Rates are heading for six per cent; the minutes of the Bank of England Monetary Policy Committee (MPC) for May show that for the first time there was a unanimous vote to raise interest rates by 0.25 per cent to 5.5 per cent - a six-year high. There was also an in-depth discussion about whether rates should be raised by 0.5 per cent rather than the quarter that was agreed upon. The MPC has never raised the rate by more than 0.25 in its ten-year history. According to the Independent the minutes also contain a thinly veiled warning that rates are due to rise again - possibly as soon as June. Jonathan Loynes (pictured right), chief European economist at Capital Economics, also predicts a rise in June. “We now expect rates to reach six per cent. With overall economic activity likely to remain pretty solid in the foreseeable future and the MPC’s inflation concerns unlikely to disappear for some time, we see little prospect for now that rates will come back down again quickly next year”. Further information - Click here Independent 24.05.07
OECD raises forecast for UK economic growth; the Paris-based Organisation for Economic Co-operation and Development (OECD) has raised its forecast for UK economic growth this year to 2.7 per cent - an increase of 0.1 per cent over its forecast in November 2006 but still below the Chancellor’s 2.75-3.25 per cent made in the Budget. For 2008 it is forecasting 2.5 per cent. It identifies three main risks to the generally benign scenario, which could prompt higher interest rates. First, labour market bottlenecks could appear as inward immigration slows; second, the housing market might fail to slow as expected; and third, the higher cost of living could lead to inflationary wage demands. Further information - Click here Independent 25.05.07
Fears grow over food price inflation; retail food prices are heading for their biggest annual increase in as much as 30 years, raising fears that the world faces an unprecedented period of food price inflation. Prices have soared as the expanding biofuels industry, climate change and the growing prosperity of nations such as India and China push up the costs of farm commodities such as wheat, corn, milk and oils. Food companies have started to pass on these increases to the customers but the prospect of sustained commodity price rises means that the industry’s profits could be hit as it is forced to absorb the higher costs itself. Both Hershey and Nestlé have warned that their profits may be cut. In the USA food prices have risen by 6.7 per cent, seasonally adjusted, since the beginning of the year whilst the UK consumer price index showed annual food price inflation of six per cent in April. Financial Times 24.05.07
Finance industry is a ‘cuckoo in the nest’; a report by the Ernst & Young Item Club says that the booming financial and business sector is vital to the future success of the economy but that the strength of the City has had a detrimental effect on Britain’s struggling manufacturing sector. The study says that Britain is winning in the global and business services market, with the services sector (helped by a light touch regulatory regime for the City) growing more rapidly than in the USA since 1990. There was, though a “huge contrast” with manufacturing. Peter Spencer (pictured right), chief economist to the Item Club, said, “output in the service sector has risen by three per cent a year on average since 1997, which is a remarkable achievement. Over half the new jobs in the last decade have been in financial and business services and the sector now employs nearly 30 per cent of the workforce compared with 14 per cent in 1980. That will only increase in coming decades.” This trend should be aided by economic policy by investment in skills, spending on infrastructure projects such as Crossrail and vigilance towards “regulatory creep”, particularly from Brussels. Spencer said that Britain cannot take the future success of the City for granted. It could probably shrug off a crash in the stock market but would be vulnerable to increased red tape. Further information - Click here Guardian 21.05.07
Mortgage lending slows and VAT surges; mortgage lending slowed sharply in April according to a trio of reports from the British Bankers’ Association (BBA), the Building Societies Association (BSA) and the Council for Mortgage Lenders (CML). The BBA said that high street banks agreed £5bn in new mortgages, down £0.1bn from March and £0.3m below the recent monthly average of £5.4bn. David Dooks (pictured right), the BBA’s director of statistics, said: “High house prices and increasing monthly repayment costs are causing a slowdown in the mortgage market”. Meanwhile the government got some further good news. Thanks to better-than-expected VAT receipts and a slowdown in public spending the Treasury’s coffers were in the black to the tune of £3.766bn in April against £1,492bn last April. Further Information - Click here for BBA and here for National Statistics Independent 22.05.07
UK housing markets hits turning point; house prices have stagnated or fallen in almost two-thirds of UK postcodes in May as rising interest rates squeeze cash-strapped buyers out of the market. This is the verdict of Hometrack in their latest monthly report. They also say that prices rose in just 34 per cent of districts in May. Richard Donnell, Hometrack’s director of research, said: “I think the impact of the rate rises and the threat of more, means we’re seeing more supply coming onto the market, and we’re going to start to see the headline rate of price growth coming down in the rest of the year”. Mark Saddleton, group strategist at Nationwide, said the housing market was likely to show signs of slowing in the coming months. “We are expecting affordability constraints to impact in the second half of the year”. Ed Stansfield, of Capital Economics, said that with many borrowers on fixed-price rate deals, it would take a long time for the full impact of higher rates to be felt; but predicted a ‘transactions recession’ over the next 12 months. Further information - Click here Observer 26.05.07
