Petrol prices help drive inflation to 2.1 per cent; inflation unexpectedly rose to 2.1 per cent in October- the first time it has risen over the government’s target rate of two per cent for four months. The announcement from the Office for National Statistics says that sharp rise in the price of petrol was the main factor although higher food prices and higher costs in air travel also contributed. The rise surprised economists who were also alarmed by the rise in the retail price index from 3.9 per cent to 4.2 per cent. The day after the inflation figures were issued the Governor of the Bank of England published the Bank’s quarterly inflation report. Mervyn King said that he expected the global credit squeeze to hit growth hard next year although he thought 2009 would be better. The press has largely interpreted the report as indicating that interest rates will be cut at least twice during 2008 from 5.75 per cent to 5.25 per cent. A third rate cut is not ruled out. Further information - National Statistics and Bank of England Independent 14.11.07, Financial Times 16.11.07
Food prices rising at their fastest for 14 years; increased wheat, dairy, meat and vegetable prices mean that food manufacturers are having to pay six per cent more for their raw materials than a year ago- the highest annual rate since 1993 according to the Office of National Statistics (ONS). The surging costs will be passed onto the consumers, who are experiencing the highest food bills for years and could end up paying almost £1,000 extra on their annual food bill than they did a year ago. High street sales fell in October- the first time in nine months, suggesting that higher borrowing costs are starting to have an effect. Analysts warned about reading too much into one month’s figures, especially as the underlying figures were still solid. Karen Ward of HSBC said: “The puzzle of the past year has been the strength of retail sales on a backdrop of weak employment growth and declining real wages. The retail sales data provide at least a tentative sign that consumer spending is slowing but isn’t sufficiently weak to warrant a pre-Christmas cut”. Further information - National Statistics and ONS Daily Telegraph 13.11.07, Financial Times 16.11.07
Housing market facing big slowdown; the latest authoritative survey of estate agents undertaken by the Royal Institution of Chartered Surveyors (RICS) shows that the UK housing market is set for a severe slowdown. The survey, covering England and Wales, suggests that prices in October fell for the third month in a row, and at the fastest pace since July 2005. London was the only region where prices did not fall but even there the RICS says the rampant London market has hit the buffers. New buyer inquiries have been withering for almost a year but there are now the first signs that homeowners are rushing to sell before the market tumbles. New stock on estate agents books leapt by 8.8 per cent last month at the same time that sales were lower than at any time since April 1999. The findings of the RICS survey are corroborated by the October FT house price index, which found prices had declined in half the English regions since June. Further information Financial Times 13.11.07
Record number of people leaving the UK; the number of people leaving the UK to live abroad reached a record 400,000 in 2006- an increase of 41,000 on 2005. The Office for National Statistics say that 207,000 were British citizens, with most going to Australia, New Zealand, France, Spain or the USA. The rest of the 400,000 were non-British and had been in the UK for more than a year. The annual international migration figures confirm that an estimated 591,000 people arrived to live in the UK for at least a year, giving a net inward flow of 191,000. The largest group of new immigrants was from India, Pakistan, Bangladesh and Sri Lanka, outnumbering those from Poland and the other new EU states. Work remains the most important factor but the number of students arriving to study for at least a year totalled 157,000. The Home Office estimated that international students boost the economy by almost £8.5bn a year. China, with 52,000, provides the most students, followed by India with nearly 16,000 and the USA with 14,000. London remains the favourite destination but is losing its popularity, with only 29 per cent of new migrants going there compared to 43 per cent in 2000. However Channel 4 News suggested that migrant workers will be needed for construction of the 2012 Games, and the targeted 3m new homes. Further information Guardian 16.11.07
New report reveals the extent of child poverty; a new report published by the Frank Buttle Trust reveals the true extent of child poverty in the UK. The report, Living with Hardship 24/7, has been written by Dr Carol-Ann Hooper, a senior lecturer in social policy at the University of York. It takes an in-depth look at the experiences of families surviving in low-income households, exposing details of their struggle that would not look out of place in a developing country. In a foreword to the report, Prime Minister Gordon Brown, writes: “The Government pledged in 1999 to halve child poverty by 2010 and to end it by 2020. While absolute poverty in Britain has fallen as a result of measures taken by the Government, there are still 2.8m children living in poverty in the UK- that is one in three children. A great deal more needs to be done”. Further information Independent 15.11.07
M&S rated as the best-regarded company in the UK; a YouGov survey for the CBI has found that Marks and Spencer is the best-regarded company in Britain. The company was singled out nearly twice as often as John Lewis Partnership, the second most highly rated company. The top ten was completed by Virgin Group, Tesco, Sony, Asda, Amazon, Apple, Boots and the BBC. At the bottom end of the scale, the reputation of the banking and finance sector was found wanting by a third of the 1,960 consumers surveyed. Transport companies were also criticised. The survey found that more than half of the consumers would pay a premium to the company they believed had the best reputation. Further information Financial Times 19.11.07
