Biggest slowdown for a decade is forecast; Andrew Sentence, a member of the Bank of England’s Monetary Policy Committee, has forecast that the UK could experience its most “significant and sustained” slowdown in a decade as the economy adjusts from consumer-led growth to a greater reliance on investment and exports. He ruled out an outright recession of the kind experienced in the mid-70s, early 80s and early 90s- with output falling year on year- as a “remote risk”. A more stable monetary framework and a more flexible labour market meant the demand was unlikely to swing as wildly as previous decades. However he warned that there was little certainty over how “pronounced and prolonged” the anticipated slowdown would be. One structural change that could take place was a “rebalancing” of the UK economy which would mean that activities dependent on UK consumers or closely linked to property and financial markets would slow down more sharply than sectors able to benefit from a weak pound and strong demand in emerging markets. However, given the upward pressures on inflation, a “headwind of slower growth of output and demand” could be helpful to keep inflation on target. Further information Financial Times 21.01.08
House prices set to fall by seven per cent; Goldman Sachs has predicted that UK house prices will fall by five per cent this year and a further two per cent in 2009. They say that they have amended their original forecast of a three per cent decline in 2008 because of tighter credit conditions, falling house price expectations and falling mortgage approvals. It is also revising downwards its forecast for the number of property sales in 2008, after weak trading updates from housebuilders show forward orders are down by 10 per cent. Another report by Hometrack, the housing intelligence business, says that house prices have dropped for the fifth month in succession. However Richard Donnell, Hometrack’s director of research, believes that the worst of the housing market may be over. This is a view taken by two of the biggest house builders, Persimmon and Barratt, who although announcing that reservation levels have dropped by over 20 per cent say that average house prices are remaining firm and that activity could pick up in the second half of the year. In his press conference following the Bank’s latest inflation report, Mervyn King, the Governor of the Bank of England, said that he expected house prices to fall in real terms for as long as the next four years. Further information Daily Telegraph 25.02.08
The prospects for oil and food; Hamish McRae looks at the prospects of the two major factors in higher inflation- oil and food. The rise in oil price over the past 12 months has been so dramatic there must be a reasonable possibility of some decline. He quotes work done by the Bank Credit Analyst Group in Canada which, taking all the factors into account, comes up with a price of $75 a barrel. He says he does not know whether the very long-term downward trend in the price of food worldwide has been reversed for all time. Improved technology and transport coupled with additional agricultural land meant that the price of food was on a downward trend between the early 1800s and 2000. Since then prices have gone the other way. He says it takes a lot to reverse a 200-year trend. What we do know is that the rising demand for meat, particularly from China, and the rising cost of energy have combined to create an upward spike in world food prices. If there has been a reverse in the 200-year trend there would be alarming implications for social equality, bio-diversity (more land will be brought into cultivation), and for geopolitics. He points to the ludicrous fact that the US is converting maize into oil while the Middle East is using desalinated water to irrigate the desert to produce wheat. Independent on Sunday 24.02.08
‘Dependence on financial services and housing will be seen as structural weakness’; regarding the UK economy, Wolfgang Munchau says that given the UK’s relatively low productivity growth rate and the erosion of its scientific and engineering excellence, the British economy should clearly not have performed as well as it did for the past 15 years. He goes on: “In the next few years I expect the UK economic miracle to be exposed for what it was: an overlong joyride on the back of an overlong asset price bubble. The UK economy is about to undergo a downturn at least as big as that of the US- maybe even worse because of an even more inflated housing market and because the financial sector constitutes a larger share of gross domestic product”. He explains why he believes house prices need to go down by 25 per cent, and why the City of London is vulnerable to the credit crisis. He concludes that Britain’s reliance on the financial sector and housing, until recently seen as a great strength, will in future be seen as a structural weakness, similar to the French labour market or the Italian public sector. Financial Times 25.02.08
City big guns launch last-ditch assault on non-dom tax; a campaign has been launched by many of the City’s most influential trade associations to persuade the chancellor to delay the controversial tax proposals for “non-domiciled” workers for at least a year. The closing date for submissions to the Treasury is 28th February. Amongst those who have made submissions are the London Investment Banking Association, the British Bankers’ Association, the City of London Corporation, the Confederation of British Industry (CBI) and London First. They all want a cooling-down period of 12 months so the issues can be properly debated. Independent on Sunday 24.02.08
