It’s time to celebrate - the recession is over!
Official government figures confirm the UK economy grew faster than expected in 2013 and at the fastest rate since the 2007 financial crisis. Economic growth for 2013 was 1.9% - a vast improvement over 0.3% seen in 2012. At this rate UK plc may be able to claw itself back up to the size it was before the crisis – just in time for the May 2015 general election. So is this all good news? Well maybe for London and the UK as a whole but maybe not so for small businesses and provincial towns.
Firstly, the Bank of England has kept it’s base interest rate down to 0.5% for the last 5 years but might not do so for much longer. Business loans and mortgage rates may become expensive which is bad news for small businesses and consumers.
Secondly, the vast majority of economic growth has been in London and the South East. Given that Markets are a good indicator of a local economy what is still glaringly apparent is the contrast between London (‘Recession- what recession?’) and the economy in the rest of the country. Anyone staring at empty stalls and boarded-up shops along the High Street in Mudford-on-Sea is bound to consider throwing in the towel and heading for the bright lights. Some economists have even suggested the economy is now so ‘Metrocentric’ that anything outside the South East is almost ignored by a Parliament which sits in London.
OK – Birmingham, Manchester Liverpool and Leeds may show ‘green shoots of recovery’ but what about the medium to small towns outside the metropolitan areas? A recent report: ‘Cities Outlook 2014’ prepared by research organisation ‘Centre for Cities’ suggests London is sucking in provincial talent and ideas faster than ever. You can download a copy from www.centreforcities.org. As a result the London residential property market is rocketing and has become unaffordable for first-time buyers whilst perfectly good £70k terraced homes in the provinces stand empty. The decision by Bank of England Governor, Mark Carney to withdraw mortgage support for first-time buyers may stop the London housing market from overheating but does nothing for Mudford.
This is not good news for (A) Londoners faced with a sky-high cost of living and accommodation and (B) the rest of the country emptied of talent and investment. The report contains some startling figures about so-called internal immigration into London, let alone external immigration into London from the rest of the EU. The House of Commons Public Accounts Committee also pointed out the experience of Spain that HS2-type high speed rail accelerates the problem.
A lady stallholder in Mudford has suggested a solution. She proposes a return to ‘government by itineration’ i.e. Parliament travels the country and sits in the provinces for six months of the year, rather like the Monarch did in the Middle Ages. A couple of weeks in Mudford would be welcomed by her and other local businesses – even more so if the £80 billion HS2 budget was diverted to improving infrastructure within the town, not leading out of it.
Despite the vitality of London one of the saddest sights you’ll still see are the ‘skipdivers’ who appear at closing time, scavenging for unsold stock. Unfortunately it’s still a common sight so it was interesting to see the CPS do a U-turn on an intended prosecution last month.
North London squat-dwellers Paul May, Jason Chan and William James were arrested after rummaging through the bins at the back of an Iceland foodstore in Kentish Town, North London. The Crown Prosecution Service intended to prosecute them under the 1824 Vagrancy Act but the Iceland Chief Executive swiftly stepped-in and asked for the case to be dropped because ‘the Company had not sought a prosecution’.
This quick-thinking avoided awkward publicity about why so much food was being skipped and a potential PR train crash for Iceland. But it also left unanswered some interesting legal issues, e.g. are you ‘stealing’ something when it ‘s already been dumped as waste? A successful prosecution would have been bad news for Private Investigators who specialise in juicy scandals scavenged from household bin bags.
The case also highlighted how UK food retailers and consumers remain amazingly wasteful. Some foodstores do donate unsellable short shelf-life products to food banks and homeless charities but a staggering six million tonnes (£10 billion!) of food is still binned by consumers every year because it is ‘out of date’. Shoppers don’t understand the difference between the statutory ‘Use-by’ date and the retailers ‘Sell-by’ or ‘Best-until’ dates. Unsellable short-dated stock gets skipped by retailers so into the Iceland bins went £33-worth of mushrooms, tomatoes, cheese and Mr Kipling cakes, only to be snaffled by Paul, Jason and Bill.
Given that it was intended for landfill you can’t help sympathising with them, but it wasn’t terribly bright to scale a wall near a Police station at midnight and trespass on private property. That’s a bit different to skipdiving through the bins on Mudford Market.
