ECONOMY
Budget will be on 21st March; the Treasury has revealed that what will probably be Gordon Brown’s (pictured right) eleventh and final Budget will be unveiled on 21st March. The chancellor will use the budget and the comprehensive spending review in July to flesh out his vision for the future - even though the state of public finances means that growth in public spending will have to reined in. The Institute for Fiscal Studies has already predicted that it will be the “tightest squeeze on spending” since the freeze that Brown inherited from Ken Clarke in 1997. The chancellor has already announced that spending growth will grow by two per cent a year from 2008-9 but since then the Treasury has been seeking ways of cutting the cost of government to release resources for priority areas. The chancellor is expected to place the emphasis firmly on education and skills. He has also placed on record his desire to raise overseas aid to 0.7 per cent of national income over the coming years. At present it is 0.47 per cent according to OECD. Guardian 23.02.07
Economy shows fastest growth since 2004; figures for the last quarter of 2006 show that a surge in consumer spending and business investment saw the economy expand at its fastest rate in more than two years. The growth rate in consumers’ spending more than doubled to one per cent compared to 0.4 per cent in the third quarter. Coupled with the rise in investment, which rose 2.5 per cent quarter on quarter, growth rose to 0.8 per cent - the fifth quarter in a row of growth close to the long-term trend rate, and also lifted the annual rate of expansion to a boom-like three per cent. Detailed breakdowns emphasise the role of the services sector with manufacturing stagnating. The growth in services for the year was 9.4 per cent. Other sectors that did well in the fourth quarter included real estate (up 1.6 per cent), transport, and telecoms, which grew by 1.1 per cent. However, trade was a drag on growth. Net trade trimmed 0.2 per cent off growth as a strong pound hindered producers. There was also comfort on inflation with the GDP-based gauge of prices showing a rise of 2.4 per cent compared to three per cent in the third quarter. Jonathan Loynes (pictured left) of Capital Economics said “demand pressures in the economy remain very strong”. However he pointed to January’s sharp drop in retail sales. Geoffrey Dicks at Royal Bank of Scotland wondered if the fourth quarter figures were “the consumer’s last hurrah, or whether 2007 will see more of the same”. Further information - Click here Financial Times 24.02.07, Times 24.02.07
Mortgage loans hit new record in January; mortgage lending hit an all-time January high last month, indicating that despite higher interest rates the long-running housing boom remains intact. The Council for Mortgage Lenders said that lenders had advanced £28.6bn in new home loans during the month, six per cent down on December but still a January record. The high level of approvals indicates more strength to come in the housing market, despite some surveys showing signs of housing inflation peaking. Andrew Gal, business economist at the Building Societies Association said, “indications of a slowing market are not coming through in building society mortgage figures yet. We may see robust mortgage figures in the near future, but expect these to fall back as the impact of recent rate rises feeds through”. Further information - Click here Independent 21.02.07
Bank chief economist warns on inflation; Charles Bean (pictured right), the chief economist at the Bank of England and a member of the Monetary Policy Committee (MPC), has warned that despite the likelihood of inflation falling back sharply this year the bank “cannot afford to relax about inflationary pressures”. In a speech in Huddersfield he said that inflation could dip below two per cent this year, thanks to falling oil and energy prices. But he warned, “just as the sharp upward movement in inflation over the past year may have exaggerated the pick-up in underlying inflation, so the prospective fall-back is likely to overstate the extent to which inflationary pressures have abated”. The publication of the minutes of the MPC’s February meeting show that Bean was amongst the seven members of the MPC who voted to maintain interest rates at 5.25 per cent at the February meeting with two voting against. The minutes say that the majority felt it was a good idea to wait and see the effects on demand of recent rate rises before taking action. The two dissenting members, Professor Tim Besley and Andrew Sentence, called for a further 0.25 per cent rise arguing: “the degree of policy tightening since August was still modest relative to the rise in inflation”. Following the publication of the minutes the City lengthened the odds on further interest rate rises although it expects another 0.25 per cent rise in the spring. Further information - Click here and here for publications Financial Times 22.02.07
Business ‘blunted’ by red tape; the burden of red tape on British business rose to £55.6bn last year according to the British Chambers of Commerce. They say that while government continues to allow a net increase in regulation annually, business will feel their competitive edge “blunted on the world stage”. Further information – Click here Independent 26.02.07
Waterstone backs entrepreneurs club; Tim Waterstone (pictured right), founder of the bookshop chain and also Tom and Daisy, is backing a new lunchtime networking group for established small businesses at Adam Street, London’s private members club for entrepreneurs. Modelled on the highly successful Entrepreneurial Exchange in Scotland the new group held its first meeting on 27th February. Annual membership is £149. Further information - Click here Financial Times 24.02.07
