Brown outlines ten year vision; announcing that the pre-Budget report will be published on 6th December the chancellor Gordon Brown (pictured right) has also set out his ten year vision for Britain. He said that further reforms were needed to prevent the UK falling behind in the global economy, with the three main challenges facing Britain being globalisation, security and the environment. He said that he will address some of the crucial long-term challenges for the economy in his report, and react to a series of reports commissioned by the Treasury on the transport system (Sir Rod Eddington), skills training (Lord Leitch) and planning (Kate Barker). He has already published two reports on climate change (Sir Nicholas Stern), and relations between HM Revenue and Customs (HMRC) and big business (Sir David Varney). He is expected to announce that economic growth has outstripped the Treasury forecast of 2-2.5 per cent. Given the state of the economy and public finances, decisions on tax and spending are likely to be more modest than those implemented in the 2005 pre-Budget report. Financial Times 17.11.06
Brown breakfasts with business leaders; Gordon Brown has held the first of his breakfast meetings with his International Business Advisory Council, made up of eight notables from Europe, the US, Hong Kong, India and the UK. This was followed by a meeting with 80 British business leaders at what was billed as the ‘Business Advisory Summit’. The meetings were closed to the press but one person present at the breakfast meeting said that it started withplenty of praise for the UK’s generally open economic environment. However several issues then, with the longest and sharpest discussion centred upon the UK skill base. There was doubt as to whether the UK was generating enough science and mathematics graduates, and whether enough people are being trained in basic skills. There was also questioning about what the UK was achieving in deregulation. Further information - Click here Financial Times 17.11.06
Defending globalisation; Hamish McCrae (pictured left) writes about the chancellor’s ‘Business Advisory Summit’ which focussed upon globalisation. He argues that globalisation needs to be defended and explained, and that the UK might need to respond better to it. He quotes one participant as saying that the problem with globalisation is that “even the winners feel like losers”. McCrae says it is not hard to see why; as a rule, globalisation reduces inequalities between countries but increases inequalities within them. The developed countries gain because everyone is able to buy cheaper imports. However, the low-skilled find themselves competing against people from the other side of the world who will do the same work for lower wages. To maintain social cohesion under these pressures is crucial to maintaining support for an open world economy. The government alone cannot defend it - there will have to be help from private companies and not-for-profit institutions. It will also be equally hard for an open economy such as the UK to maintain its competitiveness. McCrae says that one issue that did emerge at the summit was an awareness that taxation and regulation are important tools in international competitiveness. Talking to one business leader made McCrae aware of the level of anger in the business community about the burdens that the government has placed on it. A concern about education at every level also arose - with particular criticism that too many students are taking what seems to be softer arts degree courses, rather than the harder science ones. The truth is that we do not know what the jobs of tomorrow will be. But the only way to respond must be to go up-market, which means not only a more skilled workforce but a more adaptable one. Independent on Sunday 19.11.07
Retailers expect better Christmas; UK retailers are expecting a better Christmas than last year according to the American Express retail monitor. This shows that 48 per cent of UK retailers believe that Christmas sales will be better than last year when several high street chains offloaded stock in the January sales. The retailers are also more optimistic about the year ahead, with 62 per cent expecting an improvement on the past twelve months. The holiday period, which accounts for more than a quarter of annual sales, follows on a Confederation of British Industry (CBI) report that there was a sharp drop in sales in October with unseasonably hot weather denting sales of clothing and footwear. A later set of official statistics shows that high street shops reported a 0.9 per cent rebound in sales - the largest monthly rise since November 2005. Further information - Click here Independent on Sunday 12.11.06, Independent 17.11.06
Does manufacturing matter any more? Anatole Kaletsky (pictured right) writes on the economic prospects for Britain and Japan. He says that the world has changed so much since the days of Japan’s successes that the ideas of that period are useless as a guide to economic policy today. Japan pulled out of a decade-long stagnation two years ago and, assuming that its policymakers can avoid obvious errors, such as raising interest rates too quickly, it will not relapse into recession any time soon. However nobody in Japan believes the economy can ever again match the growth rates of two to three per cent that are taken for granted in the USA and the UK. Part of the problem is demography and a shrinking workforce, but a much greater problem, also found in Germany, is a reluctance to admit that the conditions for success today are almost the opposite of the ones that prevailed in previous years. The emergence of China, India and other developing countries has brought three billion new workers and consumers, and made it possible for the whole world economy to function as one. Manufactured goods can be made anywhere with the result that prices are falling relentlessly. This outsourcing, has in turn, created a new type of business called “the platform company”. They sell everywhere and produce nowhere - businesses such as Nokia, Apple, or L’Oreal. The concept of outsourcing is familiar enough but its macroeconomic implications are less well understood. For example it has made Western economies far more stable which has, in turn, made high levels of borrowing both safer and more attractive. This has enabled countries that embrace high levels of borrowing and financial sophistication such as the US, the UK and Spain to take advantage of excessive savings in more conservative countries such as Germany and Japan. These processes of global specialisation, outsourcing and financial deregulation have all been beneficial to Britain, which has a clear comparative advantage in finance and other services that facilitate global commerce. The upshot is that Japan and Britain have reversed the relative positions they occupied in the post-war decades. Times 10.11.06