Brown to face Home Office headache; the FT says that a record number of prisoners coinciding with renewed controversy over control orders has raised the question of whether the Home Office will prove a political liability for Gordon Brown (pictured left). Experts are warning that the prime minister-elect will have to implement potentially unpopular policies on sentencing and rehabilitation if he is to control the prison population. Equally the Parliamentary joint committee on human rights has written to the home secretary seeking a clarification on his warning that the UK would have to consider opting out of European human rights legislation if it could not find effective way of dealing with terrorist suspects. The home secretary intends to outline new measures, which could form the basis of another anti-terrorism bill, before he steps down at the end of June. But it will be left to Mr Brown to make the difficult decisions in this area, not least whether to try again to increase the 28-day limit on holding suspects without charge to 90 days - a proposal that caused Tony Blair’s first Commons defeat in 2005. Financial Times 26.05.07
Brown should learn from Sarkozy; the FT urges the incoming prime minister to learn from President Sarkozy (pictured right) in how to create a cabinet. Sarkozy said that loyalty is a matter of sentiment and the key to government is efficiency. Philip Stephens says that Sarkozy has been true to his word and that no one could say that his administration is full of cronies. He has drawn talent from wherever he could find it. Brown has an opportunity to demonstrate that his is an entirely fresh administration, although most MPs do not see it quite like that. Former ministers who served the chancellor as lieutenants during the long war with Blair are claiming their rewards. Within the Cabinet, long-term loyalists are joined in the queue for preferment by those whose devotion to the chancellor is rather more recent. Then there is the contest for the Labour’s deputy leadership. Five of the contenders (Jon Cruddas is the exception) assume that their candidatures should be a guarantee of a well-padded seat at the top table. Sadly, on the evidence of their campaigns only Cruddas has a claim to anything. More broadly, this is the moment for Brown to thank his acolytes and wish them well. Others such as Jack Straw, Margaret Beckett and Des Browne should be offered the same farewell handshake. A bold remaking of the cabinet would see David Miliband sent to the Treasury or the Foreign Office and, at the very least, seven or eight new entrants to the cabinet. The names of the up-and-coming are already familiar: the two Eds- Balls and Miliband- James Purnell, Liam Byrne, Caroline Flint, Pat MacFadden and Andy Burnham amongst them. Financial Times 29.05.07
Youth services to gain dormant bank accounts; a Treasury consultation document proposes that most of the hundreds of millions of pounds lying in dormant bank accounts should be used to fund youth services and financial inclusion projects. Third sector leaders, who wanted the money invested in a “social investment bank” to support the growth of voluntary bodies and social enterprises, expressed disappointment in the plans. But the Treasury consultation document says only that “resources permitting” it would like to see a portion of the unclaimed assets used to boost social investment. The closing date for the consultation is 1st August 2007. Further information - Click here Regeneration 25.05.07
European migrants change their mind about staying; eastern European migrants who have no plans to settle in Britain permanently when they arrive often change their minds after a few months according to research commissioned by the Joseph Rowntree Foundation. Only six per cent of those surveyed planned to remain in Britain when they first moved here. But after a year that figure goes up to just under a quarter. Even those who intend to return home eventually stayed on longer than planned, staying on average 14 months longer than planned. The most likely migrants to stay on were women and high earners. However the report, which was compiled by a research team from Sussex and Oxford universities, says that the “short-sighted” assumption that there is no need to help temporary residents settle into life in the UK is causing problems for service providers and discouraging integration. Less than half of those interviewed had been told about their rights and responsibilities and there was no advice on what was acceptable behaviour. Further information - Click here Guardian 29.05.07
Lure of early retirement is waning; a study of 21,000 people in 21 countries conducted by HSBC has found that the popularity of early retirement appears to be waning as people work into their 70s. The report, The New Old Age, finds that 11 per cent of people in their 70s and a third of those in their 60s are still in some form of employment. The figure is even higher in the US where 19 per cent of 70 year olds are still working. Ruth Sunderland in the Observer says that rather than worrying how fewer workers can support more and more dependent pensioners the report shows that older people are not a drain on society: quite the opposite. Those in their 60s and 70s are enormous contributors to local communities and the economy as a whole. In the UK, the 60-79 age group adds £59bn of value a year through tax payments, volunteer work and support to their families. A large number still have jobs - 3.2 million over-sixties in the UK. However there are consequences. Ruth Sunderland says that the over-forties, who bought their first homes before the mid-1990s have benefited from a huge transfer of wealth from the young to their elders, triggered by rising house prices. The likelihood of clashes between generations as the mature continue to gain wealth and commandeer a bigger slice of public spending on healthcare while the younger generations become increasingly indebted. Observer 27.05.07
Public pension funds lead the way on SRI; the FT Funds Management survey devotes a page to a review of the recent report published by the United Nationals Environment Programme Finance Initiative and the UK Social Investment Forum Sustainable Pensions project. This examined how international public pension funds are tackling responsible investment and the diverse approaches that are being used. Further information - Click here Financial Times 21.05.07
