The State of Britain

Staff Writer

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Brexit worries and transport problems persist in the capital, evidence that more Britons permanently leave London than arrive and at last Spurs go home.

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Unemployment in London fell sharply by 22,000 to 207,000 between November and January; the drop of 0.2% took the overall rate to 4.2%. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside had the lowest and highest unemployment rate in the country respectively. The UK unemployment rate stands at 3.9%.

In March average earnings in London increased significantly to a £846 per week the UK’s highest whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

London property prices fell by 0.3% to £472,230 during the month which meant the capital has seen a price drop of 1.6% over the year – the biggest fall in the UK. In comparison UK prices dropped by 0.8% during March which cut the annual growth rate to 1.7%. The London market was also slower with the latest figures to September 2018 showing volumes down by 2.8%.

Whilst strike action – on London Trams – never helps economic growth, more significant worries continue over the impact of Brexit. A report by capital markets think tank New Financial says £900bn in financial firms’ assets have been moved out of the UK; this has cost the economy £3bn-£4bn and will likely mean 5,000 staff move, with Dublin benefiting most. The think tank anticipates a 10% shift in banking and finance transactions which would reduce income from tax receipts by about 1%. Dublin won 100 relocations, Luxembourg 60, Paris 41 Frankfurt 40 and Amsterdam 32. It highlighted one bright spot though in that arrangements between regulators in the EU and the UK meant the industry was well prepared for whatever form Brexit took. It estimates the £900bn is broken down into banks moving c£800bn in assets, asset managers c£65bn and insurance companies c£35bn. Brexit is also blamed on a drop in optimism – at the fastest rate since the financial crisis – in London’s financial services industry. The latest quarterly survey from the CBI and PwC – of 84 City firms – said only 10% were optimistic compared with 53% less optimistic.

Of course in UK terms London has a successful economy and compares favourably with other international cities when it comes to economic growth; with expansion of about a fifth over the last decade. Consequently the population of Greater London has grown by 1.1m over this period to 10m. Despite this about 550,000 more Britons left London than moved to it with population growth being driven by the birth rate outstripping the death rate by 790,000 and by international immigration increasing by 860,000; by 2017, 3.6m people living in the capital were born overseas. Most Britons who leave tend to have young families but many stay within commuting distance.

On developments in the capital, Phase 2 of the £1bn Northumberland Development Project – part of Haringey Council’s wider regeneration of Tottenham – completed in March. The development which centres on the building of the new Tottenham Hotspur Stadium also includes 585 new homes, a 180-room hotel and a local community health centre as well as shops and the Spurs HQ and a museum. The stadium has a capacity for 62,062 spectators and is designed to host football and NFL games.

On London transport, the uLEZ or Ultra Low Emission Zone will be introduced from next month; older more polluting vehicles will have to pay to enter the congestion charging zone. The zone will operate 24 hours a day, 7 days a week, every day of the year within the same area of central London as the Congestion Charge. Most vehicles, including cars and vans, need to meet the ULEZ emissions standards or their drivers must pay a £12.50 daily charge to drive within the zone. Tfl hopes to raise £305m from the charges which will go some way to reducing its c£1bn budget deficit. The operating deficit is now forecast to have halved to £500m by the end of 2018/19. The shortfall is down to a cut to the government grant, London Mayor Sadiq Khan’s partial fare freeze, a fall in passenger numbers and the delay to Crossrail. The number of bus passengers continues to decline which means the operating deficit on buses will be £722m; the highest bus subsidy in TfL’s history. Tube passenger numbers have increased by 0.8% but because of the fares freeze income has more or less flatlined. Total forecast income for 2018/19 is £6.66bn, lower than £6.7bn (2015) and £6.76bn (2016). Cycling journeys in central London are at record levels.

Locations have been shortlisted to become one of four off-site logistics hubs for the Heathrow Airport expansion. There were initially 121 applications for the hubs which were reduced to 65. After visits by Heathrow officials the list was further reduced to 18. The winners will be announced early next year with work due to start in 2021. The third runway could be completed by 2026. The hubs will preassemble components for the new developments that will accompany the third runway before transporting them to Heathrow – with the aim of streamlining the construction and minimising the disruption to the airport.