UK tops European venture capital; the UK led the rest of Europe in venture capital investment by a wide margin in 2006 according to research data group Library House. Fast-growing businesses, many of them in high-tech fields, sold 515 minority stakes worth 1,784bn euros. France came second with 195 deals worth 875m euros; Spain was third with 67 transactions worth 491m euros. Doug Richard of Library House said that the news reflected a better-developed culture of equity funding in the UK, which contrasted with a continental penchant for debt funding. Other factors were the UK’s strong science base, London’s status as a financial centre and the success of Aim in providing exits. However UK venture capital declined slightly in 2006, with the total falling to about £100m. Jens Lapinski (pictured left) of Library House said, “the market has constricted a little and that reflects the fund-raising cycle. A lot of funds had raised money in 2004-5, and big deals [in 2005-6] skewed things too”. However venture investment had returned to healthy levels after the hiatus triggered by the collapse of tech stocks. “The environment right now has never been so good for early-stage companies. We have never seen so many deals for companies with no revenue”. Further information - Click here Financial Times 15.02.07
Cardboard tents demonstrate green entrepreneurship; a 23-year old recent graduate has received around £500,000 in backing from finance group Mint to produce eco-friendly tents made of cardboard that can be re-cycled at the end of music festivals and big events. Mint has taken a 30 per cent stake in the business. James Dunlop conceived the idea in his final year at the University of Western England and subsequently won an award at the annual New Designers Exhibition after he graduated in 2006. The cardboard dwellings, which are called Myhab, will cost £60-£100 and can be ordered online and put up at sites by the Myhab team before festival-goers arrive. The team will also remove them. Further information - Click here Independent 26.02.07
Council estates are the real villain of teenage murders; Will Hutton says that Britain has one of the biggest concentrations of council housing estates in the world, rivalling even the former Soviet Union and China in the sheer scale of dismal concrete sheds in which we collectively house the poor. Following the spate of teenage murders in south London, and the Unicef report which ranked Britain at the bottom in a world league table of children’s well-being, there has been an all too typical debate about the social condition of Britain. David Cameron blames the collapse of the family; whilst for the left, it is a sign that we should spend even more on building and policing so-called ‘communities’. However Hutton says that the real villain is the estate. Built with the best of intentions and once the home of the upwardly mobile working class, the estates have become dense concentrations of poverty, crime and disaffection - a symbol of failure for everyone, but especially for those who live in them. He cites Estates by Lynsey Hanley in which she says that it is not just bricks-and-mortar that divides the council-house dweller from the rest of the community. “If you attend a school on a council estate, having come from a housing estate, you get a council estate education. It’s not so much that you get told kids like you can’t ever hope to achieve their full potential: it’s just that the idea of having lots of potential to fulfil isn’t presented…inculcated into every child at a council estate school is the idea that you shouldn’t hope for too much”. Everyone can accept what needs to be done but that means council estates being less cut off from the rest of the economy and society. Observer 18.02.07
Plan to break up council estates; a plan to create a greater mix between public and private housing has been laid out in a report on the future of council housing commissioned by the Department of Communities and Local Government. The report, which was written by John Hills (pictured right) of the London School of Economics, calls for ghetto-like council estates to be broken up by building new homes for first-time buyers in amongst the council properties, whilst at the same time moving low-income tenants to predominantly private owned streets. Hills called for an end of the idea that towns should be planned with “rich people on one side of the tracks and poorer people on the other side of the tracks”. He said the separation of council tenants from home owners had never been government policy, but a gradual drift within the population, meant that almost half of all social housing was concentrated in the poorest 20 neighbourhoods. He warned that one-fifth of all council tenants do not feel safe in their own homes. He rejected the idea that council tenants who could afford their own homes, or elderly tenants living alone in large properties, should be forced to move to ease the housing shortage. Further information - Click here Independent 21.02.07
Minorities ‘more British’ than whites; ethnic minorities are more likely to think of themselves as British than white people according to a survey commissioned for the Institute for Public Policy Research. White people are increasingly identifying with England, Scotland, Wales and Northern Ireland, says the report Who are we? Identities in Britain 2007. Further information - Click here Independent 19.02.07
Chinese urged to raise their profile in UK; the advent of the Chinese year of the pig on 18th February was used by Christine Lee, lawyer and community activist, to call for the political profile of Britain’s Chinese people to be raised. She said, “the Chinese must stop being the silent community. We’ve been here for three generations and are the UK’s third biggest immigrant group, but we have no representation in parliament, and no established voice. We need to take action and stand up for ourselves”. Since the death of Lord Chan last year, Lee, who leads the largest Chinese law firm in the country, has been the Anglo-Chinese community’s most prominent representative. According to the 2003 Census there were more than 560,000 people of Chinese descent living in the UK - an almost 12 per cent rise over 2001. The estimate does not include recent immigration or for the large number of illegal Chinese immigrants, who are thought to total 70,000 to 100,000 people. Financial Times 17.02.07
SOCIAL RESPONSIBILITY
General Electric challenged on effects of green policies on its earnings; a US hedge fund called the Free Enterprise Action Fund has challenged General Electric (GE) to drop its green policies because they unlawfully compromise shareholders’ rights to value. GE has promoted its green policies under the slogan of “ecomagination” and it has made a stand for regulation of global-warming in the face of the staunch commitment to greenhouse gases by most of corporate America. The Free Enterprise Fund quotes the example of California where legislators have called for the abolition of old-style light bulbs - the invention of GE’s founder Thomas Edison. GE has tried to wrest control of the situation by striking out the proposal but activists have won the support of the Securities and Exchange Commission. Sunday Times 18.02.07
