Latest inflation figures point to rate rise; the latest inflation figures published for the year until September, show that price pressures are more entrenched than the Bank of England thought, and make a rate rise in November almost inevitable. The annual increase in the consumer price index in September was 2.4 per cent, down from the 2.5 per cent in August, but a smaller fall than generally expected. Petrol prices were lower but prices rose in almost every other element of consumers’ expenditure. The figures for the retail prices index rose to 3.6 per cent, its highest level since June 1998, as the August rate rise increased mortgage payments, which are included in the Retail Prices Index (RPI). This will come as a big blow to the Treasury as the September figure is used to determine next April’s rises in state pensions, most benefits and tax allowances. It could cost the Treasury up to £1.5bn. It provides further shocks as the Chancellor’s spending plans had assumed that the RPI would increase by 2.65 per cent rather than 3.6 per cent. This will add further pressure in his battle to contain public expenditure in next year’s comprehensive spending review. Further information - Click here Financial Times 18.10.06
‘Curiouser and curiouser’; this is how the Financial Times guesses that Alice in Wonderland would have reacted if she had been in receipt of recent labour market data. These show that unemployment has hit a five-year high at 1.70m, whilst the number of people in work grew to an all-time high of 29.02m. The parallel growth in both employment and unemployment has left labour market experts puzzled with Professor Alan Manning of LSE (pictured right) saying, “I can’t immediately recall another period when this has happened, which suggests that it is unusual”. Most experts agree that the large number of migrants from eastern Europe has given the labour force a “supply shock”, with the workforce increasing by 1.8 per cent compared to the same period of 2005. The government has also succeeded in getting more long-term sick people to enter the workforce, as well as a steady flow of older people. Further information - Click here Financial Times 19.10.06
Item Club warns of £4bn black hole; the latest report of the Ernst & Young Item Club says that public spending will be £4bn deeper into the red than the Chancellor has forecast, even though economic growth is stronger than expected. Item is optimistic about economic growth, saying that rising stock markets and a renewed spurt in the housing market have seen the economy expend by 0.7 per cent in the third quarter, and that the healthy outlook will continue with growth of 2.9 per cent in 2007 and 2008. This has been helped by increased labour supply from immigration and older workers who are also keeping inflation in check. However, the Treasury has failed to trim “Whitehall’s profligate habits” and the spending deficit is likely to be £11bn for the financial year rather than the forecast £7bn. The Treasury says that the spending surge has been caused by a change in the timing of education grants. Further information - Click here Observer 22.10.06
THE CITY - TWENTY YEARS AFTER BIG BANG
The City has suddenly become the focus of attention with the leading political parties vying for its affections, and banquets being held to mark the twentieth anniversary of Big Bang.
Success through exposure to foreign competition; the Economist says that London’s success as a financial centre is largely due to an inspired piece of state intervention 20 years ago that opened the door to foreign talent and foreign capital. Out went minimum commissions and other restrictions, and in came a stampede of foreign firms. The government stood by and watched as they swallowed the old British firms that had previously dominated the City. The results are hard to argue with. London has kept its longstanding dominance of foreign-exchange trading; its share of over-the-counter derivatives has increased from 27 per cent in 1995 to 45 per cent in 2004. A fifth of the world’s hedge-fund assets (including 80 per cent of Europe’s) are managed out of London, compared to a tenth in 2002. Though London’s insurance market has suffered from tax competition, the City has powered ahead in services such as the law and ship-broking. In equities, the business Big Bang was designed to secure, London has hosted 172 international listings so far this year, compared with 134 in regulation-bound New York. There are threats, of course. Chicago has created the world’s largest futures exchange; there is a constant danger of over-regulation, either after the next scandal or from the EU; and London’s transport system is dismal and its property overpriced. Yet Britain’s politicians understand - or at least they say they understand - what the City needs. Further information - Click here Economist 21.10.06
City courtship must be more than words; a leader in the FT sums up the Chancellor’s (pictured right) meeting with leading City figures in the first gathering of the City Taskforce, which he announced in the last Budget. As both main political parties have gained mileage by discussing how they will help the City as a financial centre and boost UK competitiveness, the FT suggests that rhetoric is insufficient unless it is accompanied by action. The Chancellor’s meeting produced a flurry of small, well-trailed initiatives such as deregulating one aspect of marine insurance, and setting up a review of how the taxman behaves towards big business. Politicians’ role in promoting the City is limited. It should focus on three things: infrastructure, taxation and regulation. On taxation the priority should be simplification. A small reduction in the corporation tax rate would also help. On regulation, Mr Brown has a stronger record but there will always be fresh battles to fight. The Treasury's decision to regulate and protect the City’s regime from foreign incursion has been welcomed, but legislation comes with risks. The companies’ bill offers a salutary warning. Financial Times 19.10.06
City failing to exploit links with India; a new report prepared for the City of London Corporation says that Britain’s financial services industry is underestimating the attractions of India as a business partner. The findings, which also conclude that more could be done to win business in China, say that London is failing to recognize the advantage it enjoys, through links with people of Indian and Chinese descent living abroad. It says that there are 1.5m people of Indian descent living in the UK, including many entrepreneurs who could help develop trade between the two countries. Further information - Click here Financial Times 24.10.06