Flybe has announced plans for the first flights between the Isle of Man and London Heathrow since 2002. The airline is to operate a daily service from 21 April using a 78-seat Bombardier Q400 aircraft. At Stansted and Gatwick Wow, Air has stopped flying. The Icelandic airline said it had initially cancelled some flights while completing an agreement with a group of investors over raising new funds but later said all future flights were cancelled.

Finally the Tate Modern has overtaken the British Museum as the top UK visitor attraction for the first time in a decade; Tate Modern’s hit shows in 2018 included a major Picasso exhibition. Almost 5.9m people visited the Tate Modern last year versus the 5.8m who went to the British Museum.

The South East continued to prepare for a Brexit which never came, missed the worst of Storm Gareth and wondered whether there will be enough water to drink in the future.

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Unemployment in the South East fell sharply by 12,000 to 149,000 between November and January; the drop of 0.3% to 3.1% was one of the best in the UK. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside had the lowest and highest unemployment rate in the country respectively. The UK unemployment rate stands at 3.9%.

In March average earnings in the South East dropped slightly to £685 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

South East average property prices fell by 0.5% to £321,174 during the month which meant annual growth was an anaemic 0.1%. In comparison UK prices dropped by 0.8% during March which cut the annual growth rate to 1.7%. The South East market was also slower with the latest figures to September 2018 showing volumes down by 3.5%.

Funding for the Port of Ramsgate – which was at the centre of a row over a no-deal-Brexit ferry contract – was axed by Thanet District Council which said it would no longer keep the port ‘ferry-ready’. In December the government gave Seaborne Freight a £13.8m contract to run a service to Ostend, Belgium, to offset delays in the case of a no-deal Brexit, but later the Seaborne contract was cancelled. The Government is now facing legal action from Eurotunnel, which said the contracts awarded to Seaborne and two other ferry companies were handed out in a secretive way. Residents of Kent looked across the Channel at what might come their way as traffic jams built up around Calais as French customs officers worked to rule, carrying out tighter checks on lorries heading for the Channel Tunnel and the ferry port.

In comparison with other parts of the UK the South East got off lightly, but some economic damage was caused by Storm Gareth, for example 60 tonnes of mud and trees hit the track at Wadhurst blocking the line between the East Sussex coast, Kent and London.

Within 25 years the South East of England will not have enough water to meet demand, the head of the Environment Agency warned. Water transfers between regions – from areas of water surplus to areas of deficit – will be needed. The economic case for greater resilience was clear he said, citing a 2016 Environment Agency report that found a severe drought would cost each household more than £100 but that the cost per household of the required investment that would reduce the risk was only £4 a year.

On regional infrastructure, the Government has sought to improve transport and economic development around the Thames Estuary which – despite its proximity to London – has relatively low economic growth and high unemployment. A new Thames Estuary Growth Board will be established and £4.85m has been allocated to develop proposals for improved transport services between Abbey Wood and Ebbsfleet. In Berkshire, £20m of funding earmarked for a Mass Rapid Transit route between Reading and Wokingham will be redeployed elsewhere after plans were scrapped. One new project could be a new £4m bridge in Barkham, Wokingham, to ease congestion, plus a park and ride in the town.

A nuclear fusion project in Oxfordshire has received £92.1m of EU funding, securing its future. The Joint European Torus (Jet) in Culham is home to the world’s largest fusion reactor and has more than 500 staff. Scientists from across the EU use the reactor for experiments on potential carbon-free fusion energy. The Department for Business said the funding guarantees its future until the end of 2020 regardless of Brexit. The EU covers 88% of the running costs but the centre now has enough funding for at least two years.

The University of Surrey has offered voluntary redundancy to all staff as it seeks to make £15m of cuts. Staffing levels will be reduced and £5m could be saved by not filling existing vacancies. A fall in its national league table position has not helped, reflecting the problems faced by many midsized universities which need to maintain investment in order to continue to attract students who now – due to tuition fees – demand more for their money.