Private banks assist the new philanthropy; inspired by the high-profile philanthropic gestures of people such as Warren Buffett in the US, a new generation of wealthy Britons is channelling its money into good causes. To help them in this cause, a number of Britain’s private banks have set up philanthropy divisions to provide advice. The first was Coutts, part of the Royal Bank of Scotland, which set up a bespoke philanthropy service, 18 months ago. It has been followed by Barclays Wealth and HSBC Private Bank. Mark McCombe, chief executive of the HSBC Private Bank, attributes the burgeoning interest in philanthropy to the boom in new wealth in Britain over the past decade from an entrepreneurial class that has moved from being asset-rich to cash-rich. Twenty years ago three quarters of the constituents of the Sunday Times rich list had inherited their wealth. Today self-made millionaires account for that proportion. Times 17.02.07
Fairtrade seeks £50m for expansion; the Fairtrade Foundation is seeking up to £50m from governments in the UK and abroad to help to finance development projects overseas over the next five years. Fairtrade wants a long-term investment plan to help it to expand into new markets, such as cosmetics. They hope to repeat the success of Fairtrade cotton, which was launched in November 2005 and will underpin major clothing ranges at Marks & Spencer, Top Shop, Monsoon and Sainsbury’s this year. Harriet Lamb (pictured right), director of the Fairtrade Foundation said: “Britain leads the way in fair trade. We have the biggest market and we can be a global centre of excellence. The Department for International Development (Dfid) and Fairtrade have similar objectives and we can take those forward if they give us financial support”. On 27th February Lamb is joining Roosevelt Skerrit, prime minister of Dominica, Mike Barry of M&S and representatives from Starbucks in giving evidence at the first meeting of the international development select committee inquiry into fair trade. The committee will examine how effective fair trade is in reducing poverty and how donors can support fair trade. Their evidence will help to inform Dfid on whether to provide Fairtrade with their biggest slug of government funding so far. A decision will be made later this year. Times 24.02.07
Clothing becomes the new Fairtrade battleground; Fairtrade clothing has become the new eco battleground for Britain’s top retailers as demand for ethically certified cotton has doubled in six months. The brand, which pays the farmers more, is now struggling to keep pace with requests from high-street shops such as Marks & Spencer, Next, J.Sainsbury and Debenhams. The number of cotton producers that have been awarded the Fairtrade mark in the last year has been increased by a third to 100 but demand is still likely to outstrip supply. M&S alone will need a third of the world’s current supply to meet its pledge to be the UK’s biggest seller. The amount of Fairtrade cotton sold in the UK rocketed last year, far outstripping more established products such as bananas, coffee and chocolate. The number of licensees, who pay the Fairtrade Foundation for use of their logo, has gone up from seven to 30. This year’s Fairtrade Fortnight runs from 26th February – 11th March. Further information - Click here Independent 26.02.07
London subsidises the rest of the UK by £13bn a year; new research documents show London’s vital role in the UK economy. Oxford Economics calculate that the London and south east economies produce a budget surplus larger than almost any country in the world. They calculate that on average Londoners pay £1,700 more to the Treasury than they receive in public expenditure, while people in Northern Ireland, Wales and the north east get over £2,500 more on average than they contribute. The total subsidy that London paid to the rest of the country in 2004-5 was £13.1bn - a bigger surplus than that of Singapore. The Office for National Statistics published a review of regional performance, which shows that London produces 53 per cent more goods and services than the UK average, because productivity levels are much higher than in other regions. Alan Wilson, director of consulting at Oxford Economics, said: “Although the cross-subsidisation of Scotland, Wales and Northern Ireland by the rest of the UK has been widely reported, what these figures reveal is that even within England there are definite winners and losers in terms of demand on the public purse. Whilst regional policy must continue to support those areas of the UK that have suffered economically from the disappearance of manufacturing jobs, it is also vital that government doesn’t kill the goose that lays the golden eggs by hampering the property of those regions that generate financial surpluses”. Colin Stanbridge, the chief executive of the London Chamber of Commerce, said that the research confirmed what was already well known - that London is short-changed by the exchequer. He spotlighted overcrowded trains, the disparities between skilled and unskilled workers and the fact that some of the most deprived neighbourhoods in the country are in London. He went on, “without renewed investment in skills and transport - most notably the urgently needed Crossrail project - London’s role as the engine of the UK economy will come under threat”. Further information - Click here for Oxford Economics and here for statistics.gov Financial Times 17.01.07, Independent 19.02.07
Business improvement districts fail to connect; a government-commissioned report is warning that business improvement districts (BIDs), where local businesses team up to fund public realm improvements could be held back by the private sector’s lack of awareness of any resulting activity. The report says that 73 per cent of firms in BIDs - areas in which the majority of firms had voted to pay a levy to fund improvements - were unaware of any resulting BID activity. Furthermore 49 per cent claimed to be unaware of BIDs having been set up. In areas where there have been no BIDs established, only eight per cent of firms knew of the concept, which the report says could be, “potentially a major barrier to the further development of BIDs”. So far the scheme has been heavily dependent on funding from regional development agencies (RDAs) and councils, with local firms contributing to running costs. Although the future of BIDs could depend on further RDA support there is also a risk of the idea becoming indistinguishable from the local authority. Further information - Click here Regeneration 09.02.07