Two different housing markets; the latest Financial Times (FT) house price index shows that there are two distinct housing markets in England and Wales - a booming market in London and near stagnation elsewhere. If this divide continues it could present problems for the Bank of England’s Monetary Policy Committee as they weigh the likely impact of interest rate movements. By the end of the third quarter, London house prices had risen at an annualised rate of 11 per cent, while Wales, the region with the second fastest price rises, recorded an equivalent rise of 4.5 per cent. Prices have been falling in the North-East and the East Midlands and barely registered any rises in the rest of England. The reason for London’s success is attributed to the strength of the City and financial services ensuring big bonuses as well as overseas wealth from petrodollars or other businesses in Russia, China and India with the consequence that one in five of the most expensive properties in London are bought by overseas residents; and third, a massive supply shortage. Peter Williams, chairman of Acadametrics, the consultancy that compiles the FT house price index, said that there was a good chance that the regional divide between London and the rest of the country would continue. Such a divergence will make it awkward for the Monetary Policy Committee as it suggests that the correct interest rate may be too low for London, further fuelling an already hot housing market, while pushing prices downwards elsewhere. Further information - Click here Financial Times 11.11.06
Charm offensive on red-tape; the FT says that ministers are spearheading a red-tape charm offensive on business, in an effort to garner support for a government promise of multibillion pound regulatory cuts to be launched in the next few weeks. Given the scepticism engendered by repeated promises to tackle excess regulation, the chancellor is anxious that the latest announcement does not prove to be a brief success. A total of 17 Whitehall departments and regulators have drawn up “simplification plans” setting out their proposals to reduce the burden of red-tape they impose on both the public and private sectors. The plans will set out targets for cutting the administrative burden imposed on business, typically by 25 per cent over a four to five year period. The total cut in the first year is believed to be £5bn. Plans to set up a “local better regulation office” will be implemented using a draft bill announced in the Queen’s Speech. The new body will form part of the Department for Trade and Industry’s expected pledge to reduce the regulatory costs it imposes on business by £1bn over five years. Financial Times 17.11.06
‘Culture change’ for HMRC; speaking at the first gathering of the International Business Advisory Council the chancellor announced that he had accepted in full the recommendations made by Sir David Varney (pictured right) on how to make the British tax system more responsive to the needs of big business. The chancellor was responding to complaints from employers groups that the complex and adversarial nature of the British tax system was deterring investment. It was also making at least one major UK company, HSBC, rethink its UK domicile. Varney sets out plans to foster greater clarity, certainty, speed and confidence in companies’ dealings with the HMRC. A key part of the plan will be an arrangement for large companies to be able to obtain within 28 days a guaranteed advance and legally binding ruling from the tax authorities on significant strategic plans or projects before they are implemented. The Treasury will consult on the Varney proposals in detail at the time of the spring budget, with the changes to be in place at the end of 2007. Further information - Click here Times 17.11.06, Guardian 17.11.06
Big increase in late payments; a survey undertaken by BACS, the electronic payments specialist, says that problems with late payments have increased sharply in the last 12 months and that £16bn is owed in late payments to small and medium-sized businesses. The survey of 500 SMEs found that 59 per cent were experiencing problems with delayed customer or supplier payments, almost twice as many as in a similar survey in 2004. The average amount owed was £22,000. BACS and the Better Payment Practice Campaign advise business owners to use direct debit to speed the recovery of money from invoices. Further information - Click here Financial Times 11.11.06
Social enterprise to get a boost; a series of measures to promote social enterprise within schools, banks and government were announced by the chancellor who hailed the sector as “a new frontier for enterprise”. He also hinted at tax concessions in the next budget probably through a review of the Community Investment Tax Relief scheme. The regional development agencies will receive an extra £5.9m between 2007 and 2011 to provide support to social enterprises through the Business Links. A £10m fund has been set up which the government hopes banks and others will match to improve access to capital, and, it is hoped “demonstrate the viability of investments in social enterprise”. Social enterprise will also be given a more prominent place in the school curriculum and an awareness programme launched at younger people. Further information - Click here Financial Times 17.11.06, Regeneration 17.11.06
European Union’s services directive gets the go-ahead; the EU’s services directive, which makes it possible for service companies to set up in any EU member state, has won the backing of the European Parliament. Over the course of three years of negotiation the power of the directive has been watered down so that one British MEP described it as “perhaps liberalising half the market”. The French were one of the most resolute opponents, fearing an invasion of Polish plumbers, and they gained one key concession that service providers operating abroad have to obey the labour laws of the host country rather than that of the country of origin. That change is designed to avoid a “race to the bottom”, under which firms from countries with weaker social protection, particularly in eastern Europe, undercut competition. It will now go to the EU governments for ratification although many have already given the green light. It is expected to come into force in 2010. Further information - Click here Independent 16.11.06