Government finally publishes cultural strategy; ministers have outlined the details of their cultural strategy at a press conference addressed by ministers from the Departments of Culture Media and Sport, Business and Enterprise, and Innovations Universities and Skills. Outlined by Andy Burnham, the culture secretary, the strategy aims to make the UK the “world’s creative hub” as a result of innovative schooling, 5,000 new apprenticeships in creative industries, and a Davos-esque global business convention in the style of the World Economic Forum. Other measures to encourage talent and generate jobs include giving all children a “creative education” and launching an independent inquiry into superfast broadband technology. There are also plans for regional venture capital funds and business support. Will Turner of the Hospital Group however argues that despite well-meaning rhetoric, the proposals are short on cohesive action to preserve Britain’s creative leadership in sectors ranging from film production to recorded music - “an industry that generates £60bn for the economy should welcome long-term measures to nurture talent such as the 26 initiatives on training, schools and apprenticeship announced in the Green Paper”. On the other hand, Camilla Cavendish says that the Green Paper is too prescriptive and centralising, failing to give credence to learning and excellence. Further information Times 14.02.08, Financial Times 23.02.08, Guardian 25.02.08
New policy is a lot more than Cool Britannia Mark 2; Mark Ravenhill welcomes the Culture Green Paper, stating that the government’s focus for arts and cultural activity is much more inspiring than the previous few years’ rather grim emphasis on box ticking in the name of social inclusion and multiculturalism. What seems to be emerging is the recognition that a society with a strong cultural policy is better at almost everything that it does. Ravenhill goes on that an excellent government arts policy now seems a real possibility, even if some of the details are vague. Years of empty words about developing a “creative, knowledge-based economy in a global environment” look as though they may have some foundation- which is all the more reason for Brown and anyone involved in government arts policy, to rapidly distance themselves from the Cool Britannia 2 banner. Guardian 18.02.08
Tories reveal ‘lost generation’ of jobless youngsters; a dossier on youth poverty based on parliamentary answers has been issued by Chris Grayling, the shadow secretary of state for work and pensions. It shows that nearly one in three young people- an estimated two million 16-to-24-year-olds- are living below the poverty line. One in six is claiming unemployment benefit and one in ten is officially classified as NEETs- not in education, employment or training. Chris Grayling said the emergence of a lost generation of young people was a damning indictment of a decade of Labour policies. A spokesman for the Department of Work and Pensions said that since 1997 youth claimant unemployment was down by almost 40 per cent. Further information Daily Telegraph 18.02.08
‘Business falling out of love with Labour’; the love affair between business and Labour appears to have hit a rocky patch. The furore over the taxation of high-earning “non-doms” has just been one in a confluence of events that has left many business leaders sceptical of the government and put the political future of the chancellor, Alistair Darling, in doubt. Chief among the concerns is the botched increase in capital gains tax but there are other issues including the plan to raise fuel duty by 2p a litre in April, the poor standard of school leavers, and the Northern Rock debacle. In a sign of evaporating confidence, a survey by the British Chambers of Commerce found that 41 per cent had more trust in David Cameron and shadow chancellor George Osborne, against 19 per cent for Brown and Darling. Three-quarters said their confidence in the government’s ability to handle the economy had declined over the past year. A common complaint was the manner in which Darling “blindsided” the business community by introducing ideas without consultation. Guardian 13.02.08
Fairtrade sales double to £500m as supermarkets join trend; marking the start of Fairtrade Fortnight the Fairtrade Foundation has announced that sales are expected to reach £500m. Twice as many Fairtrade products were sold in 2007 as in 2006, rising in value by 81 per cent- double the trend for the previous decade. Sainsbury’s and Waitrose’s decision to stock only Fairtrade bananas was a notable success (sales now over £150m) and the fruit overtook coffee as the largest-selling Fairtrade item. Tea and coffee rose by 24 per cent to £147m, helped by Marks and Spencer’s decision to stock only Fairtrade ranges. The biggest change from a manufacturer came from Tate & Lyle, who have announced that it intends to convert its entire £56m-a-year retail range to Fairtrade, which will raise the amount of fairly traded sugar 15-fold by the end of 2009. Further information - The Fairtrade Foundation and Tate & Lyle Independent 25.02.08
Tesco sets out to woo British farmers; addressing the National Farmers’ Union’s (NFU) annual conference Sir Terry Leahy, chief executive of Tesco, unveiled plans to sell £400m of local produce in its stores this year with a target of £1bn by 2011. The plan, which covers local produce from pork to biscuits, builds on the success of Tesco’s local choice milk, where it pays direct dairy farmers 28.5p per litre as part of a long-term agreement. The NFU criticised the lack of further long-term agreements. pointing out that the lamb, beef and pork industries are currently unprofitable. A spokesman said: “They need to do exactly the same with meat. Unless something is done the land will disappear. We’ve been talking to Tesco for years but they’ve steadfastly refused to do anything. What they are not doing is entering into long-term agreements”. Tesco has opened five new local buying offices and has said that it aims to stock more local lines than any of its rivals. Further information Daily Telegraph 18.02.08