Paul May said he was anything but ashamed at sharing discarded food with his housemates. “It’s more morally questionable they throw away usable food than how people recover it” he said. “In some ways I’m proud of what we do.” Recovering food from skips allows him and his ‘Freegan’ chums to eat more healthily than buying food on a low income and they regularly recover large quantities of frozen chicken breasts and the like. The previous week they’d even enjoyed a luxurious quail supper.
A spokesperson for the CPS said “We have paid particular regard to the seriousness of the alleged offence and the level of harm done. Both of these factors weigh against a prosecution. Additionally, further representations received today from Iceland Foods have affected our assessment of the public interest in prosecuting.”
Everyone knows the Netherlands is a pleasant place to visit and the Dutch have a pretty laid-back attitude to some errr… ‘vices’ such as Cannabis – but maybe not so to Sugar. Paul van der Velpen is head of the Amsterdam Public Health Services and wants to see it regulated. Obesity in the Netherlands has doubled in the last 20 years or so and he blames much of that on sugar, not the deep-fried croquettes, cannabis or certain other things on offer in De Wallen.“Just like alcohol and tobacco, sugar is actually a drug. It is the most dangerous drug of the times and can be easily acquired everywhere” he says on the official public health website. He has cited research suggesting that sugar – unlike fat or other foods – as well as making you fat is actually addictive, creating an insatiable desire to continue eating. He has accused the food industry of cynically exploiting the effect by adding extra sugar to processed food to increase sales. Now he wants to set limits set on how much can be added, plus a ban on sugar-laden sweets and soft drinks sold in schools and cigarette packet-style warnings about the health risk.
His suggestions come in the wake of new guidelines on sugar intake proposed by the World Health Organisation. The WHO is likely to recommend adults halve their average daily sugar intake from the current ten teaspoons a day to five in order to reduce diabetes, heart disease, obesity and tooth decay. If the UK Department of Health adopts the guidelines (as seems likely) then food companies will be forced to reduce sugary ingredients. That would be hugely expensive for the industry and might prove highly unpopular with it’s sugar-addicted customers.
The work for WHO has been led by the snappily-named ‘International Association for the Study on Obesity’ which has described the guidelines as ‘political dynamite’ given the size of investment in the food industry. A spokesperson suggested ”The food industry will do everything in their power to undermine the guidelines” which was a sentiment echoed in the UK by ‘Action on Sugar’, a pressure group urging the DoH to adopt the recommendations without delay.
‘Action on Sugar’ has been set up by the same people who gave us ‘Consensus Action on Salt and Health’ (CASH) to reduce consumers’ salt intake and their blood pressure. CASH was highly successful at raising awareness, partly because it’s Chairman, Graham MacGregor is professor of cardiovascular medicine at the Wolfson Institute of Preventative Medicine. He is now pressing the Dept. of Health to set sugar content standards for the food industry although he concedes this can be done bit by bit. The target is a 30% reduction over 5 years with enforceable standards which don’t leave manufacturers too much room for ‘interpretation’ of labelling rules. The group has kicked-off it’s campaign by ‘naming and shaming’ several products, including:
• Starbucks Caramel Frappucino with whipped cream (tall) – 11 teaspoons of sugar.
• Coca Cola Original (330ml) – 9 teaspoons of sugar
• Mars bar – (standard size) – 5 teaspoons of sugar
• Heinz tomato soup (300ml) – 4 teaspoons of sugar
Reducing sugar content could be good news for Fruiterers (a quick fructose fix for office workers?) but equally bad news for Starbucks – not that they care too much after years of dodging UK tax.
This is the start of a long and potentially very boring debate whilst scientists argue about how you define sugar content – added sugar versus naturally-occurring sugar etc – but will have a fundamental impact on food ingredients. A ‘Mars a day’ could definitely be your limit unless manufacturers opt to change ingredients.
Whilst the food industry lines up for the battle the tobacco industry continues to receive a battering. The not-so-good news for Irish smokers is an announcement by Irish Health Minister James Reilly of plans for a ‘tobacco-free Ireland’ by 2025. “Smoking is the leading cause of preventable death in Ireland” he stated, whilst acknowledging it poses an ‘extraordinary challenge’ to reduce smoking from 22% to under 5% of the population. But maybe he’ll be successful; No-one expected the Irish government to be successful with it’s 2004 ban on smoking in public buildings. It now proposes to extend this to parks and beaches to ‘de-normalise’ smoking for children.
