Crystal clear case for Crossrail 2 at London Infrastructure Summit

Business leaders highlighted their key asks of Government at this year’s London Infrastructure Summit – with Crossrail 2 and housing high on the agenda.

The case for Crossrail 2 is crystal clear – and business is firmly behind it. So said London First Chief Executive Jasmine Whitbread, calling for Crossrail 2 to be given the green light to proceed and not shunted into the sidings as initially happened with Crossrail 1 – comments picked up in City AM.

Crossrail 2 Managing Director, Michèle Dix reiterated that a decision is needed “pretty soon” to move Crossrail 2 into construction in the early 2020s and operational by the early 2030s. She noted how the line would contribute some 200,000 new homes and jobs and £150bn net GDP, while Transport Minister Lord Callanan highlighted how Crossrail 1 generated jobs and investment across the UK. Speakers were united on the need to invest in cities’ transport networks north and south.

Funding is now the main challenge facing Crossrail 2, and a wide range of additional funding options were discussed over the course of the day, building on London’s experience with the Crossrail 1 funding package. The need for further fiscal devolution, on the lines set out by Tony Travers and the London Finance Commission, was a common point.

Also championing Crossrail 2 was Mark Carne of Network Rail, who set out his vision for London’s rail network. This includes delivering £10bn worth of projects, including the Thameslink programme and Waterloo upgrade. Harnessing digital technologies will increasingly be key to keeping up with the demands of the modern customer.

Taking action to increase London’s housing supply was a central theme of the day. Deputy Mayor Jules Pipe emphasised housing as a Mayoral priority, with contributors across the day highlighting the importance of new transport schemes and wider infrastructure upgrades if the additional housing London needs is to be unlocked.

Brexit loomed over proceedings throughout, but came centre stage when London’s airports united to call for a deal on future air travel rights to be prioritized during Brexit negotiations. “Robust” transitional arrangements must be put in place that are both passenger friendly and cargo friendly (See City AM piece here). London’s airports also need government support for their individual growth plans and for improvements to surface transport links.

Broadening out the debate, Deputy Mayor Shirley Rodrigues presented the Mayor’s draft environment strategy. Making London cleaner and greener will require investment in our energy, water and waste infrastructure, comments echoed by speakers in the ‘future London’ session. Deputy Mayor Val Shawcross similarly set out the draft transport strategy, focused on the Mayor’s ambitions for ‘healthy streets’.

Bringing the day to a close were Lord Adonis of the National Infrastructure Commission and Transport commissioner Mike Brown. Lord Adonis urged delegates to avoid being distracted by Brexit and to focus on securing the investment in infrastructure that cities like London so badly need. He informed delegates that the NIC will be publishing their long-awaited National Infrastructure Assessment in Birmingham next month, accompanied by metro Mayors from the West Midlands, Greater Manchester and London.

Mike Brown struck an optimistic tone for London transport, while warning against complacency. Progress continued to be made in modernizing London’s transport network and in streamlining TfL itself, but big challenges remained ahead. Mike also emphasised the importance of getting daily performance right, revealing he sends a daily 7am email to the Mayor, No 10 and other key organisations updating on service performance across London’s Tube, rail and roads.

It was left to conference chair John Dickie of London First to bring the day to a close. John thanked all contributors and invited delegates to work with London First over the coming year to champion Crossrail 2 and housing, shape emerging Mayoral strategies and ensure delivery of key planned projects like the Heathrow 3rd runway.

See video here.

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Business welcomes a transition phase, but it isn’t the answer

Dr David Lutton, Executive Director, Policy

Natasha Ryan, Programme Manager, Brexit

After a summer with little progress on negotiations, we heard last week that the Government is ready to “intensify” Brexit talks with the EU. We have since also witnessed a ‘leaked’ document setting out a possible ‘implementation period’ or transition phase after March 2019. These are welcome steps forward, but over a year since the vote, business desperately still needs certainty.

Together with Lloyds Banking Group we have been trying to better understand how businesses have adapted their plans since the EU referendum, and whether a transition period would help them. Unsurprisingly, our survey by YouGov[1] showed that over half of businesses have faced negative effects from the vote to leave the EU. These have included putting investment and recruitment decisions on hold, revising supply chains and witnessing a reduced demand for products and services. Looking at specific sectors, IT & telecoms, retail, Finance & Accounting were hit the hardest.

Our survey showed that four in ten UK companies were positive about a transition agreement. Interestingly, fewer than one in five expressed a concern that it would have a negative effect but one in three did not think it would make a difference to helping their business planning. An agreement between 1-3 years was the most preferred timeframe, and should cover all elements of the existing EU relationship: freedom of goods, services, capital and talent, as well as a common set of tariffs and EU legal arrangement.

This is a good indication that business thinks a transitional agreement is better than a cliff-edge alternative, and that the net impact would be generally positive. However: it is still not good enough, as it does not provide the certainty about UK’s future relationship with the EU that business needs to plan ahead.

London is known for being at the top of the business league table, and government must quickly provide the certainty needed to keep us there.

[1] The survey ran from 7th – 18th August 2017 and canvassed the views of senior business decision makers from 1036 UK firms with turnover <£1m

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Business split over benefits of a Brexit transition period

  • 40% expect a positive impact but one in three unsure it will help them make decisions
  • Transition agreement needs to be in place by June 2018 to realise benefits
  • Most businesses want a one to three-year transition phase

Four in ten UK businesses believe a transition period after the UK’s exit from the EU will have a positive impact, enabling them to unblock investment and recruitment decisions that they put on hold after the Referendum, according to a new study from London First and Lloyds Banking Group.

