“Today’s LDN comes to you as the dust has barely begun to settle on the Autumn Statement. The Chancellor, Jeremy Hunt, ended up delivering a more detailed statement than perhaps many expected. Buoyed by slightly better financial circumstances than many predicted, the Government found themselves with more wriggle room than for many years. With an election on the horizon, the Chancellor argues this has afforded the Government the luxury of cutting taxes, being generous with benefits and spending more on supporting investment and growth.
The headline grabber will be the 2p off the National Insurance rate but as many have pointed out, one of the reasons the Treasury has more cash is that freezing income tax thresholds combined with real wages on the rise has pushed many more people into higher tax bands – the delightfully named ‘fiscal drag’. In essence, income tax rises are funding a NI cut.
As is usually the case with all financial statements, it takes a while for the devil to be dug out of the detail – how many tough decisions have been punted beyond the General Election? The Office for Budget Responsibility analysis has already flagged that the country faces the largest reduction in real living standard since record began, government departments face a squeeze on spending, and the tax burden will still rise every year to a post war high by 2028/29.
Hunt majored on 110 specific measures to boost business investment and growth, which ranged across skills, small businesses, R&D, levelling up, business and personal taxes. Housing and planning gained some attention, with extra money for local authority housebuilding, changes to planning fees and more investment zones across the country (but not in London). On the subject of London, the boroughs will be relieved that housing allowance is being unfrozen and a lump of transport money is destined for Thamesmead to help unlock housing. But there wasn’t much more than that.
While the Tories might have been buoyed by the Labour leader’s recent difficulties within his own ranks over the situation in the Middle East, there’s not been much solace from the polls, which continue to make for miserable reading. Today’s Statement presented (yet) another set piece moment when the Government sought to regain the political initiative. But this is the latest attempt and follows hot on the heels of (since the summer, in chronological order…) watering down a slug of green policies, Tory Party conference, cancelling the HS2 extension to Manchester, the King’s Speech and a reshuffle. So far, all have failed to register in the polls. Dangling tax cuts in front of voters is a more Politics 101 approach, but could yet revive the Government’s fortunes.”
Nick Bowes, Managing Director, Insight
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TREASURE HUNT: Just after 12:30pm today, Chancellor Jeremy Hunt stood up in the Commons to deliver the Autumn Statement.
Early Christmas presents: Better finances than expected allowed some goodies to be unwrapped - state pensions to rise by 8.5%, minimum wage (now the National Living Wage) up to £11.44/hour, alcohol duty frozen until August 2024 and local housing allowance unfrozen.
November Rain: No extra devolution for London (despite devo deals elsewhere in the country) and no funding for the Docklands Light Railway extension under the Thames.
Bussed in: Instead, £23m allocated to a rapid bus network to support Docklands 2.0, falling way short of the £1bn TfL and the Mayor were seeking for the DLR. A case of doing it on the cheap? A Tory Government worried about splashing the cash in Labour London this side of an election?
Harvest Moon: Elsewhere, more money is allocated to house building, allowing local authorities to recover full costs for major planning applications (with refunds where strict deadlines aren’t met), billions more for key future growth sectors including life sciences.
Rabbit out of the hat: The headlines will be dominated by the eye-catching 2p cut to National Insurance.
Initial reactions: Shadow Chancellor Rachel Reeves: “After 13 years of the Conservatives the economy is simply not working” …Mayor of London Sadiq Khan “another deeply anti-London budget”…Lib Dem Treasury Spokesperson Sarah Olney: “These dismal forecasts show the economy is on life support” …Cllr Claire Holland, Chair of London Councils: boroughs left “teetering on the edge”.
And breathe: Fiona Fletcher Smith, Chair of G15 and Chief Executive of L&Q: “very welcome” that benefits will be uprated with September’s inflation figures and “pleased” local housing allowance is being unfrozen… Raine Newton-Smith, CBI Chief Executive: “right to prioritise ‘game-changing’ interventions that will fire the economy”.
Pity the experts: As is always the case with government financial statements, what gets mentioned at the despatch box and what is spun into the media is only a slither of what is included in the extensive Treasury documents released at the same time. Experts, journos and opposition political parties will be burning the midnight oil poring over the detail to see what nasties might lie hidden in the small print.