Numbers of French grocers may be on the increase; with the active support of President Chirac (pictured right) it looks as though the drive to reverse the decline of French village shops and urban corner stores may have turned a corner. President Chirac, who announced the latest tax concession for “micro-businesses” on 14th November, has seen his campaign rewarded largely due to immigrant families from north Africa who have now become the guardians of this aspect of French culture. The number of grocers in France had fallen from 125,000 in 1970 to 28,500 in 2000 but it now appears that the figure has stabilised and has started to rise. Épiciers Expo, the first trade fair for French grocers, was held last week at the Paris Exhibition Centre. It featured four model stores - the village store, the late-night shop, the urban shop and the up-market grocer. Amongst Chirac’s measures has been a ban on price-cutting by supermarkets, as well as a ban on Sunday openings unless permission is granted, which so far has been closely guarded. Small shopkeepers are consequently worried as to what will happen if Chirac’s political party is not re-elected next year. Further information - Click here Times 15.11.06
Barges become business space; British Waterways has won planning permission for four business barges at Hale Wharf in Tottenham. The scheme, which is part of a wider set of improvements to the public realm, will cost £1m, which will be spent on building, the barges, and two moorings for which permission has been given. The barges are expected to be occupied as exhibition space, cafes, restaurants or other commercial spaces. Further information - Click here Regeneration 10.11.06
Terrorist hotbeds are a fantasy says study; Muslims living in isolated groups are no more likely to become involved in terrorism than those living in mixed areas according to a new report published by Manchester University. The study concludes that terrorist hotbeds are a fantasy and concludes that Islamic terrorists are as likely to come from towns and cities with small Muslim populations as from so-called “self-segregating” Muslim areas. The Manchester study examined the case of 75 Muslims charged with terrorist offences. It looked at the areas they came from and examined what proportion of the population were Muslim, as stated in the 2001 census. They could not look at the background of those convicted as only nine of the 27 people found guilty of terrorist offences since 11th September 2001 are Muslim, and this would provide too small a sample. The study is firm that “Muslims charged with terrorism under UK legislation are no more likely to come from districts where the highest proportion are Muslims, than from other districts”. They point to Beeston in Leeds where three of the four 7th July 2005 bombers lived, which has a Muslim population of three per cent. Further information - Click here Guardian 20.11.06
Banks urged to give poor a better deal; a report on financial inclusion issued by the Treasury Select Committee urges banks to stop treating poorer customers who want open bank accounts like “second class citizens”. It says that some banks do not allow basic bank account holders access to bank counters. Basic bank accounts, which do not include overdraft facilities, were introduced in agreement with the government to help tackle financial exclusion among poor people. So far, 6.5m of such accounts have been opened. Further information - Click here Financial Times 20.11.06
Has Brown delayed Lyons until 2007? The Times carries a report claiming that it has learnt that the publication of the Lyons report on local government finance has been put off until February 2007 at the earliest amidst fears that it could produce a backlash in next year’s council elections. The government may also delay its reactions to the report. Sir Michael Lyons (pictured right), who will deliver his report to Gordon Brown and Ruth Kelly on 21st December, is expected to recommend a series of local charges for services such as waste collection and a tourist tax for bed and breakfast accommodation. It may also suggest changes to business rates despite widespread opposition. He is said to be reconsidering an option that would widen and increase the number of council tax bands, which could add several hundred pounds to household bills. Any postponement would mark the fourth time that ministers had ducked the issue since the first review into town hall finances in 2003. Tony Travers of the London School of Economics said that the delay indicated a loss of nerve at the top especially after the uproar about Sir Peter Burt’s proposals to impose an individual property tax in Scotland, which would have doubled bills for some homes. Travers goes on, “Labour and Conservative frontbenchers regard the poll tax [scenario] as their worst nightmare and would do anything to avoid a repeat of the damage inflicted upon Mrs Thatcher by the policy”. Times 20.11.06
Select Committee attacks planning gain plans; the House of Commons Select Committee on Communities and Local Government has warned of “significant risks” in the government’s plans for a planning gain supplement. It has been claimed that the government is thinking of abandoning the idea of a proposed tax on the rise in the value of land when planning permission is granted in favour of a “roof tax” on completed projects. The Select Committee, which is chaired by Dr Phyllis Starkey (pictured left), warns that “a huge amount of work”, including statistical modelling and cost-benefit analysis, would have to be carried out before the Planning Gain Supplement (PGS) could be implemented. They warn that PGS must be set at the correct rate from the outset if it is to have any credibility. They also want to know how PGS would sit alongside section 106 agreements. A further report on PGS is due from the Treasury in the next few weeks but Paul Beausang, tax partner at Nabarro Nathanson, said that a date of 2008 was “looking increasingly difficult to meet”. Further information - Click here Estates Gazette 11.11.06