Green groups attack new planning laws; Friends of the Earth has attacked the white paper on planning as a method of “steamrollering” objections to major new schemes for nuclear power stations, runways, motorways, waste incinerators and even wind farms. The Campaign to Protect Rural England (CPRE) fear the white paper will make it easier to develop major infrastructure projects, such as large supermarkets and housing estates on Greenfield land. The white paper, introduced by Ruth Kelly, proposes to shake up the current system of lengthy and expensive planning inquiries with an independent planning commission. This will cut the time taken for schemes such as Terminal 5 from several years to a limit of nine months. One commentator described the proposed system as “Ministers make big, strategic decisions (we must have nuclear power) and the Planning Commission decides where to put them. Local people will then be “consulted”. Experience tells us “consultation” is not what it seems. The public is engaged in the process to be re-educated”. Caroline Spelman for the Conservatives condemned the decision to do away with public inquiries as undemocratic but immediately got caught in a row with the CBI. They hailed the new proposals as being vital to improving the UK’s competitiveness. The white paper now goes out for consultation to be followed by a bill in the autumn. The new commission would start work in April 2009. Further information - DCLG, Friends of the Earth & CBI Independent 22.05.07, Financial Times 22.05.07
Jenkins accuses Brown of being in the hold of the supermarkets; Simon Jenkins (pictured right) says that if the planning white paper passes into law, Britain will be the only nation in the free world where citizens and their democratic institutions will enjoy no discretion over the pace and pattern of change of their communities. He says that the white paper does two things. It limits the scope for local councils and protestors to impede projects deemed as “national”, such as motorways, and power stations. At the other end of the spectrum it frees individual property-owners from detailed planning control. He does not disagree with the distinction between truly national projects and those of local import. However while it makes sense to have a national argument about a national project the proposal that major decisions will have no recourse to any democratic institution at all is so bizarre that miles of new motorway will probably end up before a European court. He sees the government’s craving for ever wider powers over land-use planning as megalomaniac. The real motivation, he believes is revealed in the so-called “Tesco clauses” in the white paper – which equate supermarkets to nuclear power stations as national infrastructure projects. Jenkins wonders about the hold the big supermarkets and construction firms exercise over Gordon Brown, Ruth Kelly and Yvette Cooper. He concludes that there is always a case for streamlining bureaucracy but regulations can be re-written without stripping away the rights of those whom the regulations are supposed to protect. Guardian 23.05.07
Multi-billion rail plans aimed at tackling congestion; the government will unveil a multi-billion pound rebuilding programme for the British rail network this summer to ease congestion on the most crowded lines. Ministers will give the go-ahead for the £500m reconstruction of Birmingham New Street station and are close to approving a £3.5bn overhaul of the former Thameslink route through London. The two large developments will feature in the government’s strategy for the railways 2009-2014 to be announced in July. Gordon Brown is understood to favour the £10bn Crossrail project that will link Heathrow with the City and Canary Wharf - however he has yet to decide whether the government will put up the estimated £3bn in state aid that it needs to get off the ground, amid speculation that he will announce the go-ahead in his first 100 days. Guardian 29.05.07
Homes plan for Thames Gateway ‘in risk of collapse’; the National Audit Office has given a warning that the plans for 160,000 new homes in Thames Gateway are in danger of collapse. The NAO blames the Department of Communities and Local Government for failing to produce a coherent, fully costed plan for the Thames Gateway programme. The project, which has already cost £7bn, involves ambitious transport and housing development from Canary Wharf to the mouth of the Thames Estuary. In particular the target of 160,000 new homes by 2016 will be missed unless the building rate is doubled. Only about 24,000 were built between 2001 and 2005. Further information - Click here Times 23.05.07
Lipton calls for abolition of “use class” system; Sir Stuart Lipton (pictured left) has called for the abolition of the “use class” system in planning, which he considers places severe restrictions on the switching of property from one use to another. He attacked the 60-year-old system at a Smith Institute seminar held days before the publication of the new planning white paper. He said that the current system, which categorises buildings into 15 “uses” under A, B, C, D and the sui generic (class of its own) headings, should be de-regulated. The system had been introduced in 1947 in the era of smokestack industries and he went on, “Why don’t we simply abolish the system and let the market find its own feet?” He also pointed out that since 1947 there had been 944 planning laws published and that the system was “a nightmare of constant change and complexity”. Estates Gazette 19.05.07
Homes plan for Thames Gateway ‘in risk of collapse’; the National Audit Office has given a warning that the plans for 160,000 new homes in Thames Gateway are in danger of collapse. The NAO blames the Department of Communities and Local Government for failing to produce a coherent, fully costed plan for the Thames Gateway programme. The project, which has already cost £7bn, involves ambitious transport and housing development from Canary Wharf to the mouth of the Thames Estuary. In particular the target of 160,000 new homes by 2016 will be missed unless the building rate is doubled. Only about 24,000 were built between 2001 and 2005. Further information - Click here Times 23.05.07