LIKE LONDON BUSES: You wait for one Mayoral poll to come along, and you get not two but three in quick succession. On the back of the recent YouGov poll, two new polls confirm that incumbent Sadiq Khan has a comfortable lead over his main rival, Conservative Susan Hall. One gives him a twenty-point lead (and even if Jeremy Corbyn were to be on the ballot paper, Khan is ahead 39%-24%). The second, by Lord Ashcroft, puts him on 50% to Hall’s 27%.
Detroit Spinners: While Khan can no doubt take comfort from the polls, his Tory opponents on the London Assembly have attacked him for what they allege to be a secret plan to introduce pay-per-mile road user charging under the code name ‘Project Detroit’.
True intentions: Khan said there are ‘no plans on the table’ for such a scheme, denying knowledge of Project Detroit, but Conservative Assembly members claimed it revealed the Mayor’s ‘true intentions’. Given how politically bruising ULEZ expansion has been for Khan, and the distancing Labour nationally has made from clean air zones and road user charging, this is shaping up to be a key issue in the race for City Hall.
ASA it was: Elsewhere, the Mayor has come under attack following reports that the Advertising Standards Agency has been critical of Transport for London (TfL) TV adverts ahead of the ULEZ expansion earlier this year and the claims made about reductions in air pollution.
Chapped: The Mayor of London has launched a new Council Homes Acquisition Programme (CHAP) which will provide local authorities with funding to purchase homes to be used as social housing or temporary accommodation.
Goodbye Piccadilly: Piccadilly Line users will be cheered by the first glimpse of new trains which should bring relief to long suffering commuters in the coming years. Much excitement among moquette fans (including some of us here at LCA) at news the new trains will have their own new design.
Bakerlucre: While there’s a boost for TfL’s credit rating after improved fare income, major questions hang over a new fleet for the Bakerloo line, whose trains are the oldest still in passenger service anywhere in the UK. Currently, with no funding, the purpose-built Siemens factory in Goole faces uncertainty over future orders.
Farwell Leicester Square: Khan risks losing one of his longest-serving allies, with Deputy Mayor for Business, Rajesh Agrawal, selected as Labour’s candidate to fight Leicester East at the next election.
Out Foxed: Agrawal, who has been at City Hall since the beginning of Khan’s time as Mayor, beat Camden councillor Rishi Madlani in the selection for a seat where former Islington Labour Cabinet Member Claudia Webbe is the sitting MP (although she’s served as an independent having been expelled by Labour in 2021).
Bob-a-Job: Tory MP for Beckenham Bob Stewart has announced he won’t seek re-election at the next election. He was recently found guilty of a racially aggravated public order offence, and boundary changes make the new seat of Beckenham and Penge considerably more marginal.
Exit stage right: Stewart joins Stephen Hammond (Wimbledon) and Matthew Offord (Hendon) as London Tory MPs deciding to stand down at the next General Election. Given the current polling, will others read the runes and follow suit?
LONDON PLANNING ROUNDUP
- The High Court has approved Marks & Spencer's application for a judicial review of Michael Gove's decision to refuse plans for the redevelopment of their Oxford Street store. The plans were approved by Westminster City Council and the Mayor of London before being called-in by the Secretary of State.
- Landsec has been granted planning permission by the City of London for the redevelopment of 55 and 65 Old Broad Street. The proposals include the demolition of 55 and the delivery of a new 23-storey office and retail building, as well as the refurbishment of 65.
- The Mayor of London has refused plans for the MSG Sphere in Stratford due to its environmental and heritage impacts, as well as concerns about light pollution. The LLDC approved Madison Square Garden’s plans in March 2022, leading to the Secretary of State issuing a holding directive in February 2023, preventing any decision to be made by planning authorities.
- Wandsworth Council’s Planning Committee has rejected the All England Club’s plans to expand the Wimbledon site, voting unanimously and in line with officers’ recommendations. The proposals, which include a new 8,000-seat stadium and 38 additional tennis courts, will now fall to the Mayor of London for consideration following Merton Council’s approval in October 2023.