More and more business being done on broadband; figures released by the Office for National Statistics show that the value of UK internet sales by business, rose by 56 per cent in 2005, to reach £105bn. Much of this, £73bn, was business-to-business rather than sales to individuals, but both are rising fast. The total gross domestic product (GDP) for 2005 was £1,200bn, which suggests that approximately nine per cent of the economy was conducted online. A second publication came from the Organisation for Economic Cooperation and Development (OECD), which estimates every six months the broadband access among the G7 countries. Its latest figures show that the UK is now second behind Canada in broadband penetration. Outside the G7, Scandinavia, the Netherlands and Korea lead the table. In Denmark, nearly 30 per cent of the population has access to broadband, compared with a little below 20 per cent in the UK. However, there is evidence that commercial use of broadband is higher in the UK, with around 70 per cent of Britons buying something on online each year, more than anywhere else in Europe. Further information - Click here for National Statistics and here for OECD Broadband Statistics Independent on Sunday 15.10.06
UK leads inward investment table; the UK won more inward investment than any other country last year as foreign-based companies swept up British assets, taking advantage of the government’s relaxed attitude to the foreign ownership of companies. The final figures from the UN Conference on Trade and Development (UNCTAD) show that the UK attracted $165bn in foreign direct investment, with only the US also receiving more than $100bn. China, France and the Netherlands in third to fifth places, each received over $40bn in 2005. The UK position was heavily influenced by the restructuring of Royal Dutch Shell, which created a $74bn inward flow of investment from the Netherlands. However Khalil Hamdani, the director of UNCTAD’s investment division, warned that the numbers of government barriers to cross-border investment had risen to the highest level it had ever recorded. During 2005 there had been a 14 per cent increase in the number of regulatory changes aimed at making a country more hostile to inward investment, and the number was still rising. He said that the shift against open markets had been led by Latin American countries such as Bolivia and Venezuela. The figures did not yet include the pressure from politicians in France, Spain, Italy and the US to block takeovers. US politicians have recently succeeded in blocking Chinese takeovers of Unocal, an oil firm, and Maytag, an appliances firm, and the acquisition of five US ports by a Dubai company on national security grounds. Further information - Click here Financial Times 17.10.06, Independent 17.10.06
Culture of enterprise lessons for schools; a drive to create “a culture of enterprise for young people”, partly through a sharper focus on the subject in schools, has been launched with the backing of senior business leaders, including Sir Martin Sorrell, Ben Verwaayen and Sir James Dyson. ‘Fuelling Enterprise Culture’, which is being chaired by Kevin Steele, chief executive of Enterprise Insight, a Department of Trade and Industry-sponsored body, also has the support of a number of companies including BAE, Tesco and Ebay UK. Their campaign is aimed at securing tougher assessment of enterprise education in schools. This would include national benchmarks for the quality of such teaching and a “reshaping” of the curriculum to accommodate it. The campaign also wants to demystify activities such as venture capital as part of a drive to make business more accessible to the young. The campaign will be formally launched during Enterprise Week starting on 13th November. Further information - Click here Financial Times 11.10.06
Nesta to set up £50m start-up fund; the National Endowment for Science, Technology and the Arts (Nesta) is to set up a £50m fund, targeting “promising early-stage companies that so often fail to attract seed finance”. The Nesta Venture Fund will have £10m a year to invest over five years, not only in start-ups but also in other venture capital and “angel” investment funds. Further information - Click here Financial Times 23.10.06
Trevor Philips warns that veil debate could cause riots; commenting on Jack Straw’s comments on Muslim veils, Trevor Phillips (pictured right), the chairman of the Commission for Racial Equality, warns that the “polarised” nature of the debate could lead to more riots. He believes that the divisions created by the row risk becoming “the trigger for the grim spiral that produced riots in the north of England five years ago”. However, he says that Mr Straw had been right to reveal publicly that he asks Muslim women to remove their veils during constituency surgeries, and that “so-called Muslim leaders who initially attacked Straw were wrong. They were overly defensive and need to accept that in a diverse society we should be free to make polite requests of this kind”. However, speaking on BBC1, Phillips said that the debate had become polarised and “what should have been a proper conversation between all kinds of British people seems to have turned into a trial of one particular community, and that cannot be right”. Muhammad Abdul Bari, secretary-general of the Muslim Council of Britain, agreed that the debate had become “increasingly ugly and shrill” in recent weeks. There was also support from MPs from all the major political parties. Sunday Times 22.10.06, Guardian 23.10.06