MPs may force casino review; the number of MPs who have registered opposition to a super-casino opening in Manchester has grown to over 100 and may force a government rethink. Tessa Jowell (pictured right), the culture secretary, told MPs and Lords in a private meeting that she is “considering the arguments for appointing an ad hoc committee of MPs to look again at the issue”. MPs and experts dealing with gambling addiction believe that the choice of eastern Manchester is the worst location because it is deprived but densely populated area that would suffer high instances of problem gambling. The news will be welcomed by Blackpool, seen by many as the logical choice for the country’s first Las Vegas-style gambling venue, but will infuriate Manchester council leaders. Observer 25.02.07
Small businesses turn to migrant skills; a study by the British Chambers of Commerce (BCC) says that small and medium sized businesses are turning to migrant labour because of the “shockingly low opinion” employers have “of the skills, experience and productivity” of British-born workers. The BCC survey follows hard on a survey by the Institute of Directors, which reported that employers rated migrants as harder working, more reliable and better skilled than their British counterparts. More than 500,000 eastern Europeans - almost two-thirds of them from Poland - have registered to work in the UK since 2004. David Frost (pictured right), the BCC’s director-general, said, “migrant workers have helped to fuel the UK economy, but it is troubling that so many employers do not want to employ British workers. The UK’s chronic skills shortages must be addressed by the government, and reform of the school curriculum is needed to ensure that young people enter the workforce with the necessary skills and the right attitude to get on in work. It is unsustainable to import our way out of the failings of the UK education system”. Further information – Click here Financial Times 12.02.07
Survey queries value of ethnic diversity; a survey of 300 small and medium sized enterprises (SMEs) casts doubt on the value of multicultural workplaces. The survey, which was backed by the CBI, was conducted by the Policy Research Institute on Ageing and Ethnicity and was the largest to date to chart business views on the subject. It found that while a third of respondents agreed that ethnic diversity contributed to performance, slightly more disagreed. Although 45 per cent had policies for making older workers feel more included and 42 per cent ran similar practices for female staff, only 25 per cent did so for ethnic minority staff. It also found that the SMEs, which make up the vast majority of Britain’s four million businesses, were not in a rush to diversify their workforce. Stephen Alambritis (pictured left) of the Federation of Small Businesses said, “the small business scene is very parochial” adding that 80 per cent of SMEs conducted their trade within a 50-mile radius. Further information - Click here Financial Times 20.02.07
Employers urged to sign skills pledge; a pilot scheme aimed at ensuring that all employees are trained to a higher skills level has been launched by Alan Johnson (pictured right), the secretary of state for education and skills. He has called on all employers to sign a public statement of commitment to raise the literacy and numeracy levels of all their staff to at least Level 2 standard - the equivalent of five GCSE passes at C or above. In return the DfES will assist firms to create training plans and assist with funding. In December Lord Leitch’s skills review called for at least 90 per cent of working age adults to have Level 2 qualifications by 2020. The skills pledge will be launched in the summer, after the government has had time to evaluate the initial trial. Further information - Click here Regeneration 16.02.07
Private schools must take poor pupils or lose tax break; a consultation document to be issued on 7th March by the Charity Commission will lay out the ground rules for independent schools to maintain their charitable status and the £100m tax breaks that this brings with it. At present independent schools qualify because as educational institutions they automatically qualify as charities. However the new charity law lays down a test of “public benefit” that will require them to demonstrate that they are not simply providing education for a privileged group. An expert, who has been consulted by the Charity Commission, believes that most schools will be able to comply. “It will be a wake-up call for some schools that have made no effort so far and think that educating their own pupils is enough. It won’t be, but they will have time to make changes”. Sunday Times 25.02.07
Top companies not reporting true greenhouse gas emissions; Christian Aid has claimed that Britain’s biggest companies are massively underreporting the amount of greenhouse gases that they are pumping into the atmosphere. They claim that the emissions generated by the country’s top 10 companies could be a third higher than stated - meaning that the UK’s overall contribution to global warming is being vastly underestimated. It bases its allegations on the claim that only 16 of the FTSE companies reported their carbon emissions using established standards and that if all of them reported on the same basis then the true figure could be 190 million tonnes higher. Further information - Click here Independent 19.02.07
