LDN Weekly – Issue 237 – 28 September 2022 - High Voltage Volatility
HIGH VOLTAGE VOLATILITY
It’s a packed edition this week as we come out of mourning and into party conference and networking season.
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LCA Managing Director, Insight, Jenna Goldberg and Senior Advisor Robert Gordon Clark We hope you enjoy this edition and if you don't already, do follow us on Twitter and Instagram and feel free to visit our website for more information on LCA’s team, services, and clients. Oh and a technical note: If you like hearing from us, make sure to add ldn@londoncommunications.co.uk to your contacts or ‘safe sender’ list – this will help ensure our news bulletin lands in your inbox.  GROWTH IN A RECESSIONThere’s no sugar-coating the reaction to Friday’s eagerly awaited fiscal statement. Kwasi Kwarteng’s ambitious Growth Plan was billed as a vision for averting a recession by means of tax breaks and deregulation. Instead, it sent stock markets and the pound into a nosedive even before the Chancellor has finished his speech, a negative trend that has continued in the days since. Whilst promised tax cuts have been cautiously welcomed by most businesses, the suggestion that these will be paid for by borrowing at a time of rising inflation (even as public money is shovelled into capping energy process) have caused unease. Simultaneously, the plan’s various “deregulation” pledges, most of which are so thinly outlined as to be see-through, seem to have impressed few, barring perhaps the Institute of Economic Affairs. Taking the hint, the Treasury issued an update on Monday, promising a Medium-Term Fiscal Plan on 23 November, complete with Office of Budget Responsibility forecasts. The Bank of England initially declined to take any drastic offsetting actions, while offering assurances it is monitoring developments but then today intervened in gilt markets. All of which has done little to settle market volatility and by Tuesday even Moody’s and the International Monetary Fund had choice words for the Chancellor’s grand plans. THE VIEW FROM LONDONWhat does all of this mean for London? The capital’s political leadership greeted the Growth Plan with mixed emotions. The Mayor of London's verdict was damning, the City of London Corporation was pretty positive and London Councils was… silent, though it seems clear enough that the Growth Plan delivers on barely any of the priorities London's boroughs set out before the statement. As for the private sector, BusinessLDN and LCCI have been broadly positive, singling out tax cuts and the promised return of VAT-free shopping for international visitors as positive. The LCCI’s comment is more nuanced and says, among other things, that “it is our hope that today’s announcement is the precursor to the government enacting a long-term, credible economic plan.” Ouch. Centre for London’s reaction is equally mixed, noting that while it seems likely to benefit London more than other regions, the Growth Plan leaves many crucial questions unanswered, as it steered clear of the substantive structural reforms needed to unlock the capital’s potential in the long run. Looking on the bright-side, Alex Jan - Chief Economic Adviser at London Property Alliance (CPA & WPA) and Chair of several central London BIDs – argues that this was, from a certain perspective, a remarkably pro-London budget, giving the capital a stronger footing to agitate for meaningful devolution. PROPERTY REACTSMeanwhile, this has all sent unpleasant ripples through the property market. Many lenders have temporarily halted new mortgages, listed housebuilders have seen shares slide, analysts are predicting house prices could drop by 10-15% over the coming months and some have begun to fear the worst. Clearly, promises to cut Stamp Duty and freeze Corporation Tax have not had the buoyant effect the Government hoped for, at least not yet. As for deregulation, the Growth Plan offered the sector Investment Zones and in a piece for NLA's blog we’ve focused on these elusive oases of low-tax and light-touch regulation. You can read our early analysis here in full, but in brief, our view is that whilst they could stimulate development, proposed plans remain very thin on substance, even considering additional guidance issued on Saturday. In regards to legislation, the fiscal statement triggered a fair bit of unwelcome confusion; in his speech on Friday, Kwasi Kwarteng referenced a new “Planning and Infrastructure Bill”, feeding speculation that the Levelling Up & Regeneration Bill would be scrapped. However, the Government has since clarified that they are “continuing to progress” LURB. Separately, groups including RIBA, UKGBC and a coalition of nature and wildlife groups have warned that a rush to loosen planning rules could compromise efforts to lower emissions and protect biodiversity. BYE BYE BYFORDAfter just over two years at the helm, Transport Commissioner Andy Byford has announced his resignation. Having seen Transport for London (TfL) through an extremely difficult period, Byford has said that he is due to return to the US with his wife. Upon taking the job as Commissioner, Byford said that his main priorities were to oversee the opening of the delayed Elizabeth