Companies Act delayed for a year until 2009; the government has announced that full implementation of the Companies Act has been delayed by a year, until October 2009, because Companies House computer systems are not certain to be ready in time. The delay means that the wide-ranging shake-up in companies legislation- the biggest single act ever passed by parliament- will not come fully into effect until almost three years after receiving Royal Assent. After consulting business the government will announce next month whether other provisions due to come into effect next October- including changes affecting directors’ conflict of interest duties will also be delayed. The announcement was made by Stephen Timms, the competitiveness minister, at a CBI event in London. Further information Financial Times 08.11.07
Tory think-tank calls on business to support society; big business has been urged by the Centre for Social Justice, a think-tank chaired by former Tory leader Iain Duncan Smith, to provide more support for community and voluntary groups dealing with social problems. Further information Daily Telegraph 12.11.07
The new face of philanthropy at £100,000-a-table; the Guardian runs a feature on the dinner being organised by Fortune Forum at the Royal Courts of Justice when each table will be sold for £100,000 with Al Gore as the star guest. Music will come from Damien Rice and speakers are scheduled to include Bob Geldof and Benazir Bhutto, if she is free from house arrest. It is the second such event aimed at what are called “Britain’s new philanthropists”. Last year’s event had Bill Clinton as the main attraction with guests including Michael Douglas and Lakshmi Mittal. A total of £808,067 was raised on that night with half of that going on costs. Renu Mehta, the organiser, says that this year’s event is targeted at policymakers. She plans to launch a campaign to persuade Gordon Brown to provide an annual £20m subsidy to match donations of more than £200,000 in aid of sustainable development. Guardian 17.11.07
MPs query whether ministers are up to managing Thames Gateway; ministers at the Department of Communities and Local Government (DCLG) have been accused of being “not up for the job” of managing the huge Thames Gateway regeneration project to build 160,000 new homes and create 180,000 jobs. The members of the Public Accounts Committee warn that the programme remained “little more than a group of disjointed projects” and that immediate action was needed to prevent “another public spending calamity”. Edward Leigh, chairman of the Committee, said: “The department has been incapable of taking the multitude of central, regional and local authorities in the scheme to work together to turn it into reality”. So far the government has spent £673m on redeveloping the area from Canary Wharf to the mouth of the Thames at Southend-on-Sea. A spokeswoman for the DCLG, said that she did not recognise many of the assertions in the report and, that, in any case, the pace of change was such, that the report was already out of date. “In the last 12 months alone, Government investment and intervention have delivered major progress, with the opening of two international stations on the High Speed Rail Link, agreement on Crossrail which will substantially benefit Canary Wharf and Woolwich and major progress on Olympic developments and at Stratford. These alongside the new port at London Gateway are the very projects that the Thames Gateway partners identified as the major drivers for regeneration and investment”. Further information Independent 15.11.07
Housing Pathfinders have had little impact and caused stress; a report by the National Audit Office (NAO) says that John Prescott’s £2.2bn plan to bulldoze thousands of homes and improve the landscape in northern cities has had little impact “and heightened stress”. So far 10,000 homes have been demolished and 40,000 refurbished, but only 1,000 homes have been built in the nine “Pathfinder” areas. At the same time there has been huge local opposition to the scheme with the result that coupled with the effects of rising property prices the government has had to scale down the demolition projects from 90,000 to 57,100. The Pathfinder regeneration project in the north and the Midlands was started in 2003 and is due to run until 2018. Its aim is to address the problems of neighbourhoods with poor housing stock that has suffered longstanding deprivation. But the report says that progress has been mixed across the nine projects and the overall increase in demand has been no greater than the national average. Prices in nine areas have risen, narrowing the gap with surrounding areas, however vacancy rates have fallen between 2002 and 2006 by comparison with surrounding areas. However in other areas there has been no improvement. A spokesman for the DCLG said: “The programme has always been about improving the homes, communities and neighbourhoods. A key part of that is refurbishing dilapidated properties to create homes where people want to live. As a direct result of government investment, over 40,000 homes have now been refurbished, making them places people will continue to live for many years to come”. Further information Times 09.11.07
Britain is now ‘dustbin of Europe’; the UK dumps more household waste into landfill than any other country in the European Union, according to research by the Local Government Association (LGA). Households sent more than 22.6m tonnes of rubbish- the size of Warwick- to landfill compared to Italy with 17.6m, Spain 14.2m and France 12m tonnes. The LGA says that if the current trends continue the UK will run out of landfill space in less than nine years. They are urging bold reforms otherwise recycling rates will not rise fast enough to meet the EU Landfill Directive. Further information BBC News Online 12.11.07
Air passengers avoiding London airports; passenger growth at Britain’s regional airports outside London has outstripped Heathrow, Stansted and Gatwick every year since 2000 according to the Civil Aviation Authority. While London airports have grown at three per cent, the regional airports have grown at seven per cent a year with the result that their annual passenger volume now exceeds 100m, nearly triple the total in 1990. Amongst the factors is Heathrow’s reputation for overcrowding and poor service, exacerbated by last summer’s terror scare as well as the growth of low-cost carriers using regional airports. The fastest growing regional airport is Bristol, followed by Liverpool, East Midlands, and Leeds Bradford. A number of international airlines including Continental and Emirates have started services from Manchester, Birmingham and Glasgow. Further information Guardian 16.11.07