Primark plans to move 220 jobs from its head office in Reading to the company’s international headquarters in Dublin. The firm is moving its buying, merchandising, design, quality and sourcing operations to Ireland from September; employees affected by the changes will have the opportunity to work in Dublin. A number of core functions will continue to be based in Reading. TK Maxx will be opening at The Lexicon in Bracknell next month; 40 new jobs will be created.

Developments in the energy and film sectors, local governance issues and the UK’s first new town seeks to innovate again

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Unemployment in the East of England increased by 12,000 to 103,000 between November and January; the hike of 0.3% to 3.2% was the second highest in the UK but the overall rate remains low. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside had the lowest and highest unemployment rate in the country respectively. The UK unemployment rate stands at 3.9%.

In March average earnings in the East of England increased to £656 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

East of England average property prices fell by 1% to £288,494 during the month which meant prices have fallen by 0.2% over the year. In comparison UK prices dropped by 0.8% during March which cut the annual growth rate to 1.7%. The East of England market was also slower with the latest figures to September 2018 showing volumes down by 2.8%.

Great Yarmouth company, SeaJacks UK, has lost its contract to help build a giant windfarm off the Norfolk coast. The firm won the contract from ScottishPower Renewables two years ago but construction delays have meant a Dutch firm is now the main contractor; 75 skilled jobs and five apprenticeships would have been created. SeaJacks hopes to pick up other work on the project. Plans for EDF Energy’s £16bn Sizewell C nuclear plant – at Leiston, Suffolk, adjacent to the existing Sizewell B – are not detailed enough say Suffolk County Council and Suffolk Coastal District Council although they support the plant in principle.

Screen Suffolk is working to secure filming of a big-budget Marvel action movie at an undisclosed location later in the year. The agency has generated £3.8m for Suffolk over 2 years. It is estimated an average filming day brings £11,500 of spending on hotels, food, drink and other services in the location area. For example during five days of shooting, Armando Iannucci’s film The Personal History of David Copperfield – in Bury St Edmunds – saw £82,000 spent by the crew.

A £350m regeneration of Stevenage town centre – that includes new shops, bars, restaurants, 600 homes, a park and a council building – influenced by successful European cities is expected to go to planning within a year. The SG1 project on the western side of the town centre will take up to eight years to complete in phases; work could begin in 2020. Given Stevenage was the UK’s first pedestrianised town centre, could something as equally revolutionary be achieved?

In Bedfordshire, plans to develop land next to junction 10 of the M1 to partially fund Luton Town’s new stadium have been approved. The scheme at Newlands Park involves new bars, restaurants, a 1,800-capacity live venue, a hotel and car park, and 550 apartments. In Norwich a £250m redevelopment of a shopping complex, including 1,250 new homes has been called in by the Government putting in doubt the £12.2m already allocated under the Housing Infrastructure Fund. Plans for the tower block of apartments, a cinema, hotel and shops at 1960s-built Anglia Square in Norwich were approved by the city council in December.

On East of England transport, a feasibility study commissioned by the Cambridgeshire & Peterborough Combined Authority claims a £4bn metro system -the Cambridgeshire Autonomous Metro – for Greater Cambridge could create 100,000 jobs and 60,000 new homes. The metro would cover 88 miles of which 7.5 miles would be underground in Cambridge. The system would use electric vehicles – at a maximum speed of 55mph – capable of crossing the city in under 12 minutes. The metro would connect the city to regional towns like St Neots, Huntingdon and St Ives. On the main rail network, Cambridgeshire County Council has backed Route A – that would run through Bassingbourn and Sandy both with new stations – in the East West Rail link consultation; the cheapest route with the lowest journey times between Oxford and Cambridge.

