The State of Britain

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

Reading Time: 4 minutes

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.