Business and investors condemn companies bill changes; there has been widespread reaction to the government’s surprise amendment to the companies bill, which will require companies to publish details of their dealings with suppliers, as well as confidential information on employees and commercially-sensitive details of licensing agreements and joint ventures. The amendment was rushed through at the last minute without any consultation. Leading business organisations are due to meet Margaret Hodge (pictured left), the industry minister, on 30th October “to demand some answers”. Rod Armitage, head of legal affairs at the Confederation of British Industry (CBI) said: “We will be asking Margaret Hodge: where is this coming from? What was so wrong with the bill as it stood, that this over-reaching blunderbuss is needed?” If necessary the business bodies are ready to go over the minister’s head and appeal to Tony Blair, the Prime Minister, and Gordon Brown, the Chancellor, to secure changes. It will be recalled that the original Reform Bill included the provision of Operating and Financial review (OFR), which would have required companies to provide more information on their dealings with society. This was suddenly ditched by the Chancellor as part of what he described as a drive to cut down on regulation, and replaced with the weaker EU provisions. Since then, a number of companies and funds have been working on alternative statements, and there has been a strong campaign from backbenchers supported by the voluntary sector. The Department of Trade and Industry (DTI) said that Margaret Hodge had listened to the arguments about the supply chain amendment. Ms Hodge “firmly believes that this requirement fits naturally with the information on environmental matters, employees, social and community issues and that it is right that it should be included”. Further information - Click here for House of Commons Amendments, and here for Compass Guardian 18.10.06, Financial Times 24.10.06
Company law reforms may be delayed still further; the FT reports that some aspects of the companies bill may not come into effect for at least a year, and could well be delayed until 2008. It says that the granting of the royal assent for the bill (the largest single piece of legislation to date) expected late in October or early November, is only the latest staging post in its eight year development. Some provisions, such as those relating to European laws on transparency and takeovers, will be implemented rapidly to meet Brussels-set deadlines. The bulk of the legislation will however be put on ice, awaiting further consultation and the introduction of a draft of regulations by the Department of Trade and Industry. Financial Times 23.10.06
‘CSR programmes are failing the poor’; a neighbourhood think-tank has claimed that many corporate social responsibility (CSR) programmes are failing to reach the UK’s most deprived areas. The Centre for Local Economic Strategies says that numerous CSR projects are linking firms with local projects through staff volunteering. However it goes on, “CSR policy has largely been separate from the neighbourhood renewal and sustainable communities agenda being pursued by those in the public sector”. Managing the Links: Corporate Social Responsibility and Neighbourhood Renewal is available; price £5, from Centre for Local Economic Strategies Regeneration 20.10.06
Shell Foundation criticised; the Charity Commissioners has, in the words of the Guardian, rapped the Shell Foundation over the knuckles for joining a private meeting organised by Shell UK with Hilary Benn, the secretary of state for international development. The meeting was called to discuss the £11bn Sakhalin scheme in Russia, although Kurt Hoffman, the director of the Shell Foundation, said that he had attended to discuss the Climate Facility for Africa, which is jointly funded by the company and the Foundation, and is one of the outcomes from the Commission for Africa. In a letter to Mr Hoffman, Ken Dibble, the Charity Commission’s director of legal and charity services, says: “It is important for any charity that is wholly or substantially financially supported by a commercial entity, particularly if their activities have commonality, to ensure that its purposes and activities promote the charity’s interests and not the commercial interests of the profit-making entity. In particular the Foundation needs to be acutely aware of the potential criticism that it is, in effect, the corporate social responsibility programme for the Shell Group and part of its public relations strategy”. Guardian 17.10.06
London population to expand by 20 per cent; the Office for National Statistics has released a forecast for the changes in the population of England over the next 25 years. Based on current population trends they forecast that the population of England will increase by 12.7 per cent from 50,093,100 in 2004, to 56,456,600 in 2029. The biggest increase will come in London where they forecast a population growth of almost 20 per cent, and that the population will grow by more than one million to 8.8 million in 2029. Outside London, population growth will be slowest in the North East, where the number of residents will grow by 3.7 per cent to an estimated 2.6m. The fastest growth will be in the South West where there will be a 16.4 per cent increase to almost six million. This is attributed to retired people settling there and others seeking a change of lifestyle. There will also be an ageing population. In 2004, 3.8m people were aged 75 or over, but by 2029, 6.3m will be in that age group. In contrast the number of children under four years of age will grow from 2.8m in 2004 to 3.08m in 2029. Much of the predicted population increase will come from immigration. Figures released by ONS last month showed that the overall population of the United Kingdom passed 60m for the first time in 2005. Two thirds of the 375,000 increase last year was attributed to international migration, while a third was a result of ‘natural change’ - more births and fewer deaths. Further information - Click here Independent 13.10.06
Mayors get Downing Street treat; although the idea of more directly elected mayors is supposed to have been vetoed by the Treasury for inclusion in the forthcoming Local Government White Paper, it looks as though the Prime Minister hasn’t given up yet. He organised a seminar at 10 Downing Street on 19th October with most of the mayors in England present including Ken Livingstone (pictured left). The mayors called for extra powers to be given to them, and it appears as though the white paper will introduce a range of freedoms for councils run by mayors, or other strong leaders, such as council leaders entitled to serve a four-year term. Although the government has rejected imposing the mayoral model on councils, it is still hoping to get there incrementally. The Prime Minister commented after Ken Livingstone had addressed the seminar, that it was “incredibly important” that people could identify who was accountable locally. “People, whether they are for you or against you, they know there is a Mr London out there, and that is incredibly important”. Guardian 20.10.06