Inner London is EU’s richest area; according to the latest Eurostat report inner London is the richest region in the EU’s 27 member states, surpassing Luxembourg, Brussels, Hamburg, and Ile-de-France. GDP in inner London in 2005 was more than three times the EU average or 303 per cent- compared with the lowest of 24 per cent in north-eastern Romania. The EU defines inner London as the usual boroughs of Camden, the City, Hackney, Hammersmith & Fulham, Islington, Kensington & Chelsea, Lambeth, Lewisham, Southwark, Tower Hamlets and Westminster with the addition of Newham and Haringey. Traditionally inner London ranks behind Frankfurt and Paris as Europe’s richest city as defined in purchasing power, but Eurostat’s figures show Luxembourg at 264 per cent, Brussels at 241 per cent, Hamburg at 201 per cent, Vienna at 178 per cent and the Ile-de-France (including Paris) at 173 per cent. It has also pulled ahead of the other British regions with Berkshire, Buckinghamshire and Oxfordshire slipping to seventh at 168 per cent and oil-rich north east Scotland falling out of the top 15. Britain’s poorest region at 77.4 per cent is Cornwall and the Isles of Scilly followed by west Wales and the Valleys at 79 per cent. Further information - Europa Independent 13.02.08
Tourist chiefs slam government; following their attacks on the government for its approach to tourism promotion, industry bosses met the prime minister on 25th February to discuss their concerns. The urgency of the concerns comes after figures showed that the number of visitors coming to Britain in the last six months of 2007 grew at its slowest pace since 2001. Although the overall numbers for 2007 hit a record 32.9m, according to the Office for National Statistics, growth tailed off sharply during the last six months. Tourism chiefs have blamed the government’s lack of investment in the industry for the slump, which saw visitor numbers grow by just one per cent over the year. Kurt Janson, director of the Tourism Alliance, said: “Ten years of underfunding marketing has reduced tourism growth to a sub-standard one per cent, down from a recent annual average of eight to nine per cent, and far short of the six per cent growth in global tourism during 2007”. Industry chiefs warned that following the cut in the tourism budget by 18 per cent in the autumn, the legacy of the 2012 Games could be squandered. Travelodge published a report claiming that the British economy could benefit by £3bn from the Games, compared to previous government estimates of £2bn. Further information - ONS and Travelodge Daily Telegraph 18.02.08, 25.02.08
Government gives RDAs green light to use ‘Jessica’; the Department for Communities and Local Government has given the green light to the regional development agencies (RDAs) to use a new EU-backed investment tool for urban areas. The Joint European Support for Sustainable Investment in City Areas (otherwise known as Jessica) allows member states to invest a portion of their structural funding in urban regeneration projects and to get a return on these projects. The European Investment Bank, which jointly runs Jessica with the EC, has agreed to fund a feasibility study for the use of Jessica in London, which will start at the end of February. Alex Conway, head of the London Development Agency’s (LDA) European Programme Management said that they intend to spend up to £30m of the £135m of European regional Development Fund cash it has been allocated between 2007 and 2013 through Jessica. The Welsh Assembly Government is also thought to want to go ahead with a feasibility study. Further information Regeneration 15.02.08
Super-agency to speed delivery of affordable homes in London and south east; a London sub-committee of the Homes and Communities Agency has been established to speed up the delivery of affordable homes in London and the south east. The London board will be chaired by Ken Livingstone, the London Mayor, with Sir Bob Kerslake, the chairman of the new agency, as vice-chairman. Further information Regeneration 15.02.08
Terracotta Army boosts British Museum visitors by 12 per cent; blockbuster exhibitions have proved to be one of the UK’s main tourism attractions with the British Museum’s figures going up 12 per cent to 5.4 million, thanks to the Terracotta Army exhibition and the Science Museum, with the “Science of Spying” exhibition going up 11 per cent to 2.7 million. The London Zoo showed the biggest increase at 21 per cent to reach 1.1 million. The figures have been compiled by the Association of Leading Tourist Attractions (Alva) in their 2007 list of leading attractions. The leading tourist attraction, even though it dropped three per cent, was Blackpool Pleasure Beach with 5.5 million visitors. Liverpool traded on its role as the European City of Culture in 2008 to record big increases for its major attractions, including the World Museum (up 37 per cent), the Merseyside Maritime Museum (up 36 per cent) and the Tate Liverpool (up 17 per cent). However the biggest single increase was shown by the National Trust’s Cragside House in Morpeth- the former home of the Victorian inventor and industrialist Lord Armstrong. The house, which includes the world’s first hydroelectric scheme, saw visitor numbers increase by 79 per cent. Further information Independent 25.02.08
Red Tape has cost £66bn since Labour came to power; the cumulative cost of business regulations introduced since Labour came to power in 1997 has risen to £66bn, according to the British Chambers of Commerce’s annual burdens barometer, an independently produced calculation of the cost of new regulation produced by the Manchester and London Business Schools. Further information Guardian 18.02.08.