Meanwhile the recession and sky-high duty rates have fuelled a surge in cigarette smuggling into the UK and Ireland. The worldwide price differences make it amazingly profitable – until you get caught that is. The smugglers’ benchmark is the ‘Marlboro index’ which currently stands at well over £8.00 for 20 fags in the UK and Ireland, versus £1.10 in Russia and the Far East. Not surprisingly HM Revenue and Customs and the Irish Gardai are hammering anyone who tries to import or sell smuggled fags. Don’t be tempted by anyone offering them as a profitable sideline for your stall.
On a lighter note, if you want to see how much you’re paying for your fun and filthy habits take a look at the ‘Vice-ometer’ calculator at http://www.thisismoney.co.uk It tells you how much of your booze, fags and lottery money goes back to the government in tax. Sadly it doesn’t include the cost of a lads’ weekend in Amsterdam or what you have to do to earn an ounce of snout in Wormwood Scrubs. I’m told one of them isn’t very nice.
So how are the January sales for you? Lots of Shoppers seem to be voting with their feet and deserting the High Street in favour of online sales. ‘Why suffer cold and wet feet traipsing in search of bargains when you can stay at home and do it online?’ was the thinking behind another Government-supported attempt to revive our emptying High Streets. First there was the DCLG-sponsored ‘Portas review’, then the ‘Town Team’ competition and the private ‘Grimsey Review’ and now it’s the turn of the ‘Distressed Town Centre Property Taskforce’ sponsored by the HM Treasury. You can download it from http://policy.bcsc.org.uk/beyondretail/index.asp
It covers the usual big issues – lack of funding, online sales, fragmented land ownership and parking policy etc and outlines interesting initiatives such as the ‘retail business incubators’ in Wolverhampton and Tamworth. Also how Rotherham provides revenue and capital support for fledgling businesses. Some Councils like Birkenhead and Rochdale are promoting their High Street Markets as ‘retail differentiators’ and there’s a good argument to be had about why this hasn’t happened before. But like the reviews before it this one offers little else but local policy support for SME’s (‘Small and Medium-sized Enterprises’). There’s a nice piccy of Stockport Market Hall and some welcome discussion of ‘provision of mentoring and…social media for independent retailers and small businesses’ but I can’t help thinking the review is still missing the blindingly obvious.
SME’s are less deterred by the cost of rent and rates than the administrative burden of paperwork they encounter as they expand. If HM Treasury is serious about encouraging SME’s as ‘the engine room of the economy’ then it needs to take a long-term approach to relaxing Vat rules, tax thresholds, NI and employment legislation which apply to small businesses. Those costs are outside the control of any independent retailer and a very real disincentive to growth. You can always negotiate your rent downwards with a landlord but just you wait and see what happens when you miss your Vat return. Didn’t David Osborne promise a ‘bonfire of paperwork’ in one of his budget speeches? That’s the way to cure SME’s cold feet.
Someone else has definitely got cold feet – MP’s. The Independent Parliamentary Standards Authority created to set MP’s pay and expenses in the aftermath of the expenses scandal proposes to increase MP’s salaries by 11% to £74,000 p.a.in 2015, despite objections by all parliamentary leaders. The best bit is that MP’s have no way of stopping the increase unless they change the law they introduced a couple of years ago. Labour has said ‘any rise in MPs’ pay must be considered in the light of…the cost-of-living crisis facing people across the country’ and the Prime Minister has threatened to abolish IPSA if it force-feeds MP’s with another eight thou. per annum. He didn’t mention anything about HS2 though. Great stuff. I wonder how many will vote in the abolition debate.
And finally, some not-so-cold cold feet: German Scientists have discovered how Penguins manage to keep their feet (and the baby Penguins which sit upon them) nice and cosy during a blizzard. A similar problem is shared by many Traders on Open Markets. Apparently the Penguins bunch together and shuffle around in a sort of Mexican wave whilst squawking about the weather and how few fish there are, or whatever. This keeps the ones in the middle toasty warm whilst they struggle not to get shuffled out to the edge. With cold Teutonic logic the scientists conclude the ‘regulars’ who turn up first always secure the best pitches in the middle whilst the ‘casuals’ who can’t be arsed are left with the coldest pitches at the edge. This sounds very familiar and I can’t work out why scientists needed to go to Antarctica to confirm it.