More power for ward councillors and parish councils; the Independent predicts that the dispute about elected mayors between Downing Street and the Chancellor’s allies will result in the issue being fudged in the White Paper. The Independent quotes a source that a compromise has been reached, saying; “We’ve always said there should be a balance between strong cities and RDAs” (Regional Development Agencies). According to the Times the proposed reforms will include budgets for ward councillors for local expenses such as street lighting and cleaning. The public will be given the power to ask councillors to review decisions about services or suggest improvements. There will also be public satisfaction indicators for services such as libraries, cleaning and rubbish, which will form part of the mandatory local government inspection reports. The Guardian predicts that parish councils are to be given sweeping powers to deliver instant justice, by imposing fixed-penalty fines of up to £100 and set laws and local bylaws without needing central government permission. Independent 23.10.06, Times 23.10.06, Guardian 24.10.06
Plans to increase Gateway housing; the government is getting ready to endorse the building of an extra 40,000 houses in the Thames Gateway, and will sanction a giant parkland inspired by architect Sir Terry Farrell (pictured right). The plans are contained in a draft Thames Gateway Strategic Framework Interim Report being prepared by the Department for Communities and Local Government for the Thames Gateway Forum meeting in November. Regeneration magazine says that according to sources the report will call for 160,000 houses to be built in the Gateway by 2016, up from the 120,000 figure stipulated in the 2003 Sustainable Communities Plan. Most of the extra houses will be built within the London boundary. Regeneration 20.10.06
Social landlords encouraged to expand community role; the Housing Corporation has put forward proposals for housing associations to play a wider role in the community, such as tackling unemployment and promoting social enterprise. The ideas are outlined in Neighbourhoods and Communities Strategy, which encourages social landlords to capitalise on their role as social businesses by forming greater ties with the communities in which they operate. Further information - Click here Regeneration 20.10.06
New rules for EU migrants irk ministers; the Guardian says that ministers were complaining up to the last minute about the controversial plans for restricting Bulgarian and Romanian access to the British labour market, put forward by John Reid, the home secretary. Bulgaria and Romania are due to join the EU on 1st January 2007, and under EU rules Britain has the right to restrict their citizens’ access to the British labour market for between two and five years. In 2004, along with Sweden and Ireland, Britain gave unfettered access to the first wave of eight central and eastern European countries joining the EU. Independent forecasts had predicted that as few as 15,000 migrants from the eight countries would come to the UK, but in reality the true figure has been nearer 600,000. The Foreign Office has been calling for a similar policy, arguing that the current migrants are responsible for between 10 and 15 per cent of UK growth and that the new countries entering the EU are more likely to prefer Germany and Spain. However Joan Ryan, a Home Office minister, has said that the restrictions announced last week follow a policy of managed migration, and that “we have sought to attract the migrants that will most benefit the UK”. She has also promised support for local authorities put under pressure if migrants strain services, although the Downing Street strategy unit has been unable to find any evidence that this is happening. Guardian 21.10.06, Financial Times 24.10.06
MPs reveal £101m cost of two city academies; as predicted the Public Accounts Committee’s report on improving schools says that one million children are in schools which perform badly, and is critical of the light touch regulation by Ofsted, the education standards regulator. However, it is the Committee’s findings on the cost of city academies that excites the Guardian. Two city academies, which have both been singled out by the National Audit Office as poorly performing schools, have cost the taxpayer £101m to run - one of them costing nearly three times the government estimate. The costs of the Bexley Business Academy and the Unity City Academy, Middlesbrough, are respectively £58.2m and £43.6m. Forty six academies have opened, and by next September there should be 80 with a further 100 or so in the pipeline. The government wants to open 200 by 2010. A report this summer claimed that many were suffering from poor discipline, bullying and badly designed buildings. A spokesman for the Department for Education and Skills said: “The funding for both Bexley and Unity Academies is within normal funding parameters”. Further information - Click here Guardian 17.10.06
Ruskin College head warns of education focus on jobs; Professor Audrey Mullender, principal of Ruskin College, Oxford (pictured left), has warned that the government risks causing irrevocable damage to education for the most disadvantaged adults, by concentrating on basic skills for work rather than wider learning. Speaking in advance of a Ruskin College debate to mark the 30th anniversary of James Callaghan’s speech on the role and purpose of education, she accused New Labour of pushing a dangerously narrow employer-driven agenda, which, in turn is producing a wholesale undermining of the funding for liberal adult education. Independent 18.10.06
Black pupils close GCSE grade gap; black schoolchildren have started to close the gap on white classmates by doing better than ever in tests for 14-year-olds and GCSE exams. An evaluation of the Aiming High programme shows that the percentage of black Caribbean boys achieving at least Grade 5 in tests for 14-year-olds had gone up by 13 per cent in maths, 12 per cent in english and 3.5 per cent in science. Similarly the percentage of boys of black Caribbean origin getting five passes at GCSE in Grades A to C went up by 5.4 per cent between 2003 and 2005, with their female peers improving by 6.9 per cent. Three quarters of the 700 pupils aged 11-16 at the Phoenix High School on the White City estate in Hammersmith are non-white. In 2002 just 25 per cent of students got five passes at Grades A to C at GCSE, but this year the figure was 77 per cent - way above the national average of 55 per cent. Further information - Click here Observer 22.10.06