North-South divide ‘starting to close’; the latest annual index of regional competitiveness shows that the north-south gap is starting to close for the first time since the index was launched in 2002. London, the south-east and the east of England all suffered a decline this year, whereas the other nine regions have all witnessed significant boosts to their competitiveness. The Work Foundation says that the regions that have made the biggest strides are Northern Ireland, Yorkshire, Wales and the north-east. However, although the gap has closed, the report shows that there is still a stark divide either side of the line running from the Wash to the Isle of Wight. The three big regions remain the only areas performing above the UK average level. Robert Huggins, senior lecturer in enterprise at Sheffield University, who devised and compiled the index, said that the government’s devolution and regional development policies might finally be bearing fruit. London, however, remains an economic powerhouse. Out of the 25 most competitive localities, 23 are in London and the south-east and two are in the Eastern region - St Albans and Watford. The index claims to be more accurate than traditional models which rely on GDP per head. It looks at research and development spending, business start-up rates and the proportion of working age population with a degree, as well as productivity measures. Further information - Click here Independent 13.11.06
Lorries may be allowed to deliver at 05.00; curfews on night deliveries may be reduced or scrapped under new government guidelines designed to reduce congestion and pollution during the day. Ministers believe that thousands of lorries would be removed from the roads in peak time if local authorities allowed supermarkets and other retailers to receive deliveries from 05.00. A survey in 2012 by the ten major retailers found that if half the curfews were lifted they would be able to retire 630 lorries - or ten per cent of their fleets. The distances travelled would also fall by 63m miles, saving 36m litres of fuel and 96,000 tonnes of carbon dioxide emissions. The Department of Transport guidance tells local authorities that they should relax curfews if “night time/early morning deliveries are desirable for the business [and] noise and light will not disturb neighbours as a result”. It encourages local authorities to consider that modern lorries are much quieter. Further information - Click here Times 13.11.06
Kelly considers separate city regions legislation; Ruth Kelly (pictured left), the communities and local government secretary, has said that she is considering separate legislation from the pending local government bill in order to devolve power to city regions. She told the New Local Government Network that devolving power to major conurbations would require separate legislation and the department was considering such a bill for 2007. She said that she was considering devolving power to England’s eight biggest city-regions outside London. The cities are currently drawing up business plans outlining how their city regions would be managed and governed. Further information - Click here Regeneration 10.11.06
Will Ebbsfleet become the new Reading? Knight Frank recently published a report on the Land Securities development at Ebbsfleet in north Kent saying that it could attract firms away from Thames Valley office hot-spots such as Reading. As Ebbsfleet is, in effect, effectively a new town on a hitherto unfashionable border with Greater London, the report raised more than a few eyebrows. Even Michael Ward, chief executive of the Kent Thameside Delivery Board, says that “Ebbsfleet is not a place at the moment, it is something that is about to become a place”. One of the keys will be the European railway station, which will provide direct links to Paris and Brussels from next year, and a 15 minute journey to Central London from 2009. Land Securities have an 8.5m sq ft scheme surrounding the station with the potential for 4m sq ft of offices alongside shops, a hotel, leisure facilities and 3,400 homes. Ultimately 1,000 homes will be built. The issue is whether Land Securities are willing to go ahead with its office developments speculatively or wait for pre-lets. A spokesman for Land Securities says that whatever happens they want the first phase built by the time the rail line to London opens in 2009. They refuse to say how big it will be but claim that it will be “substantial”. Estates Gazette 17.11.06
Back-to-work pilot deemed ‘ineffective’; a government scheme designed to give incapacity benefit claimants confidence to return to work is rarely effective, according to the government’s own research. An in-house report for the Department for Work and Pensions (DWP) into the pilot Pathways to Work initiative, run by Jobcentre Plus, finds that few claimants changed their generally-held view that they were unable to work, although the pilot did improve clients’ morale. A DWP spokeswoman said that plans for voluntary groups to take over the pilot would be included in the forthcoming welfare reform bill. She added that the scheme was dealing with some of the hardest groups to help back into work, so it was unlikely that it would cause a transformation in attitudes overnight. Further information - DWP - Government welcomes poverty report Regeneration 10.11.06
However…results look different; official statistics show that the number of people aged 50 or over with jobs has risen by 1.7m to 7.64m since 1997. It is the biggest percentage rise of any age group. Some 400,000 have chosen to work on beyond the state pension age, taking the employment rate for pensioners to a record 10.9 per cent. Government welfare-to-work programmes such as New Deal 50 Plus and the emerging Pathways to Work are given some of the credit. The 50 Plus scheme has helped 150,000 older workers back into employment since 2000. The total number receiving incapacity benefit under Labour has risen by 71,890 to 2.69m but has started to fall sharply in the past two years - declining by 50,000 in the past financial year. However Patrick Grattan (pictured left), chief executive of The Age and Employment Network (TAEN), argues that the government will have to work harder if it is to hit its target of raising the employment rate, currently at 74.5 per cent, to 80 per cent. To achieve this one million workers aged 50+ will have to find employment. In addition another 1m will need to come off the 2.69m on benefit. The government has, until now, had a number of factors on its side, not least that the changing age profile has coincided with a period of economic growth. Thus according to TAEN, 800,000 of the 1.3m extra jobs for people over 50 has come from the post-war baby boom reaching that age. Whilst the introduction of age discrimination laws has made employers reconsider their attitude to older workers, jobs for the over 50s are often low and low paid, with employment growth concentrated in sectors such as retailing, low-grade financial services jobs and lower skilled occupational jobs. Further information - Click here for ONS and here for TAEN Financial Times 17.11.06