White papers on climate change and energy are delayed; following Greenpeace’s court victory when Mr Justice Sullivan condemned the government’s consultation process over the future development of nuclear power as “misleading” and “seriously flawed”, Alistair Darling (pictured right), the trade and industry secretary, has announced that he is delaying next month’s energy white paper until May. He has also announced that a decision on the building of new nuclear power stations has been put back from July to the autumn. Virtually at the same time David Miliband, the environment secretary, announced that the climate change bill is to be published next month as a draft only - delaying the measure for at least a year. Miliband denied that he had been out manoeuvred by the chancellor and that the new procedure would give a chance for full consultation both in parliament and with the general public. In fact the chancellor is to deliver the latest of his keynote speeches on the environment next month to coincide with the publication of the draft bill. He is likely to stress his commitment to international action to combat global warming. One contentious issue is emissions targets where the government is opposed to the idea of rigid annual targets being supported by both the opposition parties. The bill would have included a commitment to cut carbon dioxide emissions by 60 per cent by 2050. Times 23.02.07, Guardian 23.02.07
Tour firm makes carbon offsetting mandatory; the specialist holiday company Holidaybreak is planning to make carbon offsetting against flights compulsory for all its customers and is calling on other major tour operators to follow suit. At present the company’s adventure holiday division, Explore, has an option on its website for customers to choose carbon offsetting when booking their holiday at a cost of about £40 for a long-haul flight. But Carl Michel, the chief executive of Holidaybreak and former marketing and strategy director for British Airways, said that the intention was to make offsetting part of the price. He said that “more and more customers are feeling guilty about flying and it is inevitable that this will lead to widespread changes in the way we think of holidays”. He instanced a weekend shopping trip to Vienna that would have been unthinkable 20 years ago and would once again become a thing of the past. He thought that there would be more holidays taken in the UK or people will drive to continental Europe rather than fly. Further information - Click here Independent 19.02.07
Carbon storage could be major industry; carbon capture and storage (CCS) - the filtering off and burying carbon dioxide emissions - is a potential new industry worth up to £2bn a year in the UK and £100bn worldwide. A number of British firms including BP and Centrica are keen to get started and the new sector is seen as a replacement for North Sea oil and gas in Scotland. Professor Stuart Haszeldine (pictured right) of Edinburgh University believes that the UK has extraordinary opportunities - the prospect of selling Mark 2 technology to China and India within five years - which could be lost if there is any further delay in giving the go-ahead. A government task force (including the Department of Trade and Industry, Department for Environment, Food and Rural Affairs and others) is examining the case for funding a demonstration plant and is due to give an answer “later in the year”. More complicated is the view of the Treasury, which has been talking up CCS for a number of years and could give firm encouragement in next month’s Budget. One area that it is working on is how to develop and protect an efficient market for CCS. One possible way is to put CCS plants within the EU Emissions Scheme for carbon, giving them an allocation of carbon permits. As the plants will emit only a small amount of CO², they could sell the unused quota of carbon to traditional power generators and manufacturers. Observer 25.02.07
Red tape thwarts wind farms; figures from the Department of Environment, Food and Rural Affairs (Defra) show that wind farms capable of producing the equivalent of 11 gigawatts (equal to eight per cent of UK electricity supply) are delayed by planning disputes. Local residents say they are unsightly and there are fears about the noise they make. Although the Scottish Executive has given approval for the world’s largest wave farm off the coast of Orkney and a medium-sized wind project in Yorkshire has got the go-ahead, the British Wind Energy Association says that delays are mounting. Some projects have been stuck for six years and many for four or five years. Developers claim that the delays are costing them millions of pounds in extra costs and warn that investors are threatening to move overseas. As a result experts claim that there is no hope that the government will meet its pledge to have 10 per cent of the UK’s electricity powered by renewable energy by 2010. In a further blow ministers are expected to admit within weeks that emissions of carbon dioxide rose again last year. Observer 25.02.07
House builders rush to produce eco-friendly homes; a month after the government proposed making estate agents display the energy performance of properties when the ratings become mandatory in June, two major eco-friendly housing developments have been announced. The London Development Agency has chosen BioRegional Quintain, a joint venture between BioRegional Properties and Quintain Estates, and Crest Nicholson to bring forward plans for 200 homes at Gallions Park in Docklands. The scheme, which is intended as an “exemplar scheme” for new housing in the capital, is being designed to allow a sustainable lifestyle for residents, using renewable energy, energy-efficient architecture, natural materials, on-site food growing and car and cycle clubs. The second scheme is for 700 “eco-excellent” homes on three former hospital sites in Epsom, Surrey. The developers will be Crest Nicholson and Galliford Try. However a warning that the government is putting the housing market at risk by “gold-plating” regulations to cut carbon emissions has been given by the Better Regulation Commission. They have called on Ruth Kelly (pictured right) , the communities secretary, to delay the requirements that all houses sold after 1st June should have an “energy performance certificate”. Further information - Click here for LDA and here for Better Regulation Commission Estates Gazette 17.02.07, FT 26.02.07
Australia bans incandescent light bulbs; Australia, which has so far, refused to sign the Kyoto Protocol, has become the first major nation to ban the traditional incandescent light bulb. The move, which will phase out the sale of the old light bulbs by 2010, will cut carbon emissions by four million tonnes and reduce domestic power bills by up to two-thirds. Further information - Click here Independent 21.02.07