University entrants drop by 15,000; provisional figures released by the Universities and Colleges Clearing Service show that the number of students starting university this month has dropped by 15,000 compared to 2005. Opposition MPs and student leaders were quick to blame the new tuition fees, which started this year. However ministers claimed that the 15,000 drop to 389,505 represented a strong performance because of the one-off increase in 2005, when students were enrolling before the fees came into place. Bill Rammell, the higher education minister, said, “We are still significantly above the numbers we saw in 2004”. Experts from Leeds University said that it was middle-class students who had been most affected by the introduction of fees, with as many as 100,000 put off by the prospect of leaving college with debts of £20,000 or more. It is thought that “disadvantaged” students are benefiting from the provision of special grants, and also what Leeds terms “social engineering” where universities are lowering their entry requirements by at least two grades. Further information - Click here and here for Provisional figures for 2006 entry Guardian 19.10.06, Evening Standard 19.10.06
Deprived should be given special treatment; a government commissioned report from Leeds University says that universities should drop their entry requirements by up to two A level grades for students from “disadvantaged backgrounds”. The Leeds academics found that although most universities have a scheme to encourage applications from those with working-class backgrounds, systems varied and only a few hundred students were recruited annually by this route. Opportunity and Equity: Developing a Framework for Good Practice in Compact Schemes - Click here Times 23.10.06
London teachers study New York ways; a party of 40 teachers from London schools have been touring New York as part of a programme to learn how to run “challenging inner-city” schools. The programme has been organised by Future Leaders, which aims to address the looming shortage of head teachers by training hundreds who will be fast-tracked over four years to some of Britain’s toughest schools. One of the schools they visited was the KIPP Academy in the Bronx. For mathematics it is now rated in the top ten per cent in New York City, and four out of five students go on to university. KIPP stands for ‘Knowledge is Power Programme’ and is a not-for-profit foundation based in San Francisco that now runs 50 charter schools across the US. Its backers include Goldman Sachs and the Gates Foundation. The Times reports differing views amongst the London group with one teacher suggesting that London’s problems were more deep-rooted than the Bronx because American kids are so aspirational. On the other hand Jay Altman, from the Absolute Return for Kids charity, which is funded by leaders in the hedge-fund industry, says that Britain has a better chance because there is already a broad social and ethnic mix in many urban residential areas. Further information - Click here Times 23.10.06
Scrap fees for science subjects, says CBI; a Confederation of British Industry (CBI) report calls for university tuition fees for science subjects to be scrapped to help solve the growing crisis in information technology recruitment. A report, compiled with LogicaCMG, Building a Globally Competitive IT Services Industry, says that a dearth of quality graduates in science, technology, engineering and mathematics (Stem) is forcing companies in the IT sector to hire more foreign workers in a bid to stay competitive with emerging rivals in India and other low-cost countries. The report recommends that the government should encourage more quality graduates in the stem subjects by cutting or eliminating tuition fees, and giving incentives to teachers to teach these subjects. Further information - Click here Financial Times 19.10.06
Britons are the worst energy savers in Europe; a survey of 5,000 people across Europe shows that Britons are the worst energy savers with 71 per cent leaving electrical devices on standby. The survey, which was conducted by the Energy Saving Trust, also shows that UK citizens admitted to 32 energy-wasting actions a week. Two-thirds of Britons admitted to leaving phone chargers plugged in but not attached, while nearly the same proportion regularly forgot to turn lights off. Unless energy habits change, the report predicts that by 2010 we will have wasted £11bn and emitted 43m tonnes of carbon dioxide unnecessarily, equivalent to emissions from 7m homes. Another survey by Friends of the Earth says that carbon dioxide emissions are now at their highest level since Labour came to power. Emissions of the climate-warming gas in the first six months of the year were 2.1 per cent higher than in 2005, partly because of increased use of energy as a whole, and partly because of increased use of coal burning due to higher gas prices. Further information - Click here for Energy Saving Trust and here for Friends of the Earth Guardian 23.10.06
Green laws bound to hit property industry; environment regulation affecting the property industry is inevitable, regardless of which party wins power at the next election. Delegates at an Estates Gazette Climate Change Summit were warned that whilst they wanted self-regulation each of the main political parties would enforce standards through primary legislation. Sir Nicholas Stern (pictured left) is due to publish his Treasury-commissioned review on the economics of climate change next month, which is expected to be used as the basis for a series of environmental regulations. One of the consequences will be rising costs of house building. At the conference Yvette Cooper, the housing minister, urged that British houses should be built to “Scandinavian standards or better” within ten years. Research undertaken by Savills estimates that increasing environmental standards, coupled with widespread scarcity of labour caused by the high number of development projects scheduled for the next few years, will push up build costs by five per cent. At the same time property values are scheduled to rise by an annual average of only 4.5 per cent, which will mean that developers will have to go beyond stock products and seriously think how they can add value and create a premium product to restore profit margins. Estates Gazette 21.10.06