Confederation of Business Industry calls for business to have power over training; a CBI policy document calls for further education colleges to be stripped of the £3bn they receive from taxpayers and for businesses to be given the power to decide how best to use the money for staff training. The employers group says that the skills crisis is more likely to be solved if the money is channelled through the Train to Gain programme that allows businesses to tailor their own courses. In a bid to pre-empt the Leitch review on the skills crisis, due to be published with the pre-Budget Review on 6th December, the CBI also calls for a cull of the plethora of agencies responsible for skills and training. Further information - Click here Financial Times 20.11.06
Lack of social skills holding back the poor; failure to teach children skills such as communication and self-control is widening the gap between the rich and poor according to an Institute of Public Policy Research (IPPR) report. It says that the shift to a more service-based economy has made personal and social skills just as important as academic qualifications. The report says that the best way to acquire these skills, other than through family, is through structured activities where children mix with others of different ages and backgrounds, mentored by adult activity leaders and working towards specific goals. One of the best methods is to run such activities at extended schools, which have extra-curricular programmes. Further information - Click here Regeneration 10.11.06
Universities to get extra money for places for the poor; Britain’s elite universities have been warned that they could forfeit millions of pounds in a shake-up of higher education. David Eastwood (pictured right), head of England’s university funding council, has told the Times that universities that admit a large number of students from poor backgrounds were likely to receive as much public funding as those that concentrate on research. The shift will make it harder for middle-class students to get places at university. At present almost a third (32 per cent) of all research funding goes to five institutions: Oxford, Cambridge, Manchester, Imperial and University College London. These admit the fewest number of students from poor backgrounds. They said that they feared that they would have to fight harder for fewer funds and would struggle to compete with competitors, particularly in the US. Times 21.11.06
Universities to bid for private training; universities are to launch a big push to gain market share from private companies specialising in professional education and the training of workers, according to a strategy document published by the Higher Education Funding Council for England (HEFCE). The plan outlines the ambitions of the higher education sector to play a much greater role in the provision of advanced level skills needed by employers, and to fall in line with the government desire for universities to help increase national productivity. A series of pilot projects to be run by HEFCE will examine how universities can “increase their share of the continued professional development currently delivered by private training providers, such as by accrediting employers’ existing in-house training, supplying various services such as accreditation of prior learning, curriculum design and assessment”. It will also look at the potential for higher-level learning amongst smaller firms. Further information - Click here Financial Times 15.11.06
Make You Mark with a Tenner; students at Stockwell Park School have been challenged to claim £10 each by promising to turn the cash into more money within a month, without menacing their peers. The scheme is the brainchild of Make Your Mark with a Tenner which has been funded with £100,000 by Andrew Reynolds, a marketing guru with close links to the Prince’s Trust. Pupils who register with the scheme will have a month to create a new business before they have to repay the loan. Schools which return less than 60 per cent of the loans will be barred from participating in the future. As an added incentive the 50 pupils who make the most profit, and the 50 who make the most social impact, will win prizes. The project is loosely inspired by the success of social enterprises such as Jamie Oliver’s Fifteen, the Eden Project and Big Issue. Further information - Click here Guardian 17.11.06
UK support for climate change action is weakest in Europe; a Harris Interactive poll for the FT on energy attitudes in five European countries show that support for action is weakest in the UK. Although 77 per cent believed that man-made global warming is a fact, there was much less conviction that that they needed to pay a high price to do anything about it. On the question of building new nuclear power stations 34 per cent of the British public were in support either strongly or somewhat strongly, 33 per cent were either strongly or somewhat against, while another third were neutral. Asked whether they would be prepared to have a nuclear power station built within 65 miles of their home, just 21 per cent would support it. Only 44 per cent strongly or somewhat supported a charge on air travel, and 21 per cent would support Sir Nicholas Stern’s call for a sacrifice of two per cent of national income. Just under a third would be prepared to do nothing at all, while 36 per cent would pay less than one week’s wages. However the poll does show that the strongest support comes from young people and those living in the south. On some issues the support coming from women is significantly greater than from men. Financial Times 20.11.06