City centre buy-to-let plans put into mothballs; the FT reports that a growing crisis in the buy-to-let sector is leading builders to “mothball” city centre developments until investor demand picks up. In what will be a blow to government plans to accelerate house building, a slump in residential investment demand in areas such as the Midlands and the north is leading to the delay of hundreds of new homes. Dabdara, a city centre building specialist which has about 3,000 homes either under construction or going through the planning process, is to delay the development of the next phase of its land bank in Manchester until existing schemes are sold. Crest Nicholson also acknowledged the problem. But the oversupply of city centre apartments does not change the fundamental demand for new housing, according to David Pretty, chairman of the New Homes Marketing Board. “There is a clear distinction between luxury apartments in some city centres where there has been an acknowledged problem for some time and affordable homes were generally there is not enough supply”. Financial Times 19.11.07
Survey finds mixed views about UK start-ups; Britons take an upbeat view of the environment for business start-ups in spite of proliferating red tape, and are comfortable with entrepreneurs keeping a substantial part of the wealth they generate. Disappointingly for the UK government, sponsors of Enterprise Week aiming to promote small business, many Britons seemed to think very little about enterprise. These results came from a survey in six countries conducted by Harris Interactive on behalf of the FT. More than a third of UK respondents declined to give a view to a series of questions about enterprise, a similar proportion to that recorded for the US and continental Europe. Of those who expressed an opinion, 57 per cent (31 per cent of the total sample) saw the UK as a good place to set up new companies. 40 per cent (18 per cent of the overall total) also said the climate to start businesses in the UK was as good as the US, seen widely as the gold standard by which other countries should be measured. There was a higher proportion of UK respondents who saw red tape as a problem, especially when compared to the rest of Europe, even though the UK is relatively lightly regulated in comparison. Access to finance was regarded as good. Kevin Comoli, general managing partner in London of Accel, a venture capitalist, said that continental Europe was becoming more positive about enterprise. Allen Morgan, managing director of the Mayfield Fund, a Silicon Valley investor, said Americans had remained upbeat about enterprise in the face of the subprime crisis, partly because of the success of start-ups such as Facebook. Further information Financial Times 19.11.07
Start-ups continue to grow; official data for value-added tax registrations shows that there was a two per cent increase to 1.96m in the 12 months to January 2007. The figures, which were compiled by the Office for National Statistics, means that the numbers have risen every year since 1995 and there are now 21 per cent more VAT-registered businesses in the UK than 12 years ago. There were 182,200 new VAT registrations in 2006, an increase of 0.3 per cent on the previous year. However, the number of deregistrations, which fell 0.3 per cent to 143,100, was the lowest since 1994. The biggest increase was in business services, where 1,000 more companies joined the official list. However in manufacturing and agriculture the total stock declined. London saw the biggest regional increase with 7,300 additions. The figures were released at the start of Enterprise Week, but business groups warned that the credit squeeze coupled with the government’s proposals on capital gains tax, risked undermining entrepreneurial spirit. Further information Financial Times 15.11.07
TUC warns about cuts in red tape; Brendan Barber, general secretary of the TUC, has warned that the drive to cut red tape and remove obstacles to business is placing the lives and health of workers at risk. He called for tougher penalties for company executives, a halt to spending cuts at the Health and Safety Executive and stricter enforcement of existing safety legislation. He warned that ministers were “being taken in by employers lobbying about so-called ‘red tape’ “. He contrasted ministerial support for better health and safety at work with messages coming out of 10 Downing Street, the Cabinet Office and the Department for Business, Enterprise and Regulatory reform “that the government is to remove burdens on business”. Further information Financial Times 19.11.07
Academia fails to foster start-ups; only 11 per cent of students in UK universities are involved in setting up businesses or studying entrepreneurship, compared to 50 per cent in the US according to a survey by the National Council for Graduate Entrepreneurship (NCGE). The findings suggest that UK academia has a long way to go to catch up with the US, where students have set up businesses such as Google and Facebook. The NCGE, which surveyed 122 universities with 1.75m students, said that less than half do enough to encourage enterprise and only a minority offers such facilities as start-up mentoring or enterprise workshops. Rick Trainor, president of Universities UK, said he was “surprised” by NCGE’s criticisms. He said:” The UK remains ahead of its competitors in terms of university entrepreneurial activity- more spin-outs are created per pound of research income than in the US, for example. And 30 university spin-out companies have floated on the stock market in the last four years, with a combined value of £1.7bn”. Further information Financial Times 12.11.07