So leave your moonboots at home and train a pair of Penguins to sit on your feet. Or if the Toby objects, then seize the business opportunity and start manufacturing Penguin-lookalike boots.
Keep shuffling. Spring is not that far away.
Back in the 1960’s Colonel Sanders of fried chicken fame allegedly tried to breed chickens with three legs for his restaurants. This was thankfully unsuccessful, well before the potential for genetic modification became apparent. It now seems likely the first ever genetically-modified meat will be a fish, not a chicken and could be hitting the shelves next year if the US Food and Drug Administration gives approval. GM-modified plants have of course been around for some time (although banned by the EU) but this GM salmon is likely to be the first meat to be approved for human consumption. Not surprisingly it’s been called the ‘Frankenfish’ by Friends of the Earth who are mounting a campaign against it.
Sooner or later this was bound to happen and open up a whole raft of ethical and scientific arguments about changing the natural world. Scientists have already proved they can grow meat tissue under laboratory conditions for a disgusting-looking beefburger, but that’s entirely different to creating a new sentient life form before killing and eating it. Just you wait until world religious leaders start debating the ethics let alone the EU bureaucrats.
The ‘AquaAdvantage’ salmon has been created by inserting genes from other fish species into the DNA of an Atlantic salmon. The resulting hybrid fish is far more suitable for farming as it grows twice as fast as it’s ‘real’ cousin in the ocean, promising higher yields and lower costs for salmon farmers. This is of considerable interest to protein-hungry populations like China where plans are afoot for an inland salmon farm on the edge of the Mongolian desert, no less. Just like farmed prawns, you don’t want to know what they’ll be fed on.
The FDA have concluded the GM salmon is ‘as safe as food from conventional Atlantic salmon’ and does not threaten the environment. Owners of Scottish rivers which have been decimated by sealice infestation from salmon farms would doubtless disagree. Meanwhile the UK salmon farming industry is wondering whether consumers would be prepared to eat GM-modified, farmed salmon.
An FDA approval could persuade UK producers to apply for a production licence, encouraged by Environment Secretary Owen Paterson’s recent support for GM foods. Government scientists have already endorsed GM plants to increase food crop production but they’ve not yet been brave enough to endorse GM-modified animals.
Some GM plantstuff is already included in livestock feeds but taking the logical next step and running the risk of introducing a nasty like Mad Cow disease directly into the human food chain is a bit too rich. There is also little backing for the move from the public. A ‘YouGov’ poll in June found just 21 per cent of people said they supported the production of GM food, while 35 per cent opposed it. And that was without their being asked if they would make a distinction between GM-modified plants and animals.The ‘AquaAdvantage’ salmon has been developed by a Canadian Company called AquaBounty. Whilst the Company insists it will only produce sterile, female fish several campaigners who’ve watched ‘Jurassic Park’ point out escapes are inevitable and will place wild stocks under threat. Salmon can – believe it or not – change sex when put under stress e.g. raised in a cage. Campaigners are suggesting it would be better to properly-manage the stocks of wild salmon but developing countries who need cheap protein and don’t have wild salmon don’t give a stuff.
FoE have pointed out that approval will “set a precedent for other genetically-engineered animals, including cows, chickens and pigs, to enter our food system” and are urging supermarkets to pledge for only GM-free seafood. Kroger, owner of several US supermarket chains, have not committed so are being targeted by FoE supporters tweeting about their products.
FoE have some unlikely supporters in Alaska as well. Apart from exporting lots of lovely oil and natural gas their Alaskan neighbours have an important commercial and recreational salmon fishing industry. Alaskan US Senators have been listening to sceptical scientists who maintain escapees will interbreed with wild stocks and then scoff all the young wild salmon in the ecosystem. Senator Mark Begich has said ‘Well-managed, wild salmon are one of our nation’s richest resources and these fish pose a real risk to ocean ecosystems’. He must have been talking to the same Scottish Ghillie who gave me an hour-long lecture on the evils of salmon farming.
The fun of salmon fishing is trying to outwit a wary natural predator, not simply haul in an overdeveloped hybrid so I’m sympathetic. This years’ Company fishing competition was the usual catalogue of ones that got away, apart from Peter Naylor who smugly landed a 38lb’er.