Centrica join race for first coal-powered power station for 30 years; Centrica, the owner of British Gas, has announced plans for a £1bn joint venture with Progressive Energy, a specialist “clean energy” company, in the race to build the UK’s first coal-powered power station for 30 years on Teeside. The plan is that the carbon created by the proposed plant will not be emitted into the atmosphere, but instead siphoned off and pumped into an empty North Sea oilfield for storage. It will be one of six “clean coal” projects involving carbon sequestration and storage (CSS) or other new, efficient technologies that have been announced in the past year by operators such as the German companies RWE and E.ON. However many of them will depend on as yet uncertain government support to get off the ground. The coal producers are awaiting the government’s energy review, which is due to be published early next year. Last month an official on the energy review team gave a bleak presentation on the energy gap that the UK will face in 2016. If new plants are built now, the UK will be short of 20GW - just under a third of current capacity. The closure of old coal plants that do not meet the stringent pollution standards, as well as the shutdown of old oil and nuclear power stations, account for the gap, along with predictions of an annual one per cent rise in electricity. However the attention upon coal is due to the new found realisation that even if new nuclear power stations are given the go-ahead they cannot be built in time. Equally there are concerns about being too dependent on gas, and the economics of offshore wind power are not proven. According to the DTI an efficient new coal plant is three times as expensive to run as a standard plant, and the “carbon cost” is also far higher. UK Coal is urging the retention of the aging coal-powered stations, whilst potential operators are calling for government support to develop the CSS technology. Independent on Sunday 12.11.06
Government berates supermarkets over packaging; thirteen of the UK’s biggest retailers have been criticised by a government minister for failing to meet their targets on reducing packaging and waste. Ben Bradshaw (pictured right), the local environment minister, called for “big improvements” over the next 12 months if they were to achieve significant cuts in the amount of waste produced by packaging of consumer goods by March 2010. By then the government target is for 70 per cent of all packaging waste to be recovered, mostly through recycling. This in turn cuts the amount of waste going into landfills. The reproach from Bradshaw will embarrass Tesco, Asda and Sainsburys, which have all pledged to make their businesses “more green”, for example by encouraging shoppers to use fewer carrier bags. He also urged them to focus on reducing food waste over the next 12 months. The food and drink industry accounts for ten per cent of all industrial and commercial waste, and packaging makes up 4.5m tonnes of household waste a year. In addition, people throw away about 5m tonnes of food a year. The Women’s Institute held a day of action against plastic packaging and demanded that the supermarkets start charging for carrier bags or offer a financial incentive for people who use their own bags. Further information - Click here Independent 13.11.06
Britain’s greenest restaurant opens at King’s Cross; Acorn House, a restaurant dedicated to demonstrating that a top restaurant can be green, opened its doors in Swinton Street at King’s Cross last week. It is the brainchild of Arthur Potts Dawson, the head chef and one half of Bliss Restaurant Consultancy, the company behind Acorn House. Formerly a head chef at the River Café and Jamie Oliver’s Fifteen, he says, “Normally, the chef is just involved in purchasing and preparing the food. But I know where my food is grown, how it is transported, how it is stored and I know where my rubbish goes”. Most of the food will come from local suppliers, the wine will be English, and the mineral water will be supplied by Belu, which makes bottles from biodegradable corn and gives all its profits to clean water projects. Goods imported from abroad will be brought in by boat. Setting an example to the industry is one of Bliss’s main aims. Arthur Potts Dawson and James Grainger-Smith (pictured above) his partner in Bliss, were instrumental in setting up and running Fifteen, and it was largely because of this that the Terrence Higgins Trust and the Shoreditch Trust are financing the restaurant and getting 78 per cent of the profits. Like Fifteen, Acorn House will be a training restaurant and will train ten people a year. Further information - Click here Independent 11.11.06
Doubts about “trendy roof turbines”; just as David Cameron gets planning permission for a turbine on the roof of his Notting Hill home and B&Q report that sales of turbines are rocketing, come doubts about their effectiveness. The Observer states that green campaigners are warning that rooftop windmills do little to cut greenhouse gases, may annoy your neighbours, cause vibrations that could damage your home, and produce only enough electricity to power a hairdryer. Friends of the Earth say that although they are a visible statement that “I’m doing my bit” there are other, more straightforward things that are much more cost-effective and more beneficial to the environment such as insulating your loft. In urban areas low wind speeds, turbulence and the presence of too many nearby buildings mean that wind turbines turn out to have less generating power than expected. Government advisory services agree. The Energy Saving Trust does not place wind turbines in the top ten tips for householders. In the Sunday Times Donnachdagh McCarthy, a well-known green activist, says that he installed a turbine on his roof in October 2005; “in the two months since I had my wind turbine refitted it’s produced 1.3c kilowatt hours. That’s enough to power a low-energy light bulb”. Observer 12.11.06, Sunday Times 12.11.06
London triumphs as New York faces loss of competitive edge; the London Stock Exchange has outperformed its New York counterpart for the second year running. According to PricewaterhouseCoopers, London has so far this year, hosted €15.2bn (£10.2bn) intellectual property owners (IPOs), many of them by companies based outside Europe, and is on course to beat its 2005 record of €19bn (£12.8bn). Last year was the first in which London raised more money than New York, which saw €17bn of floats. New placings on the New York Stock Exchange (NYSE) have raised €13.3bn in the first three-quarters of this year. The statistics will make grim reading for John Thain, head of the NYSE, who has complained that the US is losing its competitive edge. Wall Street has become concerned that foreign businesses are becoming increasingly unwilling to accept the expensive disclosure rules imposed on US-listed companies by the Sarbanes-Oxley law, which was introduced in the wake of Enron and other major accounting scandals. In particular, Sarbanes-Oxley is thought to have deterred Russian companies from seeking lists in America. There are two US groups lobbying for changes in Sarbanes-Oxley, one of which has the support of Hank Paulson, the US treasury secretary, but the Democrats takeover of both houses of Congress may make any relaxation of corporate laws less likely. However a new threat has emerged for London and all the other stock exchanges in the initiative by seven leading investment banks to set up a rival platform to national stock exchanges for the trading of European equities. Times 11.11.06, Observer 12.11.06, Independent 16.11.06