Imperial to set up climate change research centre; Imperial College London has been given £12m to set up a climate change research centre by Jeremy Grantham, chairman of GMO, the Boston-based investment management company. The donation will fund 10 research posts, as well as providing a focal point for Imperial’s existing work in the field. Further information - Click here Financial Times 26.02.07
Congestion charge is good for London; an editorial in the Independent praises the congestion charge as a rarity amongst public projects; a hi-tech undertaking that was introduced on time and has worked almost without a glitch. It has done what the mayor said it would: reduced traffic congestion and improved air quality. Londoners have also received the promised quid pro quo: better public transport, largely in the form of more buses. Nor have the gloomy forecasts about lost business been borne out. Today may mark the first extension of the London charging zone - and with it, of the principle that motorists should pay more in congested areas- but we are confident that it will not be the last. Independent 19.02.07
Residents march against congestion charge extension; rarely had a street demonstration involved so many women in cashmere and pearls, some walking their designer pooches, marching up a boutique filled street in South Kensington. About 50 business owners, property dealers and wealthy neighbours protested about the congestion charge extension saying that it would destroy smaller, independent shops for which the area is famed. Merrick Cockell (pictured left) , the leader of Kensington and Chelsea Council, said that it was unfair to apply a “blanket charge” to all, including journeys to drop children at school or pregnant women visiting Chelsea and Westminster Hospital. Paul Watters, the AA’s head of public affairs, said that the London congestion charge could become a monster whilst Gordon Taylor, chairman of the West London Residents Association, said that only five per cent of the roads in the newly included area were congested and only at certain times. Independent 20.02.07
Crowded trains could mean 130,000 commuters standing; as many as 130,000 commuters could be forced to stand on over-crowded trains each morning within seven years as the number of workers travelling into London grows. With an extra 600,000 new jobs predicted for London over the coming decade and thousands of new houses planned for the south east, the trend for City workers to commute from further afield is expected to continue. According to Passenger Focus, the government-funded rail consumer watchdog, an estimated 70,000 had to stand on commuter services in 2004 - the latest date for which figures are available. Without significant extra capacity those numbers will increase to 130,000 in the mornings and 67,000 in the evenings when commuting times are more spread out. There have already been passenger protests in Bath and one Network Rail consultation paper warns that passengers may have to stand from Southampton by 2016. The Department of Transport said a rail strategy, due out in the summer, would give details of “how and where extra capacity can be created” to try and avoid the projected overcrowding. However many transport experts believe that overcrowding is inevitable, given the increase in commuting into London over the past decade and the projections for continued growth. Professor Stephen Glaister of Imperial College said that providing seats for everyone during the morning peak would cost “several arms and several legs”. “The only way that money would be raised is through passenger fares and it’s just too expensive. The passengers would never go for it”. Further information - Click here Financial Times 17.02.07
Venezuelan deal brings half-price bus fares; half-price bus fares for Londoners on income support are to be available from July under a deal negotiated between the mayor and Petroleos de Venezuela Europe, whereby the oil company will supply cheap fuel for the capital’s 8,000 buses. The deal is an outcome of last year’s meeting between the mayor and Hugo Chavez, Venezuela’s socialist president. Critics wondered why a country where 38 per cent of the population were living in poverty should be subsidising one of the world’s richest cities. Tony Travers (pictured left) of the London School of Economics said, “it seems very odd for London to accept aid from a relatively poor country. This seems to be part of Ken’s continuing infatuation with Latin American leftists, which is hangover from the idolisation of Castro in the 1960s and the 1970s.” Further information - Click here Times 21.02.07
New move to limit towers in the centre of London; developers of skyscrapers are facing a new planning crackdown by the government who seem poised to rein in what has for the past few years be seen as a liberal London planning regime that has approved a number of high-rise towers such as the 310ft Shard of Glass at London Bridge. However following a severe reprimand from Unesco about what it sees as lack of protection for London’s historic buildings, the Department of Culture, Media and Sport has indicated in documents presented at a planning inquiry that it will hold back on approvals for new buildings in Southwark and Westminster. Unesco referred particularly to the danger to the Tower of London and Westminster Abbey and also called for protection for the view from the South Bank towards the Tower. The government has said that it is planning to bring in a new protected view for the Tower in the London View Management Framework as well as a “visual impact study of the World Heritage site” (Westminster Abbey and the Palace of Westminster) as requested by Unesco. Some proposed buildings that are likely to be affected include the 180 metre Beetham Tower on Blackfriars Road close to the Thames, the plans for three towers on the Elizabeth House site at the front of Waterloo Station, and Land Securities’ plans for two 50-storey towers close to Victoria Station. Times 14.02.07