A private health trust is to close with the loss of 280 jobs. All Hallows Healthcare cares for more than 250 people at its sites in Lowestoft in Suffolk and Ditchingham in Norfolk. The Trust runs a 30-bed hospital, a 50-bed nursing home, at-home care services and daycare at the hospital but is no longer viable, stating that capped funding, lost contracts and the need for retendering had depleted its reserves. A luxury lodge firm – 121 Dream Lodge Group – that went into administration in January has been bought by Exclusive Luxury Lodges Ltd. Eighty of the staff who worked at eight parks across England were made redundant but now about 40 jobs have been saved.

To East of England governance and Suffolk has the largest ‘district’ council in the UK. The country’s largest non-metropolitan district council – by population – is now operational. East Suffolk District merged Suffolk Coastal and Waveney district councils and will serve 246,913 people. Suffolk Coastal and Waveney have operated an integrated workforce since 2010 and have saved £16m. A second new authority, West Suffolk, has merged St Edmundsbury and Forest Heath councils and will cater for 179,248. Despite these mergers Suffolk – unlike other parts of England which have successfully moved to unitary or combined authority models – still has a two-tier system; the top tier is the county council which provides services such as highways maintenance, schools, social services and libraries. The second tier now has five district councils instead of seven, which are responsible for services such as refuse collections, housing, planning permission and parks and leisure.

An independent inquiry is to be held into how King’s Lynn & West Norfolk Borough Council failed to recover a £2.75m loan from enterprise firm Norfolk & Waveney Enterprise Services. The firm borrowed from the district council to help build the Klic business start-up hub in King’s Lynn which has since been repossessed.

SW unemployment the lowest in the UK, the abolition of tolls increases economic activity around the Severn and the road to nowhere likely to be completed after 40 years

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Unemployment in the South West edged up by 2,000 to 84,000 between November and January; not enough to move the rate from 2.9% – the best in the UK. At 5.2% Yorkshire and the Humber had the highest. The UK unemployment rate stands at 3.9%.

In March average earnings in the South West increased to £585 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

South West average property prices fell by 1.4% to £253,926 during the month which trimmed the annual growth rate to 0.5%. In comparison UK prices dropped by 0.8% during March which cut the annual growth rate to 1.7%. The South West market was also slower with the latest figures to September 2018 showing volumes down by 3%.

At 2.9% the region saw the lowest unemployment in the UK but the closure of Honda’s Swindon plant coupled with jobs losses in the Cornish food processing industry cast a shadow over this achievement.

It was fitting that 50 years after the technologically advanced Bristol built Concorde first made its test flight, the city should welcome modern innovation with the announcement that Channel 4 is likely to locate its new Creative Hub at Finzels Reach on Bristol’s new waterfront quarter. The firm will lease 3,200 sq ft of space on the second floor of the Fermentation Buildings. There was less positive news from Cornwall where it was confirmed Samworth Brothers owned Kensey Foods in Launceston – which makes premium deserts – will close in July; 650 jobs at the site will go. Cornish food processing company St Merryn Meats – which makes chilled meat products such as burgers – is also under the threat of closure, with the potential loss of 173 jobs. Axminster’s largest town centre shop – Trinity House – is to close with the loss of 19 jobs. The department store is expected to cease trading in September. Better news for Bracknell town centre, a further £30m will be spent on the next stage of regeneration. Bracknell Forest Council’s announcement follows the completion of the £240m Lexicon centre and will include redeveloping the old Bentalls site into a covered space which will be linked to a remodelled Princess Square.

On regional economic development, Visit Cornwall expects continued expansion in the tourist sector, growing the economy by £521m and creating up to 8,000 jobs; it noted demand from the US market was particularly strong with enhanced interest also from Australia – the Poldark effect. The agency says Cornwall has about 4.5 million visitors a year generating £1.5bn. The 2020 Tour of Britain will begin with a 105-mile first stage in Cornwall. The UK’s flagship professional cycle race will see 120 riders start in Penzance and finish in Bodmin with organisers hoping for 180,000 spectators adding more than £3m to the local economy.