When I was about six years old the first supermarket opened in my home town. I can still remember my parents curiosity and our first visit to this self-service heaven. Also how a salesgirl in the Macfisheries shop (remember them?) told me fish had fingers just like mine, so cutting them off was cruel. I played right into her hands and insisted my parents continued to buy whole fresh fish from Macfisheries and not frozen fish fingers from the supermarket. Not that it helped Macfisheries, who went belly-up in the 1970’s.
The best piece of entertainment last month was the televised Commons Public Accounts Committee tearing into the revenue, cost and programme estimates of the new HS2 high speed rail link. The Committee suggested the Dept. of Transport had lost control of the HS2 programme and the spiralling costs – £30 billion, then £40 billion and now £50+ billion are ‘based on fragile numbers, out-of-date data and assumptions which do not reflect real life’. The assumptions include a 10-year old belief that technology does not exist which allows businessmen to work on trains. The DoT consider the vast capital cost of shaving a few minutes time off the London-Birmingham journey is thus justified. Their spokesperson seemed blissfully unaware of broadband, video conferencing, smart phones and tablets. The best part was the admittance that cost estimates were ‘industry-generated’ (Civil Service-speak for: “We asked a builder”.)
One commentator has likened HS2 to the scandal of the new Scottish Parliament building – on wheels. The Holyrood building’budget grew from £40m to over £300m and the end result looks like a 1970’s car park designed by someone on acid.
Chairperson of the PAC, Margaret Hodge questioned the DoT’s assertion a faster train link would spread wealth into the provinces. The experience of the Spanish HS network seems quite the reverse and Mrs Hodge pointed out: “The evidence suggests when you improve the link between a capital and provincial cities…you draw economic activity down to the capital and don’t stimulate activity in the cities.”
The former Business Secretary, Lord Mandelson later admitted the last government proposed HS2 before the 2010 general election ‘to paint an upbeat view of the future’ after the 2008 financial crash. He admitted it was politically-driven and costings were ‘almost entirely speculative’ which has left many puzzled at the PM’s continued support for the project.
This saga would be great knockabout entertainment if it didn’t have the potential for another financial disaster. More enlightening was the publication of the so-called ‘Grimsey Review’ by the eponymous Bill Grimsey, formerly Director of Wickes, Iceland and now-defunct Focus. This privately-sponsored report is worth a read.
It is intended as an antidote to the Government-promoted Portas Report into ‘The future of our High Streets’ . Unlike that it is based on some serious research by the Local Data Company and opinions of a diverse group of retailers. It re-covers old ground like the impact of new technologies on retailing (on-line sales c.20% of sales turnover and growing at 10% p.a.) and the Business Rates regime which has not evolved to keep pace.
Grimsey concludes there are simply too many shops in the UK and there is a clear disparity between the North and South. He doesn’t suggest this can be solved by HS2. He also points out that online shopping for food (only currently 3% of sales) will increase once Amazon, Morrisons and PayPal get into top gear, so ‘physical shopping’ will continue to shrink. And that Ebay is quickly catching up with Amazon as a low cost E-commerce platform for independent retailers.
If the UK’s High Streets are over-provided with shops Grimsey suggests support is needed for existing retailers and to encourage non-retail uses. Some of his suggestions are deliverable but many will run into the buffers (sorry about the pun) once the Local Government Association and British Retail Consortium have their say. But there again I thought the same about smoking in pubs. Here are a few:
• The Government ‘Funding for Lending’ scheme designed to support Bank lending to small businesses is not working. It should be replaced by direct lending support from Council reserves and their pension funds to businesses in their catchment.
• Every Local Authority should establish a Town Centre Commission with a 20-year business plan, presented with an annual progress report. Landlords of empty shop units should be compelled to apply for a Change of Use to make the building ‘productive in the community’ with an alternative use.
• ‘MegaMall’ developments should be obliged to create affordable space for local traders and Market stall pitches.
• National retailers should be obliged to invest .25% of one years sales as a one-off levy into a local Economic Development Fund to support start-up businesses.
Radical ideas, but I suspect the report’s real value is in the debate it stimulates.