Secret plans for West End convention centre; the Observer claims to have obtained details of secret plans by the mayor to create London’s first purpose-built international convention centre. A world-class 5,000-seat facility would be built on land around Centre Point and would involve persuading the landlord of Centre Point to convert the building into a luxury hotel. A convention centre is seen as boosting the West End’s retail and leisure sector and helping to regenerate the eastern end of Oxford Street. The mayor’s staff are said to have been working on the plan for some years but have only recently approached the four main landlords in the area. There are still plenty of obstacles and it is unlikely to be built until after the 2012 Olympics. The FT carries an interview with Stuart Rose, chief executive of Marks and Spencer, urging the mayor to make moves to regenerate Oxford Street, which he describes as being a “sorry sight”, in the face of the new competition that will come from the White City and Stratford shopping centres. He says that he supports the extra planning powers that are being given to the mayor, as they will allow him to speed up the necessary redevelopment. Observer 25.02.07, Financial Times 26.02.07
Park Royal warns against housing; Park Royal, the 698ha west London industrial estate, is seeking to protect its status as either the largest industrial estate in Europe or London’s workshop. The Park Royal Opportunity Area Planning Framework seeks to protect its status and prevent it from being sold off for housing. Jackie Sadek, the chief executive of the Park Royal Partnership said, “in essence, the document says ‘hands off our sheds’. We are the biggest industrial estate in Europe and intend to keep it that way. This will be the first time that we have set it in stone that residential developers can’t pick off bits of the park.” Park Royal houses nearly 2,000 businesses, providing around 40,000 jobs. The framework recommends that no more than 500 new homes be built, mostly at the gateways to the estate. Further information - Click here Estates Gazette 24.02.07
Five pubs a week shut their doors in London; research by the Campaign for Real Ale (Camra) shows that London pubs are shutting at a rate of almost five a week. In 2006 230 pubs shut - a rise of 53 per cent over 2005. The latest victim is the Hog in the Pound in South Molton Street, just off Oxford Street, which has been sold to development company Kenmore Properties. Kenmore said that the proposed regeneration of Oxford Street would lead to increasing demand for high quality boutiques. Camra said “if others parts of our heritage, like castles, were wantonly closed there would be uproar but pubs are easy game. You don’t need planning permission to turn a pub into a restaurant or demolish it”. Further information - Click here
London Fashion Week seen as a success; the Guardian writes that on the surface London Fashion Week was business as usual. The shows were running up to an hour and half late, part of the ceiling collapsed on the audience at one event, and another big name designer, Paul Smith, said he was considering showing abroad. However as the shows wound down there was a sense of triumph and relief. After many years of being the most beleaguered of fashion showcases, wilting because of a lack of glitzy names and general interest, London seems to be on the up again, thanks to a strong international (American) presence. Fashion editors from major US publications were perched in the front rows whilst Marc Jacobs and Nathan Jenden, the London-born former creative director of Diane von Furstenburg, moved their shows to London from their normal New York base. The opening of a Marc Jacobs shop was a further sign that London is once more an international player. Michael Roberts of Vanity Fair said that once more there was a new group of fashion designers who were making a very strong statement. Equally the ramshackle nature of the London show is now seen as a refreshing alternative and Sarah Mower of US Vogue said that designers were returning to London because “they sense the smell of excitement”. Guardian 17.02.07
Tories start to make an issue of Olympic costs; Whitehall insiders are quoted as saying that Gordon Brown will have to offer MPs a vote on the Olympic budget offering the Conservatives the pretext to attack him over soaring costs. The event is becoming highly politicised and the Tories have set up an Olympics scrutiny panel. Hugh Robertson (pictured right), the shadow Olympics minister, said ministers would find it “difficult to win universal approval in parliament” until they produced a “clear, open and transparent” budget. Ministers’ concern about a budget vote becoming a post-mortem on the way the bid has been handled are being exacerbated by increasingly vocal opposition from all parties to the prospect of a raid on the National Lottery to help pay for the additional costs. Financial Times 13.02.07
Yet more rumours about building costs; the Guardian runs a story quoting Construction News, which claims that Sir Robert McAlpine (pictured left), the Olympic Delivery Authority’s (ODA) preferred bidder to build the Olympic stadium, has quoted £630m as its price. The original cost quoted in the London bid was £280m although the government and the ODA have conceded that given the need to build an arena that can downsize from 80,000 seats to 25,000 seats will probably cost £400m. Construction News say that the ODA will either have to scale down its ambition or re-negotiate its terms. It quotes one insider as saying that McAlpine are in a strong position because the ODA can not let them walk away. “McAlpine wants to use its own team of trade contractors and has put £630m as an opening price. The ODA is now looking to get the price down by looking at less ambitious designs and renegotiating terms. There’s going to be a lot of horse trading over the coming weeks”. McAlpine, who built Arsenal’s Emirates Stadium on time and on budget, do not want to get caught like Multiplex at Wembley. Guardian 15.02.07
Brown’s pledge of £100m for elite athletes has stalled; the FT reports that a pledge by Gordon Brown (pictured left) to raise £100m of sponsorship to “invest now in our 2012 Olympic champions” is still on the drawing board. The stalling of the proposal comes at a time when there is mounting concern that too many government initiatives are chasing a finite pool of private-sector funding for the 2012 event. Brown used the 2006 Budget to unveil £200m of state funding for elite athletes, to be matched by £100m from the private sector. He also announced £34m for a new national sports foundation. But these two new calls for cash are competing with the efforts of Locog, the London organising committee to raise £750m of sponsorship. UK Sport said that it was the responsibility of the Department of Culture Media and Sport (DCMS) to raise the money. In turn the DCMS said that ministers were exploring a number of options to raise the £100m. Financial Times 24.02.07