Stores urges to cut free bags by 25 per cent; environment ministers have met executives of the major supermarket chains to urge them to cut the number of plastic bags given away by 25 per cent over the next 12 months. There will be further meetings to decide how to meet the targets. More than eight billion bags are given out each year in the UK, which accounts for half of all that are imported into Europe. Bags are taxed in Ireland and Denmark and could be banned in France. Other countries charge for them. Financial Times 13.10.06
Mayor puts squeeze on developers; Ken Livingstone is threatening to block consent for major London schemes unless developers pay large increases in planning gain under section 106 agreements. He has forced the German developer Difa to pay an extra £1m in planning gain for the 945ft-high Helter-Skelter tower in Bishopsgate (pictured left). Livingstone threatened to refuse planning permission unless Difa agreed to double their contribution to local transport improvements, including congestion relief at Bank station. Landowners expressed concern about the Mayor’s threats, especially in the light of the increased planning powers that he will be gaining shortly. Sir Simon Milton, leader of Westminster, also expressed alarm but agreed to work in tandem with the mayor in using compulsory purchase powers in the eastern end of Oxford Street in a bid to bring forward a redevelopment of the area. Estates Gazette 14.10.06
Thameslink gets planning go-ahead but no money yet; the extensions to Thameslink, the North-South rail link through the City, has received planning permission from the Department of Transport, and the Department for Communities and Local Government. Previously known as Thameslink 2000, the £3.5bn scheme will allow services from Cambridgeshire to continue south through London using a new spur from King’s Cross, a realignment of the tracks leading into London Bridge station, and the rebuilding of the station itself, and a tripling of the capacity on the core section of the route between King’s Cross and London Bridge to take 24 trains an hour. The scheme had been held up since 2002 by concerns over the potential impact on areas such as Borough market. The new scheme will involve far less demolition than originally proposed. Network Rail believes that the northern part of the scheme can by completed by 2012 if funding is received before next summer. Further information - Click here Financial Times 19.10.06
Wembley stadium saga may be over; the Observer says that after eight years of delays, rising costs and legal wrangles, the new Wembley Stadium will be completed in the next few months and will be ready for the 2007 Cup Final on 19th May. The development is a major surprise as Multiplex, the Australian construction company which has spent the last four years rebuilding the home of football, recently warned that the ground might not be ready until 2010. Together with the Football Association (FA) it had been preparing for a long and bitter High Court battle over hundreds of millions of pounds in disputed costs. However last-ditch negotiations have produced a compromise. The FA has agreed to pay Multiplex an additional sum of £70m, on top of the original fixed price of £458m, for erecting the totally revamped 90,000-seat stadium. That will push the overall price up to £827m. However the FA will get back £35m from Multiplex as late penalty compensation. Two trial events have to be held before Brent Council can issue a safety certificate. Observer 15.10.06
Woolwich revamp under threat; the government’s decision to scrap the proposed Crossrail station at Woolwich has threatened the regeneration of Woolwich town centre, and could cause adverse effects on Canary Wharf and Thames Gateway according to Chris Roberts, the Greenwich Council leader. The government announced its decision at the House of Commons Select Committee looking into Crossrail, which had previously voted to support the recommendation that the station should be built in Woolwich. The government said that the £270m cost was “unjustified”. They did, however, agree to pay compensation to traders in Smithfield because the “exceptional and historical nature” of their business justified compensation from the effects of the Crossrail works. Estates Gazette 14.10.06
Early commuters could be offered discount; Passenger Focus, the rail passenger watchdog, has proposed that rail commuters who catch early trains before the commuter rush should be offered partial refunds. At present more than 50,000 people each day are standing on trains arriving in London between 8:00 and 9:00 whilst there are plenty of spare seats before 8:00. They acknowledge that previous incentive schemes were not flexible enough and that there will need to be investment in stations to persuade commuters that it is safe to travel at that time. Further information - Click here Times 21.10.06
Airport security checks cause concern; business lobby groups are expressing fears that tough security checks at UK airports, especially Heathrow, could deter foreign visitors. Although the toughest restrictions imposed in the wake of the August terror alert have been eased, stringent hand luggage checks continue to complicate travel through Heathrow. The regime, imposed by the Department of Transport, is one of the toughest in Europe. Business and airport industry leaders point out that it is easier and quicker to travel through other European airports. However, BAA has subsequently indicated that they are planning a major overhaul of the security checking areas that became clogged with passengers in the aftermath of the terror scare. This will mean more and bigger security lanes, as well as extra scanning equipment and metal detector arches. However the main change will be, after an internal inquiry into the Heathrow operation, the recruitment of hundreds more staff to the 4,000-strong Heathrow payroll. Guardian 23.10.06
Hackney named as worst place to live in the UK; the latest issue of Channel 4’s The Best and the Worst Places to Live in the UK: 2006 names Hackney as the worst place, with Tower Hamlets, Merthyr Tydfil, Newham and Islington close on its heels. A co-presenter of the programme, to be shown on 26th October, Phil Spencer, said, “Hackney came bottom of all the country’s 434 local authorities in a survey that examined local crime statistics with environment issues, lifestyles, exam results and employment rates for locals”. Hackney, which was voted fourth worst place in the 2005 results, has been making changes to improve areas such as transport and the environment, and will, of course, benefit from the 2012 Olympics. Further information - Click here Observer 22.10.06