Now Ken joins in the persecution of Chelsea tractors; The London mayor, Ken Livingstone, has announced that he intends to charge the owners of gas-guzzling cars (anyone driving a car in excise band G with CO2 emissions above 225g per km) £25 to enter the congestion charge zone. The 90 per cent residents discount for those living within the congestion charge zone would also be scrapped. The current £8 charge would remain for all other vehicles except those in bands A and B, with less than 120g CO2 per km, which would pay nothing from 2008. The mayor plans to introduce the new levy in 2009 or 2010 but has asked Transport for London (TfL) if it can be introduced earlier. It will go out to consultation. Chris Macgowan of the Society of Motor Manufacturers accused Livingstone of launching “a war on the affluent”. He said, “families that need people carriers and estate cars, but who already pay the penalty through higher road tax and fuel costs, are set to be hit by the Mayor’s triple whammy”. Further information - Click here Independent 15.11.06
One in three Londoners born overseas; data produced by the Office for National Statistics shows that a third of Londoners were not born in Britain. The capital now has the highest proportion of residents who started life overseas, with the foreign-born population standing at 2.2m. This is an increase of 658,000 since 1997, whilst at the same time 150,000 British-born London residents have left, although they still account for 5m out of a total population of 7.3m. Indian-born residents make up the highest proportion of the overseas contingent with a population of 206,000 - an increase of 62,000 since 1997. Bangladeshis were second with 133,000 followed by the Irish with 114,000. There has also been a big increase in residents from eastern Europe with the number of Russians doubling to 14,000, Poles rising by 45,000 to 70,000, and 18,000 more Bulgarians at 19,000. There have also been big increases in Brazilians (up from 4,000 to 25,000), Zimbabweans (9,000 up to 29,000), and South Africans (doubled to 60,000). There are 49,000 Australians, 58,000 Americans, 12,000 Japanese and 43,000 Germans. Further information - Click here Independent 14.11.06
Park Royal promotes waste management centre; the Park Royal Partnership is to submit a proposal to set up a waste management centre on the industrial estate early in the New Year. They argue that such a centre could generate revenue to pay for public realm improvements and cut traffic congestion, as the new facility would reduce the number of waste disposal lorries on the estate, as half the waste would be dealt with locally. At present the estate generates 200,000 tonnes of waste a year and 48 waste management firms serve the businesses on the estate. Further information -Click here Regeneration 17.11.06
Minister confirms 2012 budget will ‘go beyond’ £2.3bn; Tessa Jowell (pictured right), the cabinet member responsible for the 2012 Olympics, has admitted for the first time that “nobody knows at present how much the London Games will ultimately cost”. Speaking to business leaders and officials from the British ParaOlympics Association, she said, “the costs will be more than £2.3bn because of the decision to accelerate the regeneration of the lower Lea Valley”. She also said that one of the unknown factors was the cost of security. However she went on, “none of this is a surprise or will set back the timetable for the planning”. Her statement follows the revelation that officials did not include VAT in the construction cost of the Games. Evening Standard 10.11.06
Costs likely to be £5bn; planners of the 2012 Games have admitted for the first time that the costs of staging the Games are likely to be over £5bn, compared to the original costing in the London bid of £2.4bn. The information came out in an emergency debate the Greater London Authority (GLA) held to discuss the issues behind Jack Lemley’s sudden resignation as chairman of the Olympic Delivery Authority (ODA). He had argued that the plans were running behind schedule, were over budget and were prone to political interference. Further pressure on costs has come because the ODA is not exempt from VAT as previously thought and there are likely to be increased costs for security and for the regeneration of the lower Lea Valley. A Treasury review of the 2012 budget is due to be completed before Christmas, and £5bn is regarded as a conservative estimate. It is thought that this will include a contingency fund of up to 60 per cent which the mayor labelled as “absolutely, breathtakingly ridiculous” arguing that it invited potential contractors to hike up their prices. Sources at the GLA claim that the 60 per cent figure is a shot across the bows to other government departments. Livingstone said that he would reluctantly support a 20 per cent contingency to preserve “unanimity” on the Olympic Board. He said that he could offer no guaranteed council-tax cap: Londoners currently pay an extra 38p a week towards the costs of the Games. To plug any gaps, the mayor called for a windfall tax on property development in the East End. He also urged the government to waive the VAT bill on the sale of Olympic Lottery scratch cards. The FT says that ministers will raid the National Lottery’s “good causes” budget to pay for the increased costs. At present the Lottery is due to contribute £1.5bn - £750m from a new Olympic game, £410m from the good causes budget, and £340m from lottery funding for Sport England. Independent 16.11.06, Financial Times 17.11.06
London Assembly says Olympic costs likely to be £8bn; the latest to enter the fray is the Greater London Assembly’s Budget Committee who the Observer reveals will discuss a document that says that the Games costs are now in the region of £8bn. They are basing this on evidence from official bodies and key figures involved in funding and delivering the event. The day before Tessa Jowell is to give evidence to the House of Commons Select Committee on Culture, Media and Sport. She will emphasise that there is a division between the costs of putting on the Olympics and the much larger expense of regenerating the East End. She says that people should bear in mind that large sums of money will be made from selling land and buildings once the event is over. Observer 19.11.06