Women in Enterprise Connecting to Contracts; a group of major companies including Pfizer, Accenture, Bank of America and Microsoft are supporting a new government initiative aimed at reducing the barriers to female entrepreneurs winning large corporate contracts. Women in Enterprise Connecting to Contracts (WEConnect), is based on an American scheme that started 16 years ago, and involves a certification scheme for businesses that are 51 per cent female-owned. Large companies will be able to use WEConnect’s database to find businesses that could bid for contracts and help meet diversity targets. The Women’s Enterprise Task Force, the government body that has created WEConnect, says that although 16 per cent of UK businesses are female owned they only win three to five per cent of corporate and public sector contracts. Further information Financial Times 23.02.08
Long-term unemployed to be forced to take permanent work; James Purnell, the new work and pensions secretary, has announced plans where the long-term unemployed could be forced to undertake permanent work (currently only temporary) in return for their benefits. The proposals are expected to give the private and voluntary sectors a much bigger role in welfare-to-work programmes. Everyone who is long-term unemployed on Jobseekers’ Allowance will be expected to work or to engage in work-related activity. Although initially the requirement will be for at least four weeks of full-time work, a job placement or community work, “in future we will be looking for bidders to go much further”. The contracts for private and voluntary providers, for which Jobcentre Plus will also be able to bid, will be larger and longer than current private sector deals such as the employment zones. Payment will also depend more heavily than it does now on outcomes- actually getting people into work and keeping them there. But “for the small number of people who refuse to take up the opportunities available, we will be looking at how we can develop a strict sanctions regime, including either cuts in benefit or an option of permanent work for benefit”. Currently there are 220,000 people classified as long-term unemployed because they have been out of work continuously for 12 months or more. Further information Financial Times 20.02.08, Times 20.02.08
Decline in Britain’s Poles? the Times claims that the wave of immigration from Poland that helped fuel Britain’s early 21st century boom is over. The paper claims that for the first time since the Poles arrived en masse four years ago more UK-based Poles are returning home than are entering Britain. Statistics show that only 38,680 Poles signed up for the government’s register of migrant workers in the third quarter of 2007, a slump of 18 per cent from the previous year. Because Poland is a member of the EU there are no embarkation controls and therefore no hard statistics on the numbers of Poles leaving the UK. However Polish officials, UK employment agencies and the Polish media all believe the tide of immigration has turned. The reasons include a tightening of economic conditions in the UK, a comparatively weak pound and an unprecedented surge in the Polish economy is making it difficult for Polish workers to make sufficient money to send home. Jan Mokrycki, president of the Federation of Poles in Great Britain said: “The first thing that’s been hit is the builders. There’s no doubt about it. Many are prepared to wait for the construction boom that’s going to happen for the 2012 Games”. Half of the estimated one million British-based Poles are expected to return to Poland according to the Centre for International Relations, a Warsaw-based think tank. Times 16.02.08
Managers do 40 days unpaid overtime a year; the average British manager works the equivalent of 40 days a year in unpaid overtime according to research by the Chartered Management Institute. A survey of more than 1,500 managers found 89 per cent regularly worked more than their contracted hours. In spite of prolonged soul-searching in boardrooms about helping executives achieve better work-life balance, this proportion remains almost the same as eight years ago. The unpaid overtime was equivalent to every manager putting in an extra 40 working days a year. After weekends, bank holidays, and annual leave, this amounted to an extra two months of labour every year. The sectors with the most severe long-hours culture were transport and IT. Long hours were least prevalent in central and local government, where only 27 per cent of management reported working two hours or more overtime. Further information Guardian 19.02.08
Financial services groups cut graduate recruitment; financial services groups are expected to recruit 15 per cent less graduates this year in the wake of the credit crunch according to a survey by Income Data Services (IDS). The survey of almost 100 private and public sector employers reported that graduate recruitment was generally “holding up” but “could easily tip downwards if a wider slowdown takes place”. IDS said: “As the 2008 graduate recruitment season unfolds it appears that caution is the watchword guiding employers’ decisions both about how much to pay and how many to take on”. Further information Financial Times 18.02.08
Brown moves to head off revolt on agency workers; Gordon Brown has moved to head off a revolt by 100 or more backbench MPs by asking Sir George Bain to head an inquiry into the treatment of temporary and agency workers. The MPs are pressing for the government to grant one million agency staff the same rights and pro-rata pay as full-time workers. MPs supported the second reading of a backbench bill giving agency workers new rights. The bill does not set a qualifying period before an agency worker gains the same rights as a full-time worker. The unions want six days and employers want one year. Guardian 19.02.08, 25.02.08