Tories set up entrepreneurs advisory group; just as a number of the government’s leading business advises such as Sir Ronald Cohen are expressing concern about the tax changes the Conservatives have announced the creation of the New Enterprise Council. George Osborne, the shadow chancellor, said that his party did not want to make the same mistake as Labour and not consult about potential changes, which had resulted in a catastrophic drop in business confidence in the government. The members of the new group include Sir Stelios Haji-Ioannou, founder of easyJet, Brent Hobermen, co-founder of Last-minute.com, hotelier Surinda Arora, Jimmy Choo founder Tamara Mellon, Iqbal Ahmed, chief executive of Seamark Group and Stefan Glaenzer, former executive chairman of last.fm. The new group is meeting for the first time this week and will discuss the environment for entrepreneurship and investment. It will sit beside other Conservative Party projects such as the Conservative City Circle. It comes several days after Lord Bilimoria, a crossbench members of the House of Lords and the entrepreneur behind Cobra Beer, waded into the debate about the amendments to capital gains tax saying that entrepreneurs had been “outraged” and “dismayed” and had led to a “rift” between business and the government. Independent 16.11.07
Stelios offers cut-price office space; The easy group has opened its first cut-price office centre in Kensington aimed at young entrepreneurs. Offices will be available from £99 per week with broadband and phones provided. Further information Independent 14.11.07
Seven and half million to be offered skills; in what is being seen as an attempt to fulfil the Prime Minister’s pledge of “British jobs for British workers” the Skills secretary John Denham has announced plans to make skills training places available to 7.5m people. The plan includes 3.5m basic literacy and numeracy courses. Under the plan there will also be 120,000 new apprenticeships for under-25s and 30,000 places for older workers; there will be an extra 95,000 places for people without five good GCSEs. It is estimated that nearly a third of people of traditional working age in the UK are poorly qualified and 7m have problems with literacy and numeracy. Speaking on Radio 4 John Denham, the secretary of state for universities and skills, said the government recognised that something had to be done to raise the employability of unskilled British workers. A spokesman for the Department of Innovation, Skills and Universities said: “It is just common sense that if you do improve the skills base of the current workforce, there will be less need to recruit migrants”. Further information Independent 17.11.07
Firms could face big payouts over forced retirement; lawyers are warning employers that they could be laying themselves open to large compensation claims if they force workers to retire at 65- even though the current law allows them to do so. Age discrimination rules introduced in October 2006 allow workers to stay on after 65 but put bosses under no obligation to keep them. However a challenge by Heyday, part of Age Concern, to the legality of the 65 retirement age has gone before the European court of justice but may not be decided before spring 2009- too late for those forced to retire this year or next. But a ruling this month by the employment trails tribunal raises the possibility that people made to retire in the meantime can bring claims to tribunals and have them stayed, pending the outcome of the Heyday case. Further information Guardian 19.11.07
Tougher work tests for the disabled; Peter Hain, the work and pensions secretary, has announced a new test for disability, which could cut the number of annual claimants by 20,000. The new work capability assessment will be introduced alongside the employment support allowance, which will replace incapacity benefits, next autumn. The Department for Work and Pensions estimates that there are about 2.64m people currently claiming incapacity benefits with an overall cost of £12.5bn. At the moment more than 60 per cent of those applying for incapacity benefit are successful, but under the new test that figure is expected to drop to 50 per cent. Those who fail will be expected to seek work. The new tests will drop tests such as being able to walk 400 metres or being able to climb 12 steps without using the banister. The new tests will look at other skills such as using a keyboard. Further information BBC News Online 19.11.07
UK universities do well in global league table; there are four UK universities in the top ten in the table of the World’s best universities compiled by the Times Higher Education Supplement. The table is topped by Harvard, with Oxford, Cambridge and Yale as joint second. Imperial College London is fifth and University College London jumps from 25th to 9th. The others in the top ten are Princeton (6), California Institute of Technology and University of Chicago (7=) and MIT (10). Other notable UK entries are Edinburgh, who rise from 33= to 23, King’s College London, 46 to 24 and Bristol 64= to 37. The disappointment is the London School of Economics who fall from 17 to 59. The FT says that the news may make it difficult for Gordon Brown to tinker with England’s research regime. England’s best universities did well in two of the six categories used to reach a mark for the rankings: opinion among national and international employers and the number of citations per academic. Further information - THES Financial Times 08.11.07
Independent schools move money into bursaries; a survey by the FT shows that leading independent schools have diverted millions of pounds from “scholarships” for the cleverest children into means-tested bursaries for the poor, ahead of the charity watchdog’s introduction in 2008 of requirements to help low-income families. The survey of 12 of the most academically successful schools shows that the bulk have in recent years slashed scholarships to as low as £60 per child. There has also been a surge in fundraising activity, which has helped to put more into bursaries. The FT looks at St Paul’s School - within a few years all of its £1.3m-a-year support for parents will be means-tested. Martin Stephens, the high master, opposes scholarships because “high ability is a treasure to be nurtured, not a commodity to be bought and sold”. But UK schools are still a long way behind their US counterparts. Phillips Exeter Academy in New Hampshire, for example, uses its immense wealth to spend £6m a year on bursaries for 46 per cent of its pupils. Financial Times 10.11.07