A key regional infrastructure project will likely get underway this summer when work begins on a £100m flood defence project along the Severn estuary. Reinforced concrete sea walls up to 2.4 metres high and raised earth embankments will be built along the coast from Avonmouth to Severnside. The debate over the trade off between toll charges and economic activity continues after figures from Highways England showed use of the M4 Severn crossing into Wales had increased 10% since tolls were abolished on 17 December. The figures showed 32,420 vehicles used the crossing every day in January and 35,457 in February compared with 28,897 and 31,866 for the same period in 2018. Toll charges were cars £5.60 and HGVs £16.70; the eastbound crossing was free. The charges were first levied on opening in 1966. HMG forecasts suggest that by 2022 more than 24m vehicles pa would use the crossings westbound, compared with 18m if the tolls had stayed in place.

Other infrastructure projects that moved forward this month include plans for two bypasses north of Bristol. The West of England Combined Authority (‘Weca’) has approved £200,000 to fund a feasibility study on linking Coalpit Heath with Westerleigh and Frampton Cotterell with Winterbourne. The Coalpit Heath to Westerleigh study would include ‘the road to nowhere’ in Yate, an unfinished stretch of dual carriageway which was abandoned after partial completion in the 1970s and is now only used as a film location. In Somerset, Watchet won £5m from HMG’s Coastal Communities Fund to upgrade the harbour; an art gallery, workshops, restaurant and marina facilities will be developed.

Regional transport developments included a new four times daily service from Newquay Airport to Heathrow. Flybe will use 78-seater turboprop planes and will received a £3.4m subsidy or about £5 per passenger over the four year deal; it is the only taxpayer subsidised route into Heathrow. On rail, talks on expanding the MetroWest line 30 miles beyond Yate to Gloucester continue. The MetroWest project aims to improve suburban train services into Bristol. The railway project will see the reopening of the Portishead line to passenger trains. In February, North Somerset Council allocated £15m to the Portishead-line section of the project and approved £11.7m over two years to develop a full business case leaving a £31m shortfall. The MetroWest railway expansion plans also include building new railway stations in Henbury, North Filton and Ashley Down. Weca has also approved £300,000 to conduct a feasibility study into reopening Charfield station. On the seas, the first of 20 new weekly cross-Channel ferry crossings has begun as part of a £46.6m taxpayer-funded no-deal Brexit contract; the delay to Brexit was too late for Brittany Ferries to cancel the sailings. The new crossings are from Brittany Ferries’ Portsmouth-Le Harve, Poole-Cherbourg and Plymouth-Roscoff routes.

Two new unitary authorities have begun operating in Dorset after nine previous councils were merged. Dorset Council and Bournemouth, Christchurch and Poole (BCP) Council said 450 jobs would be lost and £108m would be saved over six years. Also the former Dorset County, East Dorset, North Dorset, Purbeck, Weymouth & Portland and West Dorset councils will form the new Dorset Council. The anticipated operating efficiencies appear achievable, in the ten years since Cornwall switched to a unitary authority – replacing one county council and six district and borough councils – actual savings have been underestimated.

The North West leads the fall in UK unemployment, sees the establishment of the first deep coal mine for decades move a step closer, and at last the bollards begin to disappear on the M6 between Crewe and Knutsford.

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Unemployment in the North West fell sharply by 19,000 to 131,000 between November and January; the drop of 0.5% to 3.6% was the best in the UK. At 2.9% and 5.2% the SW of England and Yorkshire and the Humber had the lowest and highest unemployment rate in the country respectively. The UK unemployment rate stands at 3.9%.

In March average earnings in the North West increased to £564 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation.

North West average property prices fell by 1.3% to £160,811 during the month which trimmed the annual growth rate to 3.4%. In comparison UK prices dropped by 0.8% to £228,147 during March which cut the annual growth rate to 1.7%. The North West market was also slower with the latest figures to September 2018 showing volumes down by 2.7%.

The extent to which the North West’s economy was impacted by March’s weather – with severe gales and heavy rain brought by Storm Gareth – remains to be seen. The storm caused flooded train lines, flooded roads and disruption to ferry services from Heysham.