- London Square’s plans to deliver 116 homes (50% affordable) at the site of a defunct Greggs factory in Twickenham have been approved by Richmond Council against the recommendations of planning officers. The 2.7 acre site has been amended from previous plans to include 1,000 sq m of light industrial space, and an additional 10% of affordable homes.
- London Square has submitted plans to deliver 301 homes (52.1% affordable) on former industrial land at Dollis Hill, Brent. Proposals for developing the 0.9ha site include demolishing existing light industrial units to construct six blocks ranging from six to 19 storeys, with 1,934 sq m of ‘flexible industrial’ workspace.
- Almacantar and Network Rail have unveiled plans for the 3.62ha Puddle Dock site next to Blackfriars Station in the City of London. The masterplan includes the demolition and refurbishment of existing buildings on the site and the delivery of eight new buildings to provide a combined office floorspace of over 90,000 sq m.
- Knight Frank has made a number of senior appointments to its UK occupier advisory team.
- Former Managing Director of Hammerson UK and Ireland, Mark Bourgeois, is to take over as Chief Executive of the Government Property Agency on an interim basis. Bourgeois is to fill the role vacated by Steven Boyd, who is stepping down after five years with the GPA.
- BNP Paribas Real Estate has appointed James Barrett as its National Head of Affordable Housing, joining from Lifestory Group.
- London Assembly Member for Ealing and Hillingdon, Dr Onkar Sahota, is not featured on the Labour Party’s shortlist to contest the constituency in the next elections in May 2024.
- As mentioned above, Deputy Mayor for Business, Rajesh Agrawal, is Labour’s new parliamentary candidate in Leicester East and Conservative MP for Beckenham, Bob Stewart, has announced he won’t stand at the next General Election.
STATE OF PLAY: The challenges facing the UK’s life science and medical sectors have been clearly set out in the last week.
Damning: First, the Public Accounts Committee published a report on the Government’s New Hospitals Programme (NHP) which concluded that the Committee had ‘no confidence’ that the promised 40 new hospitals will actually be delivered. It also warned that if delivered, the new hospitals are at risk of being too small.
Budgeting: The Committee also accuses the Government of ‘raiding capital budgets’ and having ‘failed to consider the long-term consequences for services and patient care’.
Crumbling: As for existing hospitals, the report said that the Department for Health and Social Care needs to revise its strategy for managing the reinforced autoclaved concrete (RAAC) crisis.
Unlocking: As for the life sciences sector, a new report by British Land and Savills published this week has shown how much progress needs to be made to ensure that the UK reaches its full potential.
Comparing: According to the latest figures, businesses are looking for 2.2m sq ft of lab space in the Golden Triangle (London, Oxford and Cambridge), compared to just 385,000 sq ft of available space. The report highlights the competitiveness of US cities, which have significantly more lab space as well as the ability to delivery new space at a faster pace.
Accelerating: The report makes five recommendations to Government comprising: setting ambitious targets for the sector, prioritising the construction of infrastructure such as East-West Rail, creating new Development Corporations to accelerate delivery, expanding R&D tax credits and boost training and employment programmes for the industry.
Progressing? In today’s Autumn Statement, the Chancellor announced £520m from 2025-26 to support ‘transformational manufacturing investments in life sciences’, as well as plans to merge Research and Development Expenditure (RDEC) and SME schemes.
- What items Londoners leave on the Tube. Spot anything you lost?
- The new Lord Mayor of the City of London Michael Mainelli’s comment piece for City A.M. on his ‘Mayoral theme’ for his tenure, which is ‘connecting to prosper’.
- The Evening Standard hail the sparkling new Piccadilly line trains, but ask why has the Bakerloo line been left behind?
- For you caffeine lovers, City A.M. look at how Grind went from a Shoreditch mobile phone shop to a growing coffee empire.
- Fed up with Oxford Street’s shops not opening till Midday on Sundays? London businesses call for Sunday trading changes.
- Ros Morgan from Heart of London Business Alliance in City A.M. on why London’s economic success matters.
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