Proposal for City Academy for the City; Sir Cyril Taylor, chairman of the Specialist Schools and Academies Trust, has urged leading City companies to support the creation of England’s first “financial skills academy to produce skilled workers for the financial service and insurance industries”. Sir Cyril told a conference of insurance companies that such an academy “could make a significant contribution to solving … the low skills base of many native Londoners which prevents them from competing in London’s skilled labour market.” He said that discussions about raising the £2m needed for an academy in central London were going well and that many more such academies could follow. Currently UBS and KPMG sponsor academies in Hackney and the City Corporation sponsors two academies in Bermondsey and Islington. The FT says that the new proposal may have two selling points for City institutions: it is designed to produce workers for their sector and, unlike other proposals it will not replace a failing school, attended by poor-performing pupils. The new academy will have a strong vocational emphasis, in line with the retail academy, sponsored by Sir Philip Green and the construction skills academy sponsored by JCB. Financial Times 08.11.07
Government sets up urgent review of academies; ministers have set up an urgent review by the Prime Minister’s Delivery Unit of academy schools amid growing concern that education policies are failing to target the most disadvantaged pupils. Downing Street has set an eight-week deadline to examine whether academies are achieving their original goals of tackling the weakest urban schools. There is no question of academies being scrapped, but there will be recommendations to refocus their programme. The review comes as new research finds that the government’s main schools policies have been responsible for less than a third of the improvements in GCSE results since the 1990s and that educational resources appear to have been allocated “inefficiently and inequitably” to the benefit of those schools with pupils from better-off families. The research, commissioned by the Nuffield Trust and conducted by Lancaster University Management School, says that much of the improvement in GCSE results may have been due to “grade inflation”, better teaching or pupils working harder. There are 83 academies, with another 50 planned for next September and a total of 200 by 2010. Academy sponsors and headteachers are being canvassed in the review - described as “an intensive piece of work to help Department for Children, Schools and Families gather lessons learned so far in addressing disadvantage…and the culture of under-attainment in the most challenging communities”. Further information Guardian 13.11.07, 19.11.07
London plans a ban on plastic bags; following overwhelming public support all of London’s 33 boroughs have agreed to plans for London to become the world’s largest plastic bag-free city within 18 months. Westminster Council will present a private bill to the House of Commons on 27th November, which will apply to every shop in London from Harrods to the corner newsagent. Shoppers will be encouraged to use sturdy plastic “bags for life” or cotton or string hold-alls. At present 1.6bn plastic bags are used every year in the capital and only one in 200 is recycled. London joins over eight villages, towns and cities in the UK, including Brighton and Bath, which have introduced or are considering bans, since shops in the Devon market town of Modbury went “plastic bag-free”. Overseas places as diverse as Tasmania, Tanzania as well as Paris and San Francisco have already banned plastic bags. The ban, which could take years to come into force, is likely to be opposed by retailers such as Tesco, which prefer encouragement rather than coercion to change behaviour. Tesco says that it has cut its use of carrier bags by 1bn to 3bn after a high-profile campaign to give loyalty points to shoppers reusing bags. Sainsbury’s have cut plastic bag use by 10 per cent and Marks and Spencer is to start charging 5p a bag after a trial in Northern Ireland that cut the number used by 66 per cent. There has been resistance from trade bodies such as the Carrier Bag Consortium and the Packaging and Industrial Films Association. However Peter Woodall of the Association does admit that: “We are losing the hearts and minds of the public, who now certainly believe that the plastic bag is a hazard to health and the environment and something we need to eradicate from society”. Further information Independent 14.11.07
Gordon joins in; in a speech to the WWF charity in London the prime minister joined in the campaign against plastic bags. He announced that he was calling a forum with the supermarkets, the British Retail Consortium and others to assess how to get rid of plastic bags. Speaking after a UN report on climate change and two weeks before the Bali conference he warned that the rich countries might have to increase their targets for cuts in carbon emissions. He would be asking a new independent UK climate change committee whether Britain could increase its statutory commitment to reduce carbon emissions from 60 per cent to 80 per cent, and to include aviation emissions for the first time. The 60 per cent pledge is a feature of the Climate Change Bill currently before Parliament. Confirming his commitment to the EU target of generating 20 per cent of energy through renewables by 2020 he called for more work on wind farms and especially offshore wind farms as well as wave and tidal schemes pending the expected go-ahead for nuclear power stations next year. A renewable energy strategy would be published in the spring of 2009. He pointed to the new technology, which could halve motor car emissions by 2030. The climate change challenge facing the world required a fourth technological revolution. He went on: This represents an immense challenge for Britain. But it is an even bigger opportunity. If Britain maintained its share of growth in low-carbon energy industries, there could be more than a million people employed in environmental industries in this country. Further information Independent 20.11.07