Airport policy is tying itself up in knots; the Independent heralds the fact that the public inquiry into the expansion of Stansted, which starts next week, may be the last of its kind. Under the new planning proposals, which may not come into force until 2010, there will be a special system for dealing with major infrastructure projects such as airports. Even so unlike the Terminal 5 inquiry, Stansted is only expected to last until October. There is already one potential anomaly. Planning experts say that the government would have to bring up environmental issues but on one hand it wants a massive growth in airport capacity and on the other a 60 per cent cut in carbon emissions. If flights are not limited the estimated number of passengers passing through UK airports will rise from 228 million in 2005 to 490 million by 2030. At Stansted BAA wants to raise capacity from 25 to 35 million passengers a year and if the public inquiry allows this expansion, BAA will go ahead with a second runway. At Heathrow it wants to add a third runway. Heathrow with two runways was built to handle 45 m passengers a year. Last year it handled 68m. Frankfurt with four runways deals with 50m passengers a year. Any delays in the expansion of Heathrow would see it slip even further down the pecking order of European airports. It used to serve the second largest number of destinations in Europe, now it is down to fourth behind Paris, Frankfurt and Schipol. Independent on Sunday 27.05.07
EEF criticises the work of the RDAs; in its evidence to the Treasury review of regional economic regeneration the Engineering Employers Confederation (EEF) says that the regional development agencies (RDAs) are spending too much of their time on hitting Whitehall targets and not enough on improving economic growth in their regions. The report says that the nine English regions, which will spend £2.3bn this year, have done little to improve the competitiveness of their regions since they were created in 1997. Targets set by the Treasury have encouraged the RDAs to focus on outputs such as jobs created and business start-ups helped, rather than on raising regional productivity to create sustainable economic growth in the future. The low rates of private sector investment in the two Midlands regions, Yorkshire and Humberside and the north-east, showed that they had not created a basis for sustained economic growth. Due to the public sector, unemployment was down in all regions but the failure to establish a healthy entrepreneurial culture in the north and the midlands had left these regions unduly dependent on public sector jobs. Further information - Click here Financial Times 21.05.07
Think tank calls for local powers to keep hospitals open; the Institute for Public Policy Research (IPPR) says that ministers should be stripped of the powers to decide local hospital closures in order to rebuild public confidence. Instead local authorities should be able to call directly on the Independent Reconfiguration Panel to examine decisions such as closures. The IPPR says that medical evidence for reorganisation is so strong that “people should be out on the streets campaigning for changes to NHS services to protect the health of their families, not to keep the services the way they are”. But the public has so little faith that consultations are genuine. People believe that the Government has made up its mind about which services to close. Further information - Click here Financial Times 28.05.07
Think Tank calls for new local levy; another document from the IPPR calls for English cities to be allowed to introduce a local business rate to fund transport schemes needed for economic growth. The IPPR calculates that a supplementary business rate of two pence in Birmingham would raise £15.4m a year, allowing the city to borrow £118m over ten years to fill the £114m funding gap for the redevelopment of New Street station. Similarly a two pence supplementary business rate in Manchester would bring in more than £40m a year, translating into a possible ten-year loan of £310m over ten years. This would help to meet the £380m local bill for a proposed extension of the Metrolink tram network to Oldham and Rochdale, East Manchester and Manchester Airport. Further information - Click here Regeneration 25.05.07
Marketing to Muslims; according to JWT the UK’s two million Muslim consumers are Britain’s biggest untapped niche market. The agency argues that the Muslim market in the UK is bound to grow; it comprises three per cent of the population, is Britain’s second-largest faith group and has the youngest age profile. Although Muslims are amongst the most deprived groups in Britain, collectively they have a spending power of £20.5bn. There are also more than 5,000 Muslim millionaires holding assets worth at least £3.6billion. The JWT study, Marketing to Muslims, comes as retailers and consumer goods manufacturers are stepping up efforts to woo Muslim customers. Nestlé, the world’s biggest producer of halal food, is investigating the UK market, Islamic banking is making headway, Boots is testing halal baby food, McDonalds is testing halal chicken burgers at its Southall store and Tesco is planning to bring £148m of Malaysian halal products to its UK stores. Further information - Click here Times 21.05.07
Small firms report greater confidence; more than three-quarters of smaller and medium-sized enterprises are confident about their own prospects over the next 12 months according to a survey undertaken by accountants KPMG. This surge in confidence has left respondents more upbeat than at any time since 2003, when the survey started. After a 14-point rise since the last count, 64 per cent also thought that prospects for firms turning over between £5m and £500m were good, the highest percentage since 2004. Further information - Click here Times 28.05.07