The City as a retail centre; the Estates Gazette looks at the growing number of retail schemes in the Square Mile and wonders if they are enough to make the City a shopping destination. Extra space is mainly coming through larger office developments such as Legal & General’s redevelopment of Bucklersbury House, which will feature 100,000 sq ft of shops and restaurants, whilst two smaller developments at Bow Bells House and 150 Cheapside will produce 25,000 sq ft each. However the development that will have the greatest impact will be Land Securities’ and Beacon Capital partners’ 220,000 sq ft at the former Bank of England site at One New Change. David Sanderson, partner at CWM, says, “One New Change will be offering shops of around 20,000 sq ft- which you hardly ever see in the City”. He also hopes that the centre will be a catalyst for seven-day trading. The Mercers Company, who own the Royal Exchange shopping centre, are also hoping for six or seven day trading. However other experts point to the need to improve the retail mix with less dependence on mobile phone, card and coffee shops and more fashion. The City of London Corporation has commissioned CB Richard Ellis to carry out a study into its future retail strategy. It will assess both the strength of the market, and suggest ways of improving its appeal to retailers and shoppers alike. Estates Gazette 21.10.06
The City gets ready for expansion; although there is an emerging debate about potential oversupply of offices in the Square Mile, the City of London Corporation is looking further into the future. To safeguard future growth last year it commissioned CB Richard Ellis (CBRE) to study areas around the City that could accommodate this growth. The research identified 43 sites that could accommodate developments of more than 50,000 sq ft and had a total potential of 9m sq ft. More than half the sites lie adjacent to, or close to, the City border. The three main clusters of sites were identified as the area south of Shoreditch, between City Road, Finsbury Square and Broadgate; the area to the north-east of Liverpool Street and Spitalfields; and south-east around Aldgate Circus to Tower Hill. The City itself has acquired property in the area to the north of Spitalfields and various schemes have already been announced including British Land’s 201 Bishopsgate and the plans to extend Broadgate, Hammerson’s 1.5m sq ft Northgate development, and the City’s own scheme for 250,000 sq ft. At present not much is happening in the South East corner. However a cluster not mentioned in the CBRE report is making progress to the West of the City in the area sometimes called Midtown. Land Securities has built 700,000 sq ft in four buildings in New Street Square off Fleet Street, whilst the British Steel Pension Fund is refurbishing 15 Fetter Land, and Delancey is redeveloping Rolls Buildings, also on Fetter Lane. Estates Gazette 21.10.06
Olympic stadium could be flexible size; Britain’s Olympic Stadium may be a concertina-shaped arena designed to shrink or grow as it as adapted to different uses after 2012. That is the view of HOK, the Anglo-American firm of architects that has been chosen to design the London stadium, having designed the Sydney stadium for the 2000 Games and, more recently, the Emirates Stadium in London, the new home of Arsenal Football Club. The contractors will be Sir Robert McAlpine, who also built the Emirates Stadium. Rod Sheard, the architect in charge of the stadium project at HOK, said: “It should be possible to turn an arena that was an Olympic Stadium for 80,000 spectators one year, into an arena for 20,000 the next year, and a Commonwealth Games arena for 40,000 the year after”. HOK is now discussing the final design with the Olympic Delivery Authority (ODA) and the full plans will be unveiled early next year. Construction will start in 2008. Further information - Click here Sunday Times 15.10.06
2012 anti-poverty schemes launched; two initiatives aimed at utilising the London Olympics to reduce the levels of worklessness and child poverty in the capital have been launched by the London mayor Ken Livingstone and the Chancellor Gordon Brown. An “employer accord” under which businesses, particularly in the construction, hotel and leisure sectors, will pledge entry-level jobs in return for a public commitment from the public sector to provide a supply of suitable candidates. The Pre-volunteering Programme aims to encourage workless and socially-excluded people to complete training so that they can be guaranteed an interview as a London 2012 volunteer. Further information - Click here Financial Times 18.10.06, Regeneration 20.10.06
Elephant loses another bidder; Mallory Clifford, a long-running supporter of the Elephant & Castle regeneration has pulled his consortium out of the bidding for the £1.5bn scheme, leaving only two of the original seven bidders in the frame. The Estates Gazette (EG) quotes industry sources as saying that Southwark’s aspirations had changed too much since the tender process started in 2004. Mallory Clifford was leading the Oceancrest consortium comprising his Blackfriars Investments, Chelsfield Partners, the Lefrak Organisation, Glebe Holdings and Royal London Asset Management. The remaining two bidders, both of whom have existing land holdings in the 170-acre site are a Lend Lease-led team and St Modwen with Salhia Real Estate. It is thought that where as the final master-plan prepared by Ken Shuttleworth of MAKE aims to create a sustainable “non-car parking destination” with 5,200 homes and 800,000 sq ft of mostly neighbourhood retail, Oceancrest wanted a major shopping centre. They were also concerned that two planning consents had been given to Multiplex and Oakmayne for large mixed-use projects within the overall project area. The EG quotes a source as saying, “Oceancrest felt the Council had, over time, shifted to wanting a safer, piecemeal scheme rather than a wholesale redevelopment. It wants a project manager rather than a development partner”. Estates Gazette 21.10.06