Race to take the lead in carbon capture technology; over the next 20 years, at least 2,000 coal-burning power stations are expected to be built or revamped around the world, to add to the capacity for carbon capture and storage (CCS). Although the globe as a whole will benefit, as a lid is kept on carbon emissions, the countries to get the biggest dividends will be those that create CCS plants first and then export their skills and technology. The US, Australia, Norway and the UK are the front-runners, but the smart money is on the US, which may have a plant in commercial operation by 2012. The UK government is running a competition to launch its first full-scale CCS pilot scheme for coal-based power with the winner to be announced in October 2008 and the plant up and running for 2012-14. Coal-fired, rather than gas-fired power plants will be the main users of CCS and the retro-fit technology favoured by the UK is seen as ideal for such applications. In common with the UK, the US and Australia are moving down the coal route with Norway as the only one of the front-runners developing a gas-fired CCS system as its main project. The US company American Electric Power is developing an innovative, highly cost-effective system that uses ammonia to capture carbon, which by 2012 should be fitted to a plant in Oklahoma. AEP is also a member of the FutureGen consortium, which is developing a different type of CCS scheme to convert coal to hydrogen and electricity, which is getting US government funding. Another member of the FutureGen alliance is the China Huaneng Group, China’s version of Gazprom. Australia hopes to open its first CCS project in Queensland in 2012. Observer 11.11.07
Councils failing to plan cuts in carbon emissions; a survey by the Low Carbon Innovation Network says that three out of every four local authorities have no plans in place to reduce and monitor carbon emissions. The survey, which covered more than 200 of the country’s 468 councils, shows that despite the massive impact of emissions from council buildings- from offices to schools- five per cent had not initiated any form of emission reduction. Of those that had started the process half had not reached the stage of “identifying and appraising carbon reduction schemes”. Of those that have started one in ten were examining road pricing and three out of four would like powers to use council tax reductions to encourage homeowners to become more energy efficient. Further information Observer 11.11.07
New carbon standard launched; a new voluntary standard to certify the value of carbon offsets has been launched to provide reassurance to companies looking for ways to cancel out the effects of their activities on the environment. Developed by a range of business, government and non-governmental organisations, the Voluntary Carbon Standard aims to boost confidence in the carbon offset market and encourage companies to take a lead on tackling climate change by going carbon neutral. The organisations involved include the International Emissions Trading Association, the Climate Group, the World Business Council for Sustainable Development and the World Economic Forum. Further information Financial Times 19.11.07
London firms increasingly looking overseas for staff; the CBI’s latest London Business Survey, conducted jointly with KPMG, shows that businesses in London struggling to meet their skills needs are increasingly looking overseas for both graduates and lower-skilled staff. Two out of three of the 116 firms surveyed (65 per cent) expect to be troubled by skills shortages over the next six months and the majority (58 per cent) are already recruiting overseas to fill the gaps. John Cridland, deputy director-general of the CBI, said: “London is still a star economic performer, but its skills problems could be its undoing. Shortages are being felt across many disciplines and at all levels- from the fundamentals of the shop floor right up to top leadership. London businesses tell us that a shortage of UK applicants means they often have no choice but to recruit foreign workers for lower-skilled positions in areas such as catering and transport. When it comes to graduates there is far more choice, but many employers are choosing foreign graduates over British applicants because they are of higher quality and are more employable”. Ian Gibson, senior partner at KPMG, added; ”It’s economically wasteful and morally wrong for there to be so many unemployed people in the capital when there are so many jobs to fill”. Further information BBC News Online 16.11.07
The Mayor looks to Paris (and Barcelona); speaking at the Mayor’s Question Time at the London Assembly on 14th November Ken Livingstone revealed that, as part of his plans for the capital, he was keen to introduce two ideas from Paris- the bicycle hire scheme and the Paris Plage. He is planning to take up the bicycle hire scheme and believes that the Paris Plage concept could work even better in London. Every August since 2001, the right bank highway in Paris has been closed for two miles and covered in 2,000 tonnes of sand. The “beach” is dotted with palm trees and cafes and lined by a boardwalk, attracting more than 4m visitors. Ken Livingstone wants to replicate it on the Victoria Embankment beside the Thames. Other ideas considered is a ban on through traffic on roads connecting London’s parks and main shopping areas. The Mayor said that he wanted to create attractive tree-lined walkways in the style of Las Ramblas in Barcelona. Traffic would be diverted but shops and restaurants would still be able to receive deliveries outside peak hours. The first scheme will be the £18m part-pedestrianisarion of Parliament Square, which will involve removing traffic from the south side closest to Westminster Abbey from 2009. Further information Times 15.11.07