Line and secure long-term funding for TfL from the Government. Byford achieved the latter just a couple of months ago, after five short-term deals and nine funding extensions. Meanwhile, the central section of the Elizabeth Line entered service in May, marking another success for Byford – and while much work remains to complete the full line, TfL has announced that the new Elizabeth Line station at Bond Street is set to open on 24 October, two weeks before the Line moves to a seven days a week service. Andy Lord, currently TfL’s Chief Operating Officer, is set to take over as Commissioner in an interim capacity in October following Byford’s departure. In other transport-related news, the Mayor has announced, in response to the cost of living crisis, free travel has been introduced for around 5,000 of the lowest paid transport workers who were not previously eligible for it. This will include cleaning, catering and security staff who are employed by TfL’s suppliers rather than by TfL itself. Separately, the City of London has seen its plans to reduce its speed limit to 15mph blocked by the Department for Transport due to inaccurate speedometers in cars. The Corporation is set to install ‘advisory’ 15mph limits on its streets regardless. LONDON PLANNING ROUNDUP
ARCHITECTURE TOUGHPractices and architects alike often feel the impact of economic headwinds before others in the sector and these clearly are challenging times. Major international architecture and design practice Aedas’ London studios – Aedas London and Aedas Interiors London – have entered liquidation. Separately, practices will be closely watching the outcome of a threatened strike ballot at Atomik Architecture. Meanwhile, the Royal Institute of British Architects (RIBA) has announced that its membership fees for 2023 are to increase by 7.5% citing the organisation’s own growing costs – and while many architects and practices will flinch at the added burden, they will surely commiserate. Elsewhere, the Architects Registration Board (ARB) has launched a consultation on proposals that would, from 2024, require all UK architects to comply with its Continuing Professional Development (CPD) scheme and practices to report their CPD activities to the ARB on an annual basis. Separately and in happier news, we’re really pleased to see LCA client Twelve Architects has won the competition to design £37m Central Teaching Laboratory at the University of Sheffield, which will deliver 6,950 sq m of flexible teaching laboratory space. PEOPLE NEWS
 COUNCIL-LED REGEN LATESTMajor local authority-led regeneration programmes in London have had mixed-fortunes over the past two weeks. In west London, Hillingdon Council has agreed a deal with Higgins Partnerships to demolish and redevelop the Austin Road and Avondale Drive estates in Hayes. There are currently 400 homes on the two estates and a majority of existing residents voted in favour of proposals to deliver 740 new homes on the sites, with the plans approved by Hillingdon’s planning committee in March 2022. Half of the new homes will be affordable, and the remainder will be sold on the open market. Over to north-east London and Redbridge Council has selected Countryside to help deliver the Ilford Western Gateway regeneration programme. The town centre scheme will deliver around 1,000 homes and 30,000 sq ft of community and commercial space. Meanwhile, Enfield Council’s Meridian Water regeneration scheme, being delivered in partnership with Vistry, is facing delays due to rising construction and borrowing costs. Councillors have been notified in a report that the final design work for Meridian Four, which is expected to deliver more than 800 homes within the wider regeneration zone, will be pushed back to the next financial year, as will the contract to deliver street works for the scheme. TO THE STREETSWith the period of national mourning and the fall-out from Friday’s fiscal fiasco, it has been easy to forget the impending industrial action and protests set to cause disruption in the capital. After commuters were inconvenienced throughout the summer, all the signs are that unions are doubling-down on their demands over pay and conditions. Rail workers are as ever leading the charge (or perhaps better, the stop), with strikes expected to severely impact the retail, hospitality and leisure sectors. Having been postponed out of respect to Her Late Majesty, national rail strikes originally planned for September will now take place on 1, 5 and 8 of October. Some attention has been paid to the timing of this action, which seems to deliberately coincide with the Conservative Party Conference. Entirely aside from industrial action, October is set to be a busy month for protests in the capital. Just Stop Oil’s action this weekend threatens to disrupt the London Marathon although Sadiq Khan has urged organisers to consider the impact on charities. Further protests by Extinction Rebellion commence on 7 October and a notable, albeit likely less disruptive, national demonstration in London by Enough is Enough is planned for 5 October. In addition to other smaller protests, the next few weeks promise to be a troubling time for commuters and businesses. 
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