent said: “Clerkenwell is now seen as an established and viable alternative to the West End, especially with prices at a discount. Occupiers also see Clerkenwell as trendy and prefer this to the more in-your-face Soho and other West End areas”. Estates Gazette 28.04.07
PwC to move to More London on South Bank; PricewaterhouseCooper has finalised a deal to move to the More London Riverside development on the South Bank when it leaves its existing London Bridge office which will be the site for the Shard of Glass development. It has signed for 500,000 sq ft at around £45 per sq ft. The building is due to be completed in 2010. They are retaining the existing offices on Embankment Place above Charing Cross Station. Further information - Click here Estates Gazette 05.05.07
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