Much more fun was the outcome of the 2013 “Ugliest Town in Britain” poll run by http://www.craptownsreturns.co.uk. I can’t believe Hemel Hempstead was voted No. 1 in the UK – it can’t be worse than Cumbernauld at No.10 – but ‘Emel (as the locals call it) may be a victim of its own footfall. Lots of people visit and voted as a result.
It might not be stuffed full of architectural gems but it does have a nice Market which deserves your support. Forget your trip to the Chateaux of the Loire and visit ‘Emel instead.
So can you park your van close to your stall – and as importantly can your Customers park near the Market? Sorting out a sensible car parking policy is high on the list of ‘things to fix’ for the Councils who won £100,000 each in the DCLG/Portas competition. Parking policies which attract shoppers back from ‘free’ supermarket carparks are high on the list of must-do’s if High Streets are to be revitalised. But car park charging even affects residents who don’t drive so the Councillor lucky enough to be in charge of parking policy is guaranteed a full mailbox.
The basic problem is there are just too many cars concentrated into too few spaces. St. Ives in Cornwall is delightful apart from the lack of parking space at any time, let alone the summer. Three parking spaces sold last year for £160,000 which is a bit steep but not as rich as the single 11ft by 12ft space in London’s Hyde Park Gardens which is up for sale at £300,000. That’s about twice the price of the average house in England and Wales and you don’t even get a roof over it. But I suppose you could live in your car.
Meanwhile Eric Pickles, Conservative Secretary of State for Communities and Local Government has stuck the knife into the efforts of Labour-controlled Nottingham City Council to reduce car congestion caused by Commuters. Their initiative was to levy a ‘workplace parking tax’ on Employers who provide parking for staff. This has proved unpopular with local residents as the £334/space charge is usually passed straight onto workers who not surprisingly park along residential streets instead.
Rather than helping tackle congestion” Eric said, “ it is clear that the Labour Council…is doing more harm than good, by clogging up the roads and causing parking problems to spread.’
At the same time he launched into those Councils who charge residents for allowing them to rent-out their driveways for Commuter parking. This is a growing business in London but because it involves a so-called Change of Use from residential to commercial it requires approval under town planning legislation. You might think adding extra parking spaces would reduce congestion, but experience suggests otherwise. The Department of Transport recently admitted that building new motorways doesn’t reduce traffic congestion but simply encourages more motorists to use the new ‘uncongested’ roads. Providing extra carspaces simply encourages more people to drive into town and does nothing to reduce congestion.
So Nottingham City is now considering on-street parking charges (residents can park for free) with all the associated cost of machines, enforcement staff, Traffic Regulation Orders, signage and roadmarking etc. They could have opted for the CCTV-controlled roadcharging as used in London but it’s far too expensive to implement and the ‘workplace levy’ was seen as an affordable alternative.
The congestion on Nottingham’s residential streets has been worsened by works for their new Tramway system, part-funded by the levy. Theory says this is the right long-term solution i.e. make public transport cheap and plentiful whilst removing parking spaces – but in the meantime the Council needs to pay for parking enforcement and the capital cost of public transport. The wages of Parking Pataweyo and his enforcement mates can be replaced with the questionable practice of using CCTV cameras but then you get into all the arguments about “I didn’t know I’d committed an offence until the letter arrived in the post” etc . The Traffic Penalty Tribunal (they handle appeals against parking tickets) thinks likewise and recently voiced their concern to the Parliamentary Transport Select Committee. Apparently only 1% of issued penalty notices are ever contested because motorists think it’s a waste of time so just can’t be arsed.
Eric had something to say about that as well. He accused many Councils of “bending the law to fill their coffers with taxpayers’ cash” - an accusation levelled against CCTV enforcement as well as many NHS Trusts. The latter have come in for a lot of criticism for charging all users of their carparks, not just visitors. Given that the NHS relies on day treatment centres to reduce costs it seems logical that patients should, at least get free parking. Macmillan Cancer Support runs a campaign with that objective. To support them go to http://www.macmillan.org.uk
One way or another we’re all affected by parking policy, even if you don’t drive. Having recently paid through the nose for hospital parking, a £30 CCTV parking fine and a £130 London Congestion Charge fine (don’t lend you car to your daughter) I’m not feeling sympathetic to anyone who complains about being charged £10/day to park their van next to the Market. My suggestion is: Blame the Commuters and tell customers that’s why your prices have gone up.