Bosses should fund language courses for workers; the Home Secretary Jacqui Smith says that companies should provide language lessons for workers with a poor grasp of English and give them study time. After publication of the green paper on citizenship the minister stressed the importance of English in helping foreigners integrate into communities. Under the points-based system for migration being introduced this week, new immigrants will be expected to show some grasp of spoken English before being granted a visa. The prime minister has also announced that there will be compulsory language tests for foreigners who want to marry British citizens and settle in the UK. EU students already receive free lessons under reciprocal arrangements with other EU countries, but the government cannot stipulate they learn the language before settling in the UK. An 18-week college course costs about £600. Susan Anderson, the Confederation of British Industry’s director of human resources policy, said that many companies were already helping to fund language training. Observer 24.02.08
Blueprint for business to shape degrees; the FT has obtained a copy of a Whitehall document called “Higher Levels Skills Strategy” that envisages that employers should gain significant new powers to shape higher education degrees. The 23-page document sets out the case for devoting the bulk of extra university funding over the next three years to degrees jointly designed and funded by employers. The document was produced by the Department for Innovation, Universities and Skills and is dated November 2007. However the FT says that it is understood to represent the department’s current thinking. Financial Times 26.02.08
£800m funding fails to cut university drop-out rate; university drop-out rates are as high as ever in spite of an £800m cash injection aimed at encouraging students to stay on reveals a report by the House of Commons Public Accounts Committee. The report says that each year more than 100,000 (28,000 full-timers, 87,000 part-timers) quit within a year and that twenty-two per cent of full-time students are no longer studying two years into their course. Courses with the highest drop out rates include science, engineering and maths. The former polytechnics and colleges of higher education have done best in widening participation in degree courses to youngsters from underprivileged backgrounds, but they have the worst staying on rates. Members of the elite Russell Group have the best retention rates. Further information Independent 20.02.08
Close sink schools to encourage social diversity; Philip Hunter, the chief schools adjudicator, tells the Guardian that secondary schools that have been abandoned by middle-class families should be closed to guard against social segregation. Equally with local authorities due to send out the letters about schools admissions some middle-class parents would have to be disappointed. For the first time this year a new admissions code addresses social segregation and requires local authorities to monitor whether it is reaching unacceptable levels. Hunter says there is no chance of bussing children across cities, but where there are schools with high levels of disadvantaged pupils alongside other schools with low levels, the sink schools should be shut. According to government data some 76 secondary and 700 primary schools have more than 50 per cent of their pupils on free school meals. Hunter advocates shutting the school with 50 per cent free school meals and dispersing the children. He says it is a solution that is not used enough. Guardian 26.02.08
One in five fail to sign up for new diplomas; more than 550 state secondary schools have failed to sign up to deliver the government’s flagship diplomas just months before they are due to be introduced in the classroom. In two authorities not a single school has signed up to a consortium to deliver the diplomas. Ministers have indicated that that no single school can deliver the entire range of 14 diplomas and that schools should link up with other institutions to ensure delivery. Mick Brookes of the National Association of Head Teachers said that he felt some heads were waiting to see how the first diplomas were delivered before committing themselves. Independent 26.02.08
London Academy for financial skills opens its doors; the new National Skills Academy for Financial Services has opened its doors in East India Dock Road in Tower Hamlets. The first of four, the new academy, which is being marketed as “just a stone’s throw from Canary Wharf”, is being hosted by Tower Hamlets College. A purpose-built centre to provide 600 people aged 16 and upwards with a range of courses teaching them financial skills and equipping them for the highly paid jobs on their doorstep. The Independent interviews two of the first students on the course. Dorian Williams aged 20 from Manor Park comes from a family with no history of going to university and he admits he lacked the confidence to go for a city finance job- even though he had been accepted for Royal Holloway College. However, thanks to a course on securities and investment and a mentor from the Financial Services Agency, he has now developed the confidence needed. Koyrun Naha Begun, also aged 20, had experience at Canary Wharf but only on a check-out till. Further information Independent 21.02.08
Mayor introduces charge on worst polluting vehicles; drivers of high-powered sports cars and 4X4s will be hit by a new £25 charge every time they enter central London under new plans announced by the mayor to reduce congestion and pollution. The London mayor, Ken Livingstone, said that from October around 30,000 of the worst polluting vehicles would face a three-fold price rise, while the most environmentally friendly cars would be able to enter the congestion zone free of charge. He said that the new charge was part of a package of measures, including the introduction of a clean air zone and a £500m investment in walking and cycling, that would help London reduce its CO² emissions by 60 per cent by 2025. Further information Guardian 13.02.08
Britain is third worst in EU on renewable energy; a document leaked to the Guardian shows that Britain is the third worst performer in the EU behind Malta and Luxembourg in its use of renewables and produces only two per cent of its energy from them. Last month the EU said that Britain must raise this share to 15 per cent by 2020. Malcolm Wicks, the minister for energy, has acknowledged that Britain needs a “revolution” in green technologies and insisted that the country was showing leadership in the area. However the document also shows that grants made by the Department for Business and Enterprise for households to install solar, wind or hydro-power will be under-spent by £10m over the next year. That is more than half of the £18m allocated for the next three years. Guardian 15.02.08