Croydon also gets inspiration from Barcelona; Will Alsop has published his masterplan for the centre of Croydon, which seeks to make Croydon a UK version of Barcelona. His plans include a 30-storey version of the Eden Project and, inspired by the regeneration of Barcelona after the 1992 Olympics, scores of public squares and miniature parks throughout the town centre. Glass apartment blocks will be linked by high-level walkways across the main Wellesley Road, which will be reduced from eight lanes to two. The River Wandle, which is currently buried in culverts, would be brought to the surface for the first time in 40 years. The population of the town centre would be boosted from fewer than 5,000 to 50,000 by the building of 20,000 new homes. The scheme, which is called Third City, will become part of Croydon’s bid to achieve city status and will start with a £450m urban regeneration vehicle set up by the Tory-controlled council. Jon Rouse, the council’s chief executive, said: “Croydon was a prosperous historic town in the 19th century and history books show that it was a really pleasant place to come. The Second World War completely blew it to bits. What grew up in the Sixties was one of the most wholehearted developments of Corbusian modernism. At the time it was seen as very exciting and pointed the town to the future. But it didn’t work and it became seen as an alien structure imposed on an historic settlement. Now Will Alsop is trying to bring the historic urban pattern back”. Further information Evening Standard 13.11.07
Westminster plans help for creative industries; concerned about creative businesses leaving the borough for cheaper areas such as Clerkenwell, the City of Westminster is considering forcing developers to subsidise the media, fashion and film industries. The council commissioned a report, Westminster’s creative industries, form GVA Grimley and the Burns Owen Partnership, which claims that spiralling rents are forcing out the traditional industries. It is now considering using section 106 agreements to provide affordable workspace for creative businesses. Camden adopted a similar approach in 2006 to support Hatton Garden’s jewellery businesses. The report says that: “Property prices and rents have risen sharply in recent years in Westminster because of demand from higher value sectors and uses. As a result, a significant number of creative businesses are struggling to compete”. West End rents range from £60 per sq ft for grade B space, to prime rents of £110 per sq ft. Last year the advertising firm Grey left the West End for Hatton Garden for around £35 per sq ft. In April Espirit joined a growing number of fashion houses- including Kookai, Timberland, Ben Sherman, Morgan and TM Lewin in relocating to Clerkenwell. Westminster has been running a creative industries conference from 9th-14th November. Further information - LB Westminster and Creative Clusters Estates Gazette 10.11.07
Ticket levy proposed to save West End theatres; an investigation into the decaying theatres of London’s West End is likely to recommend the introduction of a surcharge on tickets to fund the restoration of the crumbling buildings. The Economic Development, Culture, Sport and Tourism Committee of the London Assembly has set up an investigation into the state of the West End under the rapporteurship of Bob Blackman. This is due to report in February. Further information Observer 18.11.07
London buys hydrogen buses; a fleet of ten hydrogen-powered buses is to join London’s bus fleet by 2010. Transport for London has signed a £9.65m contract with ISE of the United States to supply five hydrogen fuel cell buses and five hydrogen internal combustion buses- one of the first major commercial contracts of its kind and the first for any European city. The government has made a £2.6m grant for the buses, which produce no pollution or carbon dioxide. Further information - GLA and Hydrogen Bus Alliance Times 14.11.07
Million people flock to historical blockbusters; London is in the grip of a fever for all things archaeological, with the opening of exhibitions devoted to the two greatest archaeological discoveries of the 20th century. A combined total of nearly a million tickets have already been sold for the arrival of the soldiers from the Terracotta Army and the adornments of the Egyptian Boy King Tutankhamun. Such is the enthusiasm for the Terracotta Army that the British Museum has been forced to extend its visiting hours to midnight and it may yet open for all-night viewings. It originally predicted that the display of the life-size warriors, among more than 120 objects lent by China, would attract 400,000 visitors during the show’s seven-month run. Almost 470,000 tickets have been sold in two months. Across London at the O² centre, Tutankhamun and the Golden Age of the Pharohs has already sold 400,000 tickets. More than a million people are expected to see the 130 exhibits. Further information - British Museum and Tutankhamun Exhibition Times19.11.07
Ministers to press ahead with push for third runway; the Observer predicts that ministers are going to press ahead with a public consultation on building a new runway and terminal at Heathrow, the clearest signal yet that its controversial expansion will go ahead. But the consultation may be overshadowed by evidence that BAA, the airport owner, has been closely involved in shaping its remit and in supplying data. When Ruth Kelly, the transport secretary, launches the three-month consultation she will also publish the results of a four-year study expected to say that a third runway and a sixth terminal could be built without exceeding noise and pollution limits. The exercise is also expected to seek public support for using Heathrow’s existing runways in ‘mixed mode’. At present one runway is used for landings and the other for take-offs, but in future both could be used for arrivals and departures simultaneously, allowing the airport to handle more services. Mixed-mode operations could be in place by 2015, and a third runway by 2020. According to figures released by the Association of European Airlines, Gatwick and Heathrow had the worst record for delayed flights this autumn. They are also the most congested airports in Europe. Further information Financial Times 17.11.07, Observer 18.11.07
Londoners to get £90m to train for Games jobs; as part of the new skills drive, John Denham, the skills secretary, has injected nearly £90m extra into the Adult Skills Budget for Greater London whose budget will now rise from £588m to £672m in 2010. The extra funding is intended to ensure that British people have no excuse in losing out to migrants in the employment bonanza sparked by the Games. Some 30,000 jobs are set to be generated ahead of the Olympics, but the latest figures show that there are more than 100,000 people of working age who are unemployed in the boroughs nearest to the site. The minister wants to target jobs in four sectors-sport, customer service, medical and construction. Evening Standard 16.11.07