Despite the weather some regional bright spots included the potential first deep coal mine in the UK for decades after councillors backed the plans of The West Cumbria Mining Company. The firm wants to extract coking coal from the seabed off St Bees, with a processing plant on the former Marchon site at Kells – the new Woodhouse Colliery could create 500 jobs. The coking coal – potentially up to 750m tonnes in a 75 sq mile area around the colliery – is needed to produce steel. The futuristic looking mine would replace the Haig Pit in Whitehaven which was shut in 1986 with the loss of 3,500 jobs. More immediate regional job creation will come with roles in on board crew and ticket office staff as one hundred seasonal vacancies are created at Windermere Lake Cruises. Essar Oil’s plans to decommission the Shell Higher Olefins Plant in Ellesmere Port has threatened the jobs of 184 workers at the Stanlow site – staff are to be balloted on whether they wish to take industrial action.

One of the region’s most high profile infrastructure projects is nearing completion. The £265m project to upgrade the M6 to a smart motorway between Crewe and Knutsford, has seen a fourth lane been built in each direction with new signage, traffic sensors and CCTV cameras to help tackle congestion for the 120,000 drivers who use it each day. According to Highways England it is the biggest upgrade to the M6 since it opened in Cheshire about 60 years ago. But drivers should not expect to wave goodbye to the bollards anytime soon as the upgrade on the 19-mile stretch is only the first of four smart motorway schemes to be finished. The Agency aims to increase the M6’s capacity by a third on 60 miles of motorway between Coventry and Wigan. On a smaller scale, the administration of construction company Dawnus halted work on the £15m Manchester-Salford Inner Relief Route improvement scheme, forcing Manchester and Salford City Councils to put in place contingency plans.

Notable regional transport developments included the Stobart Group’s laudable but tortuous attempt to offer scheduled passenger flights from Carlisle (now Carlisle Lake District) Airport for the first time in more than 25 years. Loganair will operate routes to Dublin, Belfast and London Southend from 4 July. The airport received a £4.75m public subsidy via Cumbria’s LEP to upgrade its terminal and runway in 2017 but had difficulty recruiting air traffic control staff and was unable to launch services in June 2018. On the railways, Northern’s plans to bring in 10 services a day between Barrow and Manchester airport have been delayed. The firm will instead run six services until late spring. Extra hourly services linking Manchester to Northwich, Knutsford and Mobberley which were due to begin in May 2018 have also been postponed. A £4m project to try to reduce the risk of landslides which closed the Cumbria Coast railway line last November is underway – 50,000 tonnes of earth are being shifted. The campaign to reopen Fleetwood’s station suffered a setback this month as a feasibility study into the issue was rejected by Wyre Council and £50,000 of funding for the study from Lancashire County Council was also refused.

Key developments in the North West met with varying degrees of success this month with plans for a £100m upgrade of Chester Racecourse being rejected after councillors decided the project could harm views of the historic city. The scheme included a new six-storey grandstand, a 1,000-seat conference venue and multi-storey car park. Regional wins out of the Government’s Coastal Communities Fund include £2.35m towards a £5.55m project to create visitor attractions along Morecambe Bay. Given the ‘publicity’ Morecambe has received following ITV’s drama The Bay, the award will be welcomed warmly. Other successful projects were £3.64m for The Beacon Arts Village to modernise a disused Victorian town hall in Hoylake and £772,000 awarded for a £1.22m scheme to link the economies of Cleveleys and Fleetwood. One of the North West’s flagship tourist developments got a further £1.75m to add to the £4m pledged by the Government last year; Blackpool Museum – set to open in 2020 – will be located on the Golden Mile in the former Sands Venue and will showcase the resort’s history. It is hoped 300,000 visitors a year will be pulled in.

Economic development and regeneration in Cumbria will continue to be overseen by the district councils, county council, Cumbria LEP and the Northern Powerhouse after plans to create a unitary authority which would merge Allerdale, Carlisle, Copeland, Barrow, Eden and South Lakeland district councils with the Cumbria County Council were scrapped. Unanimity amongst the seven councils could not be found so efforts are now focusing on a combined authority such as Greater Manchester or Liverpool Region which would mean the end of Cumbria County Council and the devolution of its services to the districts.