Government issues guidelines on ‘carbon credits’; industry critics have attacked the government’s new guidelines for carbon offsetting as doing little to curb malpractice in the rapidly growing market for carbon credits. The new publication was originally published in draft more than a year ago but publication was delayed after the FT revealed that companies were profiting from selling carbon credits that were environmentally worthless. However with the closure of one such scheme under the EU’s emissions trading scheme the government said that companies and individuals following its new guidelines could be confident of achieving their environmental goals. Carbon credits are bought by those wishing to balance out the negative impact of their activities on the climate by funding low-carbon technology, such as wind farms or solar panels. The new guidelines advise that only UN credits known as Certified Emission Reduction, should be used. Further information Financial Times 20.02.08
Property sector launches ‘green’ buildings code; an initiative to tackle the harmful effects of commercial property on the environment is being launched by a group of the sector’s leading organisations and corporate occupiers The so-called “environment code”, has been formulated by Investment Property Databank (IPD), which provides the benchmark for property valuations, together with CB Richard Ellis and Bureau Veritas. It has the support of the CBI and the Royal Institution of Chartered Surveyors as well as companies such as Barclays and BP. Corporate property is estimated to be responsible for 20 per cent of global CO² emissions, mainly via energy use, but also through water and waste production. About 50 per cent of a company’s CO² emissions are said to be produced by its real estate. The environment code provides a relatively simple template for collection, measurement and analysis of environmental information from real estate. It is designed to work alongside local building regulations but to be applicable anywhere. Christopher Hedley, director of IPD, said that companies could not address their environmental impact unless they could accurately measure it. He predicted that a standardised system would have an impact on the value of buildings, where the more polluting would be able to command less rent. Further information Financial Times 21.02.08
Branson flies off using coconut and babassu nuts; Richard Branson’s airline Virgin Atlantic flew an experimental flight to Amsterdam in a jumbo jet partly powered by bio-fuel made from babassu nuts and coconut oil- a first for any commercial aircraft. The Boeing 747 had one unmodified engine using a mixture of 25 per cent biofuel and 75 per cent standard fuel. He used the flight to appeal for a third runway at Heathrow, warning that multinational companies will leave because of the gridlock and bottlenecks. Further information Daily Telegraph 25.02.08
Crises threaten City’s global ranking;- the City’s pre-eminence as a competitive financial centre is under threat from the Northern Rock debacle and the proposed taxation of non-doms, according to authoritative unpublished research seen by the Times. Every six months the City of London publishes The Global Financial Centre Index, which ranks the competitiveness of 46 world financial centres. The research is carried out by Michael Mainelli, Professor of Commerce at Gresham College and his Z/Yen consultancy. London has been outranking New York as the ideal place to carry out financial services. However the next report, due out next month and which was carried out before the nationalisation of Northern Rock, shows the City’s lead has been cut drastically. The fear is that the next study due in the autumn will see the two cities level or even London falling behind. Further information Times 20.02.08
Livingstone to lead fight against post office closures; Ken Livingstone is threatening a legal challenge to the Post Office’s plans to close 169 branches and two crown post offices in London on the grounds that he consultation period has fallen short of the 12-week minimum recommended by the government. The Post Office is almost half-way through a programme of 46 consultations on proposals to achieve the government’s target of closing 2,500 of the 14,000 branches currently open. The London Plan would reduce the network to 681 branches in London together with 104 crown post offices and 15 branches operated by WH Smith. Further information - Royal Mail and Greater London Authority Evening Standard 19.02.08
Porsche to challenge £25 congestion charge; Porsche, the luxury carmaker, is planning a legal challenge to prevent its customers from paying the £25-a-day London congestion charge. The German company is seeking a judicial review aimed at quashing the Mayor’s plan to increase the charge for the most polluting cars from October. Porsche says that the charge would unfairly penalise successful people who generated wealth in the capital and that the charge was “unjust”. Livingstone’s office hit back accusing Porsche of “trying to impose gas-guzzling polluting cars on Londoners who do not want them”. They also accused Porsche of trying to intervene in the London mayoral election due on 1st May. In a subsequent statement Porsche said that the plan to tax the gas-guzzling vehicles would save the equivalent of four minutes of CO² emissions at Heathrow. Financial Times 20.02.08
Recovery package for Camden Market; the mayor has announced a recovery package for Camden Market following the fire in the Canal Market. The package is aimed at getting the businesses resume as quickly as possible and to tell visitors that the major part of the market, which is one of London’s top five tourist attractions, is still open. The package is being administered by a consortium including the London Development Agency, the London borough of Camden, Visit London and the Camden Town Traders Association. Meanwhile Richard Morrison, writing in the Times, says that a fortnight on Londoners are still divided about the blaze that caused £30m of damage to this grungy yet wildly popular area. Camden has an aura, unruly and uncouth, unlike any other precinct in the capital. Especially now that so many rough old London markets have been commercialised and tamed out of all recognition. He says that it is no wonder that Camden is never short of regeneration schemes with the latest coming from Richard Caring, the owner of Wentworth Golf Club, the Ivy and Annabel’s and others, who wants to transform the Stables Market into “the fashion centre of the world”. Morrison says that Camden needs far more visible policing and less overt substance abuse. But that’s where the gentrification should stop. Otherwise its whole point is lost. There are umpteen malls in London where people can drink Starbucks coffee and buy Primark jeans. Camden caters for those who prefer authenticity, individuality, serendipity and the absence of multinationals that dominate every other high street. Further information - Greater London Authority and Camden Council Times 23.02.08