Most businesses want to see a transition arrangement that covers all the elements of the existing EU relationship – freedom of goods, services, capital and talent; a common set of tariffs and EU legal arrangements.

London First and Lloyds Banking Group surveyed over 1000 UK companies with an annual turnover above £1m.

Many firms feel that last year’s referendum has had a big impact on their businesses. Over half (54%) said they had either been forced to put investment or recruitment on hold, revised their supply chains; or faced reduced demand from their customers.

When asked how long a transition period should last, the most frequently given answer was one to three years. The timeframe in which it was agreed was seen as important too, with one in five (21%) saying a transition agreement needed to be in place by the end of the year and a further 22% of respondents saying they needed it by June 2018.

Companies with an annual turnover of £750m or more were the most positive about a proposed transition period, with nearly half (47%) said it would help their business, compared to 35% amongst SMEs1.

Only 18% of respondents to the London First and Lloyds Banking Group survey felt it would have a negative impact.

But a significant proportion of companies, over one in three (35%), felt the promise of a transition period would have no impact on their ability to make decisions and plan ahead.

Jasmine Whitbread, chief executive of business group London First, said: “It’s clear that a transition period is better for business than ‘no deal’. But to encourage continued economic growth and secure jobs, the Government must act now on a transitional agreement while setting out what the UK’s long-term future will look like. Companies need to be able to see ahead to invest in and hire for the future, we can’t afford to wait much longer.”

Edward Thurman, Managing Director and Head of Financial Institutions, Lloyds Bank Commercial Banking, said: “The findings of the survey reinforce what we already know from conversations with many of our business, corporate and institutional clients. Many firms feel a transition period would help them to prepare for Brexit, and the sooner the UK and EU27 agree terms, the less uncertainty for businesses there will be.”

YouGov polled 1036 UK businesses between 7-18 August 2017. 468 respondents had an annual turnover between £1m-£24.9m; 316 between £25m and £749.9m; and 186 above £750m.

1 Companies with an annual turnover between £1m and £24.9m

A pdf of the report is available here

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Are you being served? The future of retail

 

Matthew Hill, Programme Director – Hospitality, Retail & Leisure, London First
Retail has seen some fundamental shifts over the past 15 years: The explosion of online shopping; the ongoing decline of the local high street; cost-polarisation; the rise in destination shopping and experience; the expectation of on-demand service and delivery; the blurring of hospitality and retail, and a shift from large outlets to convenience formats.

These are challenges which are being experienced around the UK, but London is different. Adoption of new technologies by consumers is quicker, their shopping and lifestyle patterns are different, and the ownership of infrastructure is complex. London is a laboratory, testing ground and early adopter for new trends in retail. We’re also a destination for shoppers from across the UK and around the globe.

The impacts of this change are felt by the private and public sectors alike. Retailers have to invest in transforming physical infrastructure and supply chains into formats which meet the demands of modern, mobile shoppers. While the city has to deal with greater delivery traffic on the roads and conflicting planning needs. In particular the need for London to build more homes for its growing population places pressure on retail space, as well as pricing many employees out.

So, let’s assume that all the predictions for the retail, stores and high streets of the future come true. Everything from frictionless payment and collection points at tube stations, through to delivery drones and AI shop assistants. What needs to be done now to enable change to happen and keep London ahead of our competitors?

In order to get to the bottom of the question, London First will be holding a series of workshops with members. We will look at the particular challenges and opportunities of retail change in London, and the needs of business, BIDs and Boroughs to manage that change. We’ll explore some of the great work already being done locally and how that can be scaled up to best-practice across the capital, plus any further interventions or policy change needed on a pan-London basis. Our recommendations will also feed into the London First Skills Commission and our representations on the London Plan and Brexit.

On Monday 18th September, we’ll be kicking off with a panel event and discussion around the areas we should be focusing on. London is a platform, and if retail businesses want to keep selling on that platform, where does it need to improve to strengthen its offer? Tech infrastructure? Skills? Roads? Public realm? Planning policy?

Please join us for that discussion, led by an eminent panel, including: Julie Carlyle (Partner and Head of Retail, UK & Ireland, EY), Laura Wade-Gery (now British Land, but an alumnus of Tesco and M&S), Robin Mortimer (Director of Retail Property at Hammerson) and Eva Pascoe (eCommerce pioneer and Digital Strategy Director at The Retail Practice).

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London -the city of renters

Jonathan Seager – Executive Director, Policy, London First

London is about to become a city of renters, with the number of people renting in the capital due to overtake homeowners by 2025. London must therefore take a long-term and strategic approach to providing Londoners with a better choice of rented accommodation. This is where build to rent comes in – it can deliver stable, long-term investment into high-quality new homes, designed specifically for the rental market.

There has already been significant growth in the sector, but with the full support of local authorities build to rent can dramatically boost housebuilding in London. This is why London First has partnered with London Councils and Turley to produce Everything you need to know about build to rent in London. The report provides Councillors and officers in London government with an overview of the emerging build to rent sector; its designed to be a quick and easy read and a resource that can be used to engage with boroughs about why build to rent offers benefits to their local areas.

The report sets out why build to rent is relevant to London and the many housing challenges the city faces, the benefits that such development can bring such as helping to increase housing supply, and an explanation of key issues that boroughs will need to consider when thinking about build to rent schemes in their areas.

There is no simple solution to London’s lack of housebuilding – increasing supply requires action on multiple fronts. This means, amongst other actions, building at higher densities to make the best use of land, using new transport infrastructure as a catalyst to unlock more housing development, and introducing a coordinated approach to identifying and releasing surplus public land for housing. London First is currently working and campaigning across all these areas and more to create the right environment for London to increase housing supply to keep the city competitive.

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