Builders refusing to bid for Games projects; building contractors are refusing to put in bids for venues at Olympic Park because the projects carry too much risk and too little profit. Wates and Kier, two of the biggest construction companies have decided not to bid for any contracts. The Olympic stadium and the aquatic centre have so far attracted one bid each. The Olympic Delivery Authority (ODA) had expected thousands of companies to show interest in the contracts. But the construction industry is thriving and the biggest companies are worried about the risks and the bureaucracy involved. There is also the shadow of the Wembley and Cardiff stadiums, which were built way over budget at the contractors’ expense. Insiders admit that the shortage of willing contractors will push up prices. Tough employment decisions built into contracts- including direct labour, local labour and health and safety regulations –are also forcing up costs. The management consultants CLM have been called in to oversee construction costs. The Olympic stadium has already doubled in price to £500m and the aquatic centre, priced originally at £75m, is now expected to cost at least £150m. Balfour Beatty is the only bidder left for the aquatic centre. Tenders are now being assessed for the media centre, the velodrome and the multi-sports centre. Graham Watts, chief executive of the Construction Industry Council, said: “The ODA has too many masters. These include the International Olympic Committee, Ken Livingstone, the DCMS, the Treasury, Gordon Brown, the Olympic Board and the five London boroughs”. Times 14.11.07
Diageo to be become a major sponsor? the organisers of the London Olympics are negotiating with Diageo for an £85m sponsorship deal. If agreed, it would join Lloyds TSB, Adidas and EDF Energy as prime sponsors. Part of the deal will be for Diageo’s brands such as Archers, Smirnoff and Baileys, to have exclusive rights to the bars of the Olympic stadium and other venues. The Sunday Times says that all three brands have been criticised for their appeal to young people and their contribution to binge drinking. Diageo is a sponsor of the McClaren Formula One team. So far, Locog has raised £225m in sponsorship. The operating costs of the Games are expected to be £2bn, all of which must come from private sources. The sponsorship target is £750m. Sunday Times 11.11.07
City rents heading for a fall in 2009; rents in the City of London will fall for the first time in six years in 2009, according to Jones Lang LaSalle (JLL). They have told their clients that a pause in large-scale demand as a result of the current market turmoil will cause prime rents to flatten in 2008, and fall by 5.3 per cent the following year. JLL said that while potential demand was up 30 per cent on last quotes, active demand was down 13 per cent because of large occupiers pulling back from making decisions in the current crisis. There are some large buildings coming on the market in the second half of next year including 440,000 sq ft in Aldersgate and 200,000 sq ft in Cheapside but JLL say that they do not see demand soaking up the extra space. The West End is not expected to be hit as hard as the City, as its financial occupiers are more insulated from recent financial events. JLL predict that prime rents in the West End will flatten next year before climbing in 2009. Estates Gazette 10.11.07
5 million square feet of offices proposed for Wood Wharf; the long-awaited masterplan for Wood Wharf, a 17-acre site next to Canary Wharf, have been unveiled by the consortium of British Waterways (owners of the site), Canary Wharf and Ballymore. Outline plans prepared by Rogers Stirk Harbour call for the same amount of space as King’s Cross Central but on a site a quarter of the size of the King’s Cross regeneration in what would be the highest density building project seen in London. In addition to 5m sq ft of office space there would be 1,400 flats as well as shops and recreational and community facilities including a community park to be designed by US landscape architect Martha Schwartz. Discussions are taking place about the amount of affordable housing in the scheme. Further information Evening Standard 16.11.07
Really Useful puts theatre up for sale; Andrew Lloyd Webber’s Really Useful Group has announced that it is putting the New London theatre in Drury Lane up for sale. The theatre, which was a replacement for the old Winter Garden at the northern end of Drury Lane, was one of eight in which he bought back a controlling interest seven years ago. He intends to keep the other seven. It is thought that the 1,020-seat venue, which is best known as the home of Cats, will fetch between £15m and £20m but could fetch more if it is bought as a redevelopment opportunity. The theatre is currently the home of the RSC’s tour of King Lear and the Seagull featuring Ian McKellan. In April 2008 it will become the home for a new musical based on Gone with the Wind being directed by Trevor Nunn. Estates Gazette 17.11.07
New contender for London’s priciest flat; a Monaco and Switzerland-based private family trust chaired by a Greek shipping tycoon is hoping the build the most expensive flat in London at 7-8 St James’s Square. The prime West End development site has planning permission for 80,000 sq ft of offices, but Achillakis’s Pacific Group, is about to lodge alternative plans, designed by architect Hamiltons, to build eight luxury flats. A source said that Pacific has attached a £105m price tag, or more than £5,000 per sq ft, to the 20,000 sq ft penthouse suite. This is more than £5m more than Sheikh Hamad, the foreign minister of Qatar, paid for the largest flat in the Candy Brothers’ One Hyde Park in Knightsbridge in March. The other flats will be marketed at between £60m and £80m. Estates Gazette 17.11.07
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Next issue on 13th December 2007
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