Select Committee critical of transport plan; a report from the House of Commons Select Committee on Transport warns that London’s Olympic chiefs need to develop a detailed contingency plan to prevent the “entire transport system collapsing” during the 2012 Games. The committee says that plans for moving competitors, officials and spectators around the capital remain “vague” and the Olympic Delivery Authority (ODA) needs to develop a sense of “urgency”. The ODA believes that normal traffic will decline by around eight per cent because of the summer holidays and a further eight per cent because Londoners will choose to avoid the Olympics. However the Select Committee warned that this assumed exodus was “highly speculative” and posed a “significant risk”. They argue that the Games would be a big draw for Londoners. The ODA responded that it was on track to make the 2012 Games “the best connected ever”. It said that its draft transport plan, published in October 2006, was unprecedented in being published six years ahead of the event. Further information - Click here Independent 21.02.07
Big firms to advise British sport on the route to 2012; the British Olympic Association has announce a new partnership called Sport in the City in which executives from FTSE 100 companies will advise the 33 winter and summer sports on how to modernise their organisations and nurture talent. Working with the Stock Exchange 10 firms and governing bodies have already been signed up including Corus (triathlon), Skandia (biathlon), British Gas (hockey), Land Securities (volleyball), British Airways (snow sport), SAB Milller (fencing), Wolseley (gymnastics), Home Retail Group (badminton) and Group 4 Securicor (judo). Further information - Click here Evening Standard 14.02.07
English Heritage still oppose amended Smithfield scheme; Thornfield Properties have failed to win the support of English Heritage (EH) for its scaled-back plans for the west wing of Smithfield market facing onto Farringdon Road. They had submitted a new planning application for a 380,000 sq ft scheme – some ten per cent smaller than the original proposals. This was achieved by flattening the main roof and reducing the number of storeys from nine to seven. The scheme was also widened to allow for the restoration of the Red House, which was listed last year following a campaign by SAVE Britain’s Heritage. Thornfield is appealing against the listing. EH had originally attacked the first 422,000 sq ft scheme as “too big and brutal” although it was given approval by the City of London Corporation. Ruth Kelly (pictured right) , the secretary of state for communities and local government, subsequently called in the scheme. A planning inquiry is due in June. Estates Gazette 17.02.07
More luxury flats; following the news that Candy & Candy have sold a penthouse at their new scheme of 86 super flats at One Hyde Park for £84m comes news of two more similar schemes. Candy & Candy are redeveloping the Middlesex Hospital site in Fitzrovia whilst Minerva have submitted plans to transform the site of the Thistle hotel in Lancaster Gate into 80 super-apartments looking over Hyde Park. It is understood that City bankers have already put in offers to buy several of the smaller flats for between £3m and £4m. There is only one problem for Minerva, who have teamed up with Northgate, the specialist upmarket flatbuilder, which is that they have applied to Westminster Council to pay extra to have the option to build some of the affordable housing segment elsewhere. The Times also reports that Millennium & Copthorne Hotels are considering the redevelopment of the Copthorne Tara Hotel in Kensington into luxury flats. Further information - Click here Times 20.02.07, Times 24.02.07
King’s Cross plans face judicial review; judicial review proceedings to overturn the consent for the £2bn regeneration scheme for King’s Cross have been launched by local campaign group King’s Cross Think Again. Their main aim is to get the housing plans to be revised to include 50 per cent rather than 40 per cent affordable housing. Further information - Click here Estates Gazette 17.02.07
Land Securities plans towers for Blackfriars Road; Land Securities have submitted plans for a 42-storey 250,000 sq ft residential tower and a 23-storey, 200,000 sq ft office tower at 20 Blackfriars Road, London SE1.Estates Gazette 17.02.07
Plans to redevelop New Covent Garden; the Covent Garden Market Authority, the government body that operates New Covent Garden in Vauxhall, has agreed a design brief for the rundown 56-acre site. The Market Authority specified that it wanted a 625,000 sq ft scheme on the Defra-owned land in a bid to secure the market’s long-term future. The 1974-built single-storey market houses 250 tenants in 564,000 sq ft of trading space. It is likely that the proposed scheme will push existing tenants into two-storey buildings to release surplus land for other commercial uses. A sale of the market is expected to pay for the redevelopment. A list of redevelopment options will be drawn up before a public consultation in the summer. Estates Gazette 17.02.07
North America deserts Grosvenor Square? The Estates Gazette says that the US government is considering a £500m-plus sale of the virtual freehold of its London embassy. The sale is part of a widely tipped move from its 225,000 sq ft building at 24-31 Grosvenor Square. Plans to leave the site were first mooted in 2000. It is the only embassy where the US government does not own the freehold. The US Navy’s 100,000 sq ft HQ at 20-21 Grosvenor Square is also on the market. The Canadian High Commission is also thought to be exploring options to leave its 125,000 sq ft building at 1-3 Grosvenor Square. The embassy, which needs eight acres for its new campus, had been tipped to bid for the 13-acre Chelsea Barracks but it has emerged that they are not on the shortlist. Other possible sites at Paddington and Canary Wharf have also been investigated. Estates Gazette 24.02.07
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