UK makes the Gulf a trade priority; the UK is placing trade with the Gulf on the same basis as India and China according to Andrew Cahn (pictured right), the chief executive of UK Trade & Investment. He was visiting Dubai to open a specialist trade hub to help British companies do business in the region, from Morocco to Iran. He said that UKTI was using Dubai as a hub because of its 100,000-plus expatriate community and British ties. Whilst much smaller than India and China, the Gulf had a growth rate of 15 per cent last year and was awash with liquidity from high oil prices. Education and medicine were areas of particular focus. The marketing drive was partly stimulated by increased competition in the health tourism sector. Cahn said that Harley Street had been the place where Gulf Arabs went for operations, but the UK had lost out to Germany, and there was increasing competition from India, Malaysia and Singapore. There have also been doubts as to whether the UK’s hospitals and universities would be able to compete with the more entrepreneurial American institutions. US universities, such as Cornell, have opened in Qatar, while the Sorbonne has opened in Abu Dhabi. Several British universities, including Herriott Watt and Middlesex have opened in Dubai. Imperial College has a diabetes centre in Abu Dhabi and a new training hospital is planned in Bahrain in conjunction with the Dublin-based Royal College of Surgeons. Financial Times 20.05.07
Birmingham considers subsidies for small shops; Birmingham City Council is considering subsidising retail space for independent shopkeepers through planning gain deals using Section 106. The City sees as a chance to promote entrepreneurialism and increase the diversity of the city’s shops. It would be piloted in the city centre but it could be rolled out to other areas if successful. Clive Dutton, the director of planning and regeneration, said that enticing more independent retailers to Birmingham would increase its vibrancy and distinctiveness, helping to attract visitors. “We could do this through section 106 agreements - it would be a trade off against other demands [on developers’ contributions]. We already have affordable housing and affordable workspace paid for by developers’ contributions and we will look to pilot affordable retail space”. Guy Rubin of the New Economics Foundation, which has published research on “clone towns” said: “We’ve been advocating the use of section 106 agreements to support and subsidise independent and locally owned shops since 2005”. Regeneration 18.05.07
France still main place for investment; the latest survey of overseas investment by British companies shows that central and eastern Europe are falling out of favour. Having made it to last year’s list of the top 12 recipients of actual UK deals (as opposed to the value) Poland, the Czech Republic and Hungary - have all failed to increase their share of UK investment over the last decade. Companies seeking a big reduction in manufacturing costs have leapt across central and eastern Europe to lower-cost economies in Asia. France remains the primary destination for outward investment, accounting for 23 per cent of projects going into Europe. This was more than double the share taken by Germany and Spain. Ernst and Young say that France dominates because of its consumer market and because of its proximity. It has only once been knocked off the top spot and that was by Ireland in 1998. Further information - Click here Financial Times 28.05.07
McDonald’s push for rewrite of McJob definition; the fast food chain McDonald’s has launched a campaign to persuade the Oxford English Dictionary to change their definition of “McJob” claiming that the term is insulting to the thousands of staff who work in the service sector. They have enlisted the support of an army of worthies as well as launching a public petition. They have also commissioned an opinion poll of 1,000 adults, which shows that more than two-thirds (69 per cent) agreed that the definition was out-of-date. There is also a Commons early day motion sponsored by Clive Betts (Labour MP for Sheffield Attercliffe), which regrets the use of derogatory phrases such as McJob. Amongst those who have signed the open letter are Sir Digby Jones, the government’s skills envoy, Kevin Hawkins, director general of the British retail Consortium, David Frost, director of the British Chambers of Commerce and John Blundell, director general of the Institute of Economic Affairs. Further information - Click here Guardian 24.05.07
Business reluctant to make skills pledge; a survey by the Chartered Institute for Personnel Development (CIPD) and KPMG of 1,000 representative employers shows that nearly 50 per cent are unlikely to sign the government’s voluntary skills pledge. Some 30 per cent were not convinced of the business case and 22 per cent cited lack of commitment from management. The main problem seems to be the costs involved in businesses agreeing to provide basic Level 2 skills training - the equivalent to five good GCSEs for struggling employees. Sir Digby Jones (pictured left), former director-general of the CBI, has been drafted in to be the Government’s “skills envoy” to encourage employer take-up but so far the only major signatories are the main government departments. The survey also showed widespread ignorance of another government flagship skills policy, the “Train to Gain” scheme which attempts to put employers together with training providers that can help improve the calibre of their workforce. Only 15 per cent of employers had direct experience of it, with 23 per cent saying that it did not satisfy their needs. Further information - Click here Financial Times 21.05.07
But training helps your firm to survive….; a study commissioned by the Sector Skills Development Agency finds that smaller companies that do not invest in staff training are more than twice as likely to go out of business than those that do. The survey of 2,000 companies with more than 10 employees, which was undertaken by the University of Kent, shows a failure rate of 27 per cent among businesses that did not train employees compared to 11 per cent for those that had a strong training programme. For manufacturing companies the ratio was starker, with a 50 per cent closure rate amongst those that did not train, compared to 20 per cent for those that did. Sir Digby Jones, the Government’s Envoy for Skills, said: “The evidence is clear that the cost of investing in higher-level skills is more than offset by business benefits to the bottom line”. Sir Digby is currently touring Britain in a “Skills for Business “roadshow. Further information - Click here Times 28.05.07