Another threat to the budget; the Olympics could be hit with a £80m bill in landfill charges for removing hazardous waste from the Olympic Park site. Steve Davies, the London Development Agency senior project manager for remediation, told a conference that “in the worst-case scenario we are estimating 250,000 cubic metres of hazardous waste which could have to go to landfill”. Experts estimate that with the nearest landfill site in Bedfordshire, this would involve 20,000 lorry journeys. Landfill prices have rocketed since a European directive came into effect in July 2005. Because the Olympic Park is being built on a former industrial site there is a possibility of heavy contamination. The clear-up of the 500-acre site is due to start in December after the conclusion of the public inquiry into the compulsory purchase of businesses sited there. The Times suggests that a row about a toxic clean-up was the real reason for the resignation of Jack Lemley. Lemley claims that he had been anxious for the process of cleaning the land to begin as he was fearful that it was heavily polluted and could delay construction and send up costs. David Higgins, the chief executive of the ODA, said he is confident that the land “is not a highly contaminated site”. Independent 16.11.06, Times 18.11.06
Long-term jobs are likely to be less than promised; the number of long-term jobs created for local people created by the Olympics is likely to be far smaller than originally promised according to a report by Experian, the financial analysts. They say that thousands of permanent jobs for East Londoners are unlikely to materialise because of skills shortages and competition from outsiders. Instead, many roles will last weeks or months and “the number of jobs is relatively small compared with the number of unemployed local people”. Experian say that while the Games will provide “credibility” for other investment schemes, they cannot regenerate an area by themselves, despite £2.4bn of public investment. However if the government brings forward a further £2bn of planned regeneration site in Stratford, it will create many more long-term construction jobs. They estimate that the Games will provide 60,000 “person years” of construction jobs between 2005 and 2012 - 10,000 less than promised; 30,000 mainly temporary jobs involved in staging the Games and 6,700 jobs in retail, hotels, transport and entertainment, mostly lasting just for the Games. London 2012 has predicted that 12,000 jobs would be created post-2012. Further information - Click here Evening Standard 14.11.06
KPMG to leave the City for Canary Wharf; KPMG are to be the first of the major accountancy practices to leave the environs of the City and move to Canary Wharf. They have signed a £260m deal to house 4,400 staff in a 15-storey office block to be built alongside the headquarters of HSBC and Barclays. The building will be completed in 2009. The accounting firm will leave 2,200 staff at their current head office in Salisbury Square off Fleet Street. The move is seen as good news for Songbird, the AIM-listed company that has controlled Canary Wharf since a Morgan Stanley-led takeover two years ago. Until recently, the estate was dogged with high vacancy levels caused by the fall-out from the dotcom crash five years ago when many financial services companies cut staff and space. Now vacancy levels on the 7.9m sq ft estate have fallen to 5.6 per cent, compared to a peak of 13.5 per cent in December 2004. The group has planning permission to build more than 5m sq ft of office space on the original estate and east at Riverside South and North Quay. Financial Times 07.11.06
More confusion over Battersea Power Station; Parkview International has won planning permission for amendments to its proposals for Battersea Power Station. An amendment to its section 106 developer’s agreement will allow it to build 750 flats on neighbouring land, but it will also have to clarify the level of repair required at the disused power station. There had been fears that Parkview would shelve its plans for a leisure and shopping complex in the power station building whilst it pushed on with other elements on the site. However Robert Erskine, Wandsworth borough planner, said that the newly agreed amount of repairs would safeguard the power station scheme by tying Parkview to the project. Parkview said that the value of the work to be undertaken, including replacement concrete chimneys would be around £90m. In the meantime Irish developer Treasury Holdings is believed to have broken off negotiations because of a disagreement over the price. Renewed talks with Ballymore have also reached the same result. Further information - Click here Estates Gazette 11.11.06
Plans for Royal College of Art in Battersea; five architectural practices have been shortlisted to submit proposals for a Royal College of Art site in Battersea. The site is adjacent to the Royal College of Art’s sculpture building in Howie Street, just off Battersea Bridge Road. The five selected practices are Benson and Forsyth, Fielden Clegg Bradley, Haworth Tompkins, Urban Salon, and Keith Williams Architects. Further information - Click here Regeneration 10.11.06
Asian traders protest about Oriental City; tenants of the Oriental City shopping complex in Colindale (Brent) are protesting about the plans of Development Securities for a £200m redevelopment of the site. Development Securities, who bought the site last year, are stressing that the new Oriental City will be “bigger and better” with 30 per cent more space allocated to Asian businesses. However the tenants, who are mostly from the Chinese and south east Asian communities, fear that the plans to add other large shops will erode the distinctive nature of the complex, and that the two year time limit put on their return by the developers is too optimistic. Even though they are being offered alternative space they feel that the dispersal will lead to customers drifting away. Oriental City is a self-contained purpose built mall specialising in goods and foods from south east Asia, attracting between 8,000 and 10,000 visitors a week. It was built in the early 1990s as the Yaohan Plaza was initially aimed at the Japanese communities based in the north London suburbs. Independent 17.11.06
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