National Express starts more commuter services into London; following a successful trial of a commuter coach service from Milton Keynes to Canary Wharf in April, National Express have announced a number of new services from Swindon and Reading with more routes planned. The coach service offers reclining seats, wi-fi access, newspapers and bottled water. It also offers a text service to tell passengers that it is on its way. They also promise fares 60-70 per cent below a monthly rail ticket and a journey time of two hours. At the end of last year National Express acquired King’s Ferry Travel, an independent coach operator that already provides commuter services from Kent and Essex into the City and Canary Wharf. National Express is arguing that they should be allowed to use the priority lanes on the motorways. One of their arguments is that coaches produce only 29g of CO² for every passenger kilometre travelled, compared with 52g for trains and 171g for cars. Further information Times 25.02.08
London’s ‘future is in the east’ says Lonely Planet; the latest Lonely Planet guide to London says that the lure of the West End is fading in the face of the emergence of the East End as a centre for trendy bars and as a home for creative types. The success of the O² Arena at the former Millennium Dome and the fact that the 2012 Games will be held at Stratford is said to be fuelling the drift towards areas such as Hackney, Dalston, Shoreditch and Spitalfields leading the report to claim that the “future belongs to the east”. The guide raves about “supercool Hoxton Square” and “fantastic Brick Lane”, and rates Clerkenwell, Shoreditch and Spitalfields as “London’s most creative and exciting districts”. Signs of wealth are starting to trickle into Whitechapel and Aldgate East, while property prices have soared in Mile End, Bethnal Green and Bow. “As the British capital gears up for the Games there’s everything to play for and the city has rarely felt so exciting and full of reasons to visit”. Further information Guardian 21.02.08
Euston Arch may be restored; hopes are rising that the Euston Arch, the first great monument of the Railway Age, can be rebuilt when Euston station is redeveloped from 2009 onwards. The arch was demolished in 1962 amid bitter controversy of the personal authority of then prime minister Harold Macmillan. The ensuing outcry played a part in ensuring that other stations such as Liverpool Street and St Pancras were fully restored after modernisation. Recently Sir Terry Farrell has damned Euston Road as London’s most dreadful highway and called for it to be transformed into a leafy boulevard like Paseo del Prado in Madrid. He went on: “As it stands, Euston station is a textbook example of how not to plan a station. The arch should come back as one of the great set pieces along the Euston Road”. Dan Cruickshank is one of the leaders of the campaign, who ascertained ten years ago that the rumour that the stones from the Arch had been numbered and stored was not true. Indeed most of them were given to the British Waterways Board to fill in a hole that had been scoured in the River Lea, close to the 2012 Games site. He admits that the costs of restoring the Arch will have gone up from the 1996 estimate of £6m but says that £10m out of a £300m budget for the redevelopment of Euston is far from out of the question. Network Rail is due to announce its choice of architect for the new Euston station in March. Times 18.02.08
“Where it’s all happening”; Hilary Alexander, fashion editor of the Daily Telegraph, says that London Fashion Week was “just like the good old days” with teeming, screaming, ticketless crowds trying to get into any number of must-see events. She says that at last London is riding the crest of a wave of new talent. We can stop searching for the “new McQueen” or “another Galliano” because we now have Gareth Pugh, Marios Schwab, Erdem Moralioglu, Louise Goldin, Roksanda Ilinic, Richard Nicoll and Christopher Kane- and that’s just for starters. We also have revived labels such as Ossie Clark and Biba, the new heritage generation of Jaeger London and Aquascutum, and the solid foundation of well-established brands that have stayed loyal to London, including Paul Smith, Betty Jackson, Nicole Farhi, John Rocha and Jasper Conran. Then there were the hip young designers returning such as Luella Bartley as well as the return of Dame Vivienne Westwood. What it did not have were representatives from big American stores but there was a marked increase in the press and buyers coming from the new markets of Russia, China and India. Graydon Carter, editor-in-chief of Vanity Fair, when asked why he had chosen London to launch the exhibition of 100 years of Vanity Fair portraits said: “This is where it’s all happening”. Daily Telegraph 18.02.08
London Assembly warns about future of street markets; according to a new report produced by the Greater London Assembly’s (GLA) Economic Development Committee, Petticoat Lane and dozens of other local authority-run street markets are dying and that unless action is taken now, only a few “gourmet” markets aimed at the affluent minority will remain. The report says that in the last 10 years, 15 borough-run markets have closed, 17 are smaller than they were and only seven have expanded. There is also an increased proportion of markets with empty pitches, up from 38 per cent in 1997 to 48 per cent in 2007. At the same time, London has seen a boom in privately-run farmers’ markets and specialist markets offering organic and artisan products. Dee Doocey, the chairman of the committee, says that rising rents, the march of City office developments, gentrification and changing shopping habits are amongst the threats. She wants the mayor to launch a “100 London Markets” strategy to protect market spaces by “adopting and implementing planning policies to protect them from the threat of redevelopment”. Tower Hamlets Council, which runs Petticoat Lane, agrees with the reasons but wants to add the congestion charge as a factor and would like to redraw the zone to omit the market. Further information Guardian 13.02.08