Asia threatens status of UK universities; Jan Figel (pictured left), the EU Commissioner for Education, has warned that British, French and German universities will be overtaken by those in China and India within a decade unless they improve quality and access. In an interview he says that Europe’s top universities would no longer dominate word rankings unless they modernised and received more funding. The concern, which is echoed by vice-chancellors and employers, is not only will British universities lose students to more attractive institutions abroad but also that business will follow them with jobs and investment. Britain is the second most popular destination for foreign students after the USA, with Oxford and Cambridge the only European universities in the top ten of both the Times Higher and the Shanghai Jiao Tong indices of the world’s leading universities. Europe has 200 of the top 500 universities but the US has 37 of the top 50. Figel believes that the European universities are in danger of being left behind particularly in science - a view that is echoed by Logica CMG, a British company that supports a third of the world’s satellites and employs 40,000 people. Times 21.05.07
School, college and university on one site; Cornwall is proposing a unique model for the future of education in the county. It has put forward proposals for two sites where a city academy would be built on the same site as an FE college and a university with teaching staff moving between them. The idea is particularly aimed at two areas of the county where there are problems with “neets”, teenagers who are not in education, employment or training after 16. This is prevalent in Newquay on the north coast and in the old tin-mining area round Camborne, Pool and Redruth. Guardian 22.05.07
Tories warm to city academies; a call for education providers and school sponsors to be able to set up national chains of city academies has been made by David Willettts (pictured right), the Shadow Conservative Education Secretary. Speaking shortly after Gordon Brown had reaffirmed Labour’s target for 400 academies Willetts called for the sponsorship requirement to be reduced from £2m. He also called for the Conservatives to drop their attachment to academic selection claiming that grammar schools are bastions of middle-class privilege. After a considerable backlash when the Tory faithful defended the role of grammar schools, David Cameron described the debate as pointless. Further information - Click here Financial Times 16.05.07, BBC News Online 16.05.07
Schools import Chinese teachers; the Specialist Schools and Academies Trust has signed a deal with the Chinese government for 200 teachers a year to come to the UK to teach Mandarin in schools. Pupil exchanges are also being arranged. The plan is for all of the country’s 250 specialist language schools to put Mandarin on the curriculum. At present around 4,000 students-most of them of Chinese origin- are studying GCSE Chinese. The plans were revealed by Sir Cyril Taylor, chairman of the Specialist Schools and Academies Trust, when he was speaking to the Commons Select Committee on Education. Sir Cyril also called for schools to use a lottery to determine admissions if oversubscribed. He also said that he would like to see “fair banding”- taking an equal number of pupils from each of several different ability bands. Brighton is the first local authority to plan to use a ballot but Sir Cyril said that the system was being used successfully by Haberdashers’ Askes’ Academy in Lewisham. Independent 24.05.07
However, do they want to import students? the Sunday Times says that private schools are imposing unofficial limits on the number of Chinese pupils they admit because of fears that British parents will be deterred from sending their pupils there. The number of pupils from Mainland China has risen from a few hundred in 2000 to 2,345 this year. When added to the pupils from Hong Kong the total rises to 8.652 - 40 per cent of all foreign students. There are just 1,888 German pupils, the next biggest foreign contingent. Some schools want to set a 10 per cent limit whilst others, such as Wellington will have an informal limit of 15-20 per cent and schools. Roedean, where Chinese pupils comprise a third of the sixth form, with another third coming from other foreign countries does intend to have a limit. Sunday Times 27.05.07
Ofsted criticises vocational teaching; schools are failing to teach vocational courses that could encourage students to stay on after 16 because they are focused on bolstering their position in the GCSE league tables says a report from Ofsted, the education watchdog. A third of schools also discourage their brightest students from taking vocational qualifications because they are viewed by too many schools and parents as "relevant only to those who underachieve”. Those students that did study work-related courses were often barred from taking options available to more academic teenagers, such as foreign languages. However the survey of 155 schools found that overall work-related courses led to marked improvements in standards, behaviour and attendance from students who were at risk of being permanently put off education. Further information - Click here Financial Times 26.05.07
BP pulls out from carbon capture trial; BP has abandoned plans for the development of a “green” power plant at Peterhead in Scotland following the publication of last week’s publication of the white paper on energy. It had been expected that the government would have launched to build carbon capture plant with subsidies going to the winner but there has been no specific allocation of funds for subsidies the power companies argue that they will not be able to compete against their dirtier rivals. At present there are five ongoing clean coal technology developments in the UK including the newly reopened Hatfield Colliery. Three of these incorporate carbon capture and storage (CCS) systems that many politicians and environmentalists regard as the biggest weapon against climate change. CCS could, in theory, eliminate 90 per cent of energy producers’ contributions to climate change. A spokesman for the Department of Trade and Industry said that the government still believed it was on track to be the first country to build a fully green power plant, despite rival projects in Norway, Australia and California. Further information - Click here Independent 25.05.07