Plans to expand Broadgate; British Land (BL) has announced plans to add 1.2m sq ft to its 4m sq ft Broadgate Estate in the City of London. Five of the 16 blocks on the 30-acre estate at the back of Liverpool Street station could be replaced by buildings of more than double the height, with most remaining offices extended. BL, which is expected to benefit from the plans to redraw the corridors that protect the views of St Paul’s Cathedral, has two other large schemes nearby that await the decision to proceed. These are the so-called Toast Rack - a 600,000sq ft tower in Leadenhall Street - and a 548,000 sq ft office scheme in Ropemaker Place. Estates Gazette 14.10.06
Further expansion of Regent’s Place; British Land (BL) is also planning to expand Regent’s Place, north of the Euston Road underpass. It already boasts an 18-storey, 340,000 sq ft office tower and a 25-storey residential tower. BL has now bought the Crown Estate, its joint venture partner, out of Osnaburgh Street, at the western end of the site, where it will start developing 380,000 sq ft of offices and a 100,000 sq ft of homes in January. Estates Gazette 14.10.06
Late bid to save Fortress House; a last-minute bid was placed to save Fortress House, the 1950s building in Savile Row that was formerly the headquarters of English heritage. However, despite opposition from preservation groups, Legal & General, the new owners, won planning consent to demolish the building in favour of a new office block. Anton Bilton, a well-known property developer had put in an initial bid of £75m with the aim of keeping the building as an upmarket hotel. Legal & General have subsequently sought matching or higher bids from other developers but Mr Bilton has now bid £85m. He is in partnership with André Balazs, a leading American hotelier, and they plan to restore Fortress House to its original designs, and to take advantage of its generous carriageway and the two roof terraces. Times 23.10.06
Hammerson prepares to link City with Shoreditch; Hammerson has hired Shoreditch-based Avanti Architects to prepare a 100,000 sq ft office scheme for the Nicholls & Clarke site in Shoreditch High Street. A planning application will be submitted to Tower Hamlets before Christmas. It is the first phase in the joint venture that Hammerson formed with the City of London Corporation two years ago to create an office corridor up to Bishopsgate Goodsyard. Hammerson are still negotiating about the northern end of the site where residential developer Grainger Trust is a significant stakeholder. Estates Gazette 21.10.06
Rothschild plans new City HQ; NM Rothschild is to seek planning permission for a 15-story tower to replace its current head office in St Swithin’s Lane in the heart of the City. The company, which has been on the same site for nearly 200 years, has retained the Dutch architect Rem Koolhaas with Stanhope as the developer. The new building is planned to open in 2009 to coincide with the firm’s 200th anniversary. Financial Times 13.10.06
Former Whitbread HQ to become hotel; the former Whitbread Brewery in Chiswell Street is to be converted into a 200-room luxury hotel. The £55m redevelopment is being carried out by Guestinvest, the buy-to-let hotel operator. Rooms, in what will be called the Chiswell Street Hotel, have already gone on sale. Brewing stopped in 1976 and the Whitbread head office moved in 2001. Part of the building is a conference centre. Further information - Click here Independent 16.10.06
Plans to take Covent Garden upmarket; Capital & Counties, the new owners of Covent Garden Market, has announced it is seeking new advisers to help turn the ‘tourist trap’ into a world-renowned shopping destination. Estates Gazette 14.10.06
King’s Cross hits a potential snag; a consortium of local activists has won the first round in their legal challenge to Argent’s £2bn King’s Cross Central development. The group said that solicitors acting for Camden Council said that councillors had got the required proportion of social housing in the scheme wrong which “could have affected the decision to grant provisional consent”. The campaigners are threatening a legal challenge if the plans are not revised to include 50 per cent rather than 40 per cent affordable housing. Estates Gazette 21.10.06
Dickens & Jones building gets go-ahead; Westminster City Council has approved plans for the redevelopment of the old Dickens & Jones building at the Oxford Circus end of Regent Street. A glass extension with terraces overlooking the West End is to be constructed on the top of the building with room for an 18,000 sq ft restaurant. The ground, basement and first floor will be retail and the middle three floors will be offices. H&M and Nokia have already signed up to have flagship stores. Westminster Council said that the redevelopment was part of a master-plan to revitalise Regent Street and Oxford Street shopping areas. Times 21.10.06
Russian tycoon buys former Midland Head Office; Victor Chernukhin, a former Russian Deputy Finance Minister, has paid £72m to acquire the Grade 1-listed former head office of the Midland Bank at Poultry in the heart of the City. The property, which was built in the 1920s and designed by Sir Edwin Lutyens (pictured right), occupies an acre site almost next to the Bank of England and opposite the Mansion House. In 2005 HSBC agreed to lease back the banking hall until 2008 but otherwise the building is empty. It is thought that Mr Chernukhin has purchased the property with a view to redevelopment possibly as a luxury hotel. Other possibilities include serviced apartments, leisure, retail or offices. Times 17.10.06
Camden Market redevelopment gets the go-ahead; Camden Council has given the go-ahead for a £12m redevelopment of the Camden Stables Market. The scheme involves the building of two four-storey blocks, which will house a mixture of shops, offices, restaurants, workshops and other units. The arches to the rear of the site will also be opened up and used for stalls. However to make way for the scheme the front section of the railway arches and the temporary buildings will have to be removed. There had been a previously approved scheme for two new blocks but that did not involve opening up the arches at the back of the site. Hampstead and Highgate Express 13.10.06
grapevine is produced twice monthly (except in August and December when there
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Next issue on October 26, 2006
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