Moscow tops hotel price league; somewhat unexpectedly London comes tenth in the latest survey of worldwide hotel prices, which is led by Moscow with average room rates nearing £250 a night. Mumbai, which rose from 28th to 7th, was the fastest riser with average prices of £160. The London average was £154 per night compared to New York (£192), Paris (£171) and Dubai (£165). Further information Daily Telegraph 18.02.08
Security costs mean Armitt cannot guarantee 2012 budget; the Times interviews John Armitt, the man who left Network Rail to become chairman of the Olympic Delivery Authority. He is quizzed about whether the 2012 Games can be delivered with £9.3bn, the updated budget announced by the government in December. He says he cannot guarantee it and points to security as “one of the big issues” facing the 2012 organisers with the Home Office having to be prepared to constantly adjust in light of levels of risk. He goes on: “Setting security aside, I can’t guarantee [it], but I do feel pretty confident that [£9.3 billion] is a sensible number to going ahead with. The number one priority is time, but right behind it is cost. I’m very confident that we will complete on time”. Times 25.02.08
Culture Green Paper has repercussions for London schemes; the Creative Industries Green Paper has a number of potential repercussions for the London property market involving the preservation of live music venues. The need to safeguard historic music venues will threaten the proposed redevelopment of the Astoria on Charing Cross Road and the Hammersmith Palais. Derwent has assembled a large land holding around the Astoria with a view to a mixed-use scheme. The planning brief from Westminster calls for a 21,500 sq ft theatre to be included but not a specific music venue (although the Astoria was once a theatre). London & Regional are also planning to replace the Hammersmith Palais with an 80,000 sq ft mixed office scheme. The Green Paper also calls for a £200m national film centre and a permanent home for fashion shows in London. The British Film Institute is currently negotiating funding for a film complex on a site next to Hungerford Bridge whilst the London College of Fashion has held talks with Lend Lease about a 500,000 sq ft campus at Elephant & Castle. A senior property adviser questions the viability of the government’s proposals, as the two music venues’ revenues only covered their rents and are not enough to fund much-needed redevelopment. Ken Livingstone has announced that he will publish new planning rules designed to safeguard small and midsized music venues in the capital. Estates Gazette 16.02.08, Evening Standard 25.02.08
Luxury flats achieve record prices; more than half the flats at One Hyde Park, the high-profile luxury development in Knightsbridge, which is two years away from completion, have been sold. Over £600m has already been generated by sales with an average sale price per flat of £20m, which equates to £4,600 per sq ft. One third of the flats have been bought by Russians. Independent 19.02.08
Crown sells Regent’s Park crescent; the Crown Estate has sold the John Nash-designed Park Crescent, a crescent of Georgian houses at the top of Portland Place facing regent’s Park, to Great Portland Estates. The deal has been done by a swap for 850,000 sq ft of commercial space in the West End, mostly in the form of office blocks in Regent Street. Great Portland, which previously owned some of the buildings in Park Crescent, is likely to convert the buildings from commercial to residential as leases start to expire in 2010. It is also likely to include a hotel. Estates Gazette 23.02.08
Brentford Football Club could trigger 40-acre regeneration scheme; a masterplan for a 40-acre site, inspired by the regeneration around Arsenal’s new stadium in Islington is being drawn up by a consortium comprising Brentford FC, Barratt Homes and Anthony Spencer, the consultant and investor who played a leading role in the Emirates development. Hounslow Council has identified the site, around Brentford’s proposed new stadium on Lionel Road, as a major development opportunity. It has also said that it may consider using compulsory purchase powers to facilitate a wider regeneration of the land known as the Brentford Diamond (the area between Chiswick High Street and the Great West Road). The League Two football club has just completed the purchase of the 7.6-acre site in Lionel Road through its development partner Barratt. The stadium is seen as the potential catalyst for a “phase two” development of around 3m sq ft, with 2,500 homes, shops, cinemas and other commercial space. Estates Gazette 23.02.08
Irish consortium plans 300,000 sq ft mixed-use scheme in Midtown; an Irish consortium is planning a 300,000 sq ft mixed-use scheme based on High Holborn House to rival neighbouring MidCity Place. The Holborn Property Unit Trust has submitted Sheppard Robson-designed plans to Camden Council to turn the one-acre site into 250,000 sq ft of offices with ground floor retail, 28 homes and 22 student flats. The site is bounded by High Holborn, Brownlow Street, Bedford Row and Hand Court. The consortium hopes to benefit from rising rents in the Midtown area caused by a severe shortage of office space and lack of development. Last month MidCity Place achieved £80 per sq ft on part of a floor, while Land Securities’ New Street Square has seen rents hit £76 per sq ft. The only Midtown development close to completion is Castlemore’s 180,000 sq ft at 40 Holborn Viaduct. Law firm Mischon de Reya is in negotiation to take the entire building at £60 per sq ft. Estates Gazette 23.02.08
grapevine is produced twice monthly (except in August and December when there
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Next issue on 13th March 2008
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