Leading banks to provide energy loans to cities; five of the world’s major banks have launched a $5bn fund to speed up energy efficiency programmes in 15 world capitals. As a result London, Chicago, Sao Paulo and other centres will be able to slash carbon dioxide emissions. It is hoped that the project will enable the cities to use their combined purchasing power to bring economies of scale. The energy efficiency fund, which was brokered by Bill Clinton, will make loans on commercial rates and includes ABN Amro, Citibank, Deutsche Bank, JP Morgan and UBS. Ken Livingstone said that he would call for tenders to refit City Hall and other GLA buildings with insulation, more efficient air conditioning and green energy capability. It is also hoped to give Scotland Yard a green makeover. Further information - Click here Observer 26.05.07
Business presses the Met on crime; members of the London Business Advisory Group have met senior officers of the Metropolitan Police to urge a stepping up in efforts to tackle the increasing crime against businesses. Many of the capital’s biggest companies say that offences against them, from shoplifting to large theft and fraud, are being ignored because they are viewed as victimless crimes. The Business Advisory Group, which comprises the CBI, the London Chamber of Commerce and London First, called for the collection of data specifically on business crime as well as greater collaboration between police and business at a local level. As part on an ongoing programme the Met recently seconded a chief inspector to the human resources department of HSBC and 100 officers are being mentored by companies such as Ernst & Young, Allied Domecq, Arup, Allen & Overy, Kroll and Herbert Smith. Further information - Click here Financial Times 21.05.07
Metronet cuts 290 jobs; Metronet, one of the two companies charged with upgrading the London Underground, has announced that it is to cut 290 jobs from its 5,000-strong workforce as part of a cost-cutting exercise. It is facing a cost overspend of about £1bn on its public private partnership contract with London Underground and is under pressure to cut costs. The station upgrade programme has run over its budget and is at the root of the overspending issue threatening Metronet’s finances. Metronet, which is responsible for three-quarters of the tube network, wants the programme scaled down but TfL is refusing to reduce any specifications for any work, citing growing demand for travel on the ageing line. Guardian 24.05.07
Tehran adopts London buses for sightseeing tours; from 24th May, a fleet of red-painted London-style buses will provide sightseeing tours around Tehran city centre. Initially they will be in single-decker coaches but old double-deckers buses that have been out of service for decades are being converted into open top tourist buses. Guardian 19.05.07
Government relents over Woolwich station; the Department of Transport has completed a U-turn over its opposition to a station at Woolwich as part of the Crossrail project. A deal has been struck with Berkeley Homes to build the station without adding to the costs of Crossrail. The Department for Transport had been ruling out a station because of the anticipated costs of £200m-£250m despite support from the Crossrail Select Committee, local councils and businesses. Rail 23.05.07
Greenwich could face double blow; following on the heavy fire damage suffered by the Cutty Sark, Greenwich may face a second blow to one of its national treasures. A Henry Moore statue, Large Standing Figure: Knife Edge, has stood in Greenwich Park for nearly 30 years after the site, ironically overlooking the Cutty Sark, was personally chosen by the sculpture. The Henry Moore Foundation has now reclaimed the sculpture, apparently because it is worried about graffiti on the statue. However the Foundation said that after restoration the statue will go to a Henry Moore exhibition at Kew from September until March 2008 and then return to Greenwich. Further information - Click here Times 28.05.07
London’s rise alerts New York; the FT says that the news that Merrill Lynch has handed additional power to London-based executives is a further sign of the power shift from New York to London. The move follows those of Lehman Brothers who have switched the head of its powerful fixed income division to London and Goldman Sachs who have placed their chief administrative officer in the City. More than half of the top 21 managers in Citigroup’s new fixed income, commodities and currencies division is to be based outside New York. Bear Stearns is one of the few Wall Street banks that do not have global business heads based outside New York. Whilst much of the attention in New York has been on London’s lighter touch regulation the FT says that there are other reasons for the shift and, in particular, the growth in revenue from Europe and Asia compared to that of the Americas. Dick Bove, an analyst at Punk, Ziegel, says that capital markets are growing faster outside the US; wealthy Middle Eastern investors are using non-US markets in ways that they could not in the oil boom of the 1970s; and regulations in London are lighter. Markets thrive on liquidity. The shifts are creating greater liquidity in a wider array of instruments in London. If the US brokers want the business, they must go where the money is going. Financial Times 26.05.07
‘The Cheese Grater’ gets the go ahead; British Land have decided to go ahead with the construction of 47-storey City office block officially known at the Leadenhall Building but better known as the Cheese Grater. The 736ft building, which has been designed by Sir Richard Rogers, is located between the Lloyds of London building and Sir Norman Fosters Gherkin building. The new building will not be ready until 2011. Commenting on the announcement Marcus Binney says “the building of the Gherkin, which gave the Square Mile a landmark that almost everybody instantly warms to, which adds interest to the skyline from almost every viewpoint and shows the value of giving licence to a leading architect. The Cheese Grater should look equally dramatic, as the Rogers practice’s latest City buildings have brought a new lightness and transparency to the design of office blocks. Renzo Piano’s Spike on the South Bank is likely to have a still more ethereal quality, although it may intrude uncomfortably on the Tower of London”. Further information - Click here Times 23.05.07
Crown buys up major Mayfair block; the Crown Estate has beaten off 14 other bidders to acquire four inter-connecting buildings in New Burlington Street and New Burlington Place between Regent Street and Savile Row. Apart from Fortress House on Savile Row and a strip of buildings owned by Pollen Estate they now own the entire block coming back from Mitre House in Regent Street. Talks have opened with Pollen Estates for a possible joint venture, which would create one of Regent Street’s biggest mixed-use developments along the lines of 229-247 Regent Street, which includes the flagship Apple Store. Estates Gazette 26.05.07
Judge finds in favour of King’s Cross redevelopment; a last-minute legal attempt by local protestors to block the regeneration of King’s Cross has been quashed by a judgment in the High Court. Argent, the property developer, has been working up plans for a 67-acre site to the north of King’s Cross station since it was hired by landowners London & Continental Railways and Excel. The scheme, King’s Cross Central, is one of the biggest regeneration projects in London with plans for 1,946 flats, 4.5m sq ft of offices and 500,000 sq ft of shops. Argent won outline planning permission in March 2006 and more detailed permission in November. However the King’s Cross Railway Lands Group (KCRLG) won a judicial review to examine whether members of Camden’s planning committee were wrongly advised when they voted for the scheme. Earlier this year the protestors, who claim that there is insufficient social housing and that the scheme could be more “green”, won the judicial review with the consequence that Argent had to stop work. However Mr Justice Sullivan ruled that: “The legal advice given to Camden Council committee about its consent was clear and entirely correct”. KCRLG have been given 14 days to consider an appeal. If successful, the project will transform the King’s Cross area. St Pancras, the Victorian station next door to King’s Cross, is being upgraded and will become the terminal for the new Channel Tunnel train service to Paris and Brussels in November. The University of the Arts and the Guardian are amongst organisations that have committed to moving to King’s Cross. Further information - Click here for King's Cross and here for St Pancras Financial Times 28.05.07
Heron bid for Barbican tower is turned down; the City of London’s planning committee has rejected an application from Heron International to build a 36-storey residential tower at Milton Court on the edge of the Barbican. They referred the £100m scheme back to the developer for “redesign considerations” after councillors criticised it for being too big sand unattractive. They stopped short of rejecting it entirely as most councillors supported the £40m extension to the Guildhall School of Music that would form part of the scheme. Local residents also voiced objections as being “overly large, unduly prominent and, in all material respects, out of keeping with the existing residential accommodation”. Estates Gazette 19.05.07
Narrower viewing corridors agreed by Government; the Government Office for London has agreed to the Mayor’s proposals that that the viewing corridors that control the construction of tall buildings within sight lines of St Paul’s cathedral and the House of Commons should be narrowed. The change, which will come into force on 13th July is likely to facilitate the development proposals for Bucklersbury House and for Broadgate. Legal & General are planning a 970,000 sq ft redevelopment of the Buckersbury House site to be renamed as Walbrook Square, whilst British Land plan to replace some of the existing buildings at Broadgate with taller office blocks. Estates Gazette 19.05.07
Will the Elephant & Castle be delayed again? the Estates Gazette (EG) ponders on the announcement by Southwark that the name of the preferred developer for the long-awaited redevelopment of the Elephant abd Castle has been put back a month to July. They say that they wonder if this means July 2007 or another year. The EG had already revealed in March that Transport for London had been slowing the process down by asking questions about the proposals to remove the area’s southern roundabout and northern gyratory system. At that time Southwark denied the report saying the delay was down to the fact that the rival bids from St Modwen and Lend Lease were both so excellent. However on 24th April the Elephant and Castle regeneration team issued a statement about the situation. “Southwark council is pressing TfL for the earliest possible formal sign-off of plans so work can commence on the removal of the much-hated subways”. Estates Gazette 19.05.07
Tottenham to gain £400m 12-acre village; Haringey Council has given planning permission for the largest development in Tottenham for 20 years. The £400m Hale Village development is to be built on a former depot in Ferry Lane and will comprise 1,210 homes, 700 student bedrooms, 54,000 sq ft of shops, cafes and restaurants, a 100-bed hotel, a primary school, a medical centre and 34,500 sq ft of offices for Newlon Housing Trust’s new head office. There are discussions taking place about a further 900 homes and there are later plans for two further sites next to the main development. The developer is Lea Valley Estates and the architect is BDP. Michael Polledri, chairman of Lea Valley Estates, said: “Hale Village will be the catalyst for the regeneration of Tottenham Hale. This are is a hidden gem”. Estates Gazette 26.05.07
Mystery buyer for US Navy’s headquarters in Mayfair; a mystery UK consortium with residential expertise is buying the US Navy’s HQ in Mayfair. It is believed to have paid £250m for the site at 20-21 Grosvenor Square, outbidding a consortium led by Christian Candy’s CPC and the Sellar Property Group. The price, far above some agents’ expectations of £100m, reflects exit values of £3,000 per sq ft - around £1,000 per sq ft higher than prevailing Mayfair values. The square is also home to the US embassy, which has appointed agents to advise it on a relocation from the 225,000 sq ft building. Estates Gazette 26.05.07
grapevine is produced twice monthly (except in August and December when there
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Next issue on 14th June 2007
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