All shapes and sizes

When is a corridor not a corridor?  When it’s an arc. What’s the difference between a cluster and a hub? Nothing material.

The terminology used to characterise what’s going on in any one area of our eastern region serves only as useful shorthand. What matters is what is actually going on inside this corridor, arc or even valley. And the past summer has seen some action in this regard.

The London-Stansted-Cambridge Consortium has been focusing on how the devolution of powers could contribute to pumping-up and serving the growth potential of this corridor to and from London in the coming 20 years.

The London School of Economics (LSE), in suggesting a serious review of the Green Belt around London, referenced the London-Stansted-Cambridge corridor as a pilot for the LSE’s idea of complementing growth corridors with green ‘wedges’ as part of a new view of the Metropolitan Green Belt.

Meanwhile the National Infrastructure Commission (NIC) – which was launched last November – sees a corridor of growth between Cambridge, Milton Keynes and ‘the Other Place’: Oxford.  With a focus on the disjointed road and rail connections between these three key locations, the NIC is charged with recommending improvements and solutions that will assist in supercharging transport links to reconcile the two old and the one new city.

Taking Cambridge alone, the ‘growth but where?’ debate has continued over the summer – and will doubtless do so well in to the coming if, somewhat stalled, autumn season.  The City Deal has been considering how best we can transport the current and future population of Cambridge through and around its historical, geographic boundaries.

All these august bodies are taking a strategic view for future growth. Meanwhile, over the summer, growth is actually going on with new development either rising up out of the ground or taking firmer shape through the planning process.

A round-up of summer site action reveals housing as key to unlocking support for developments on a number of projects.

Jesus College’s proposal for a new business park ‘Cambridge South’, on the city’s southern fringe by the M11 motorway, includes a significant housing element.

A new sporting village in Trumpington – promoted and proposed by Grosvenor Estates - includes plans for 520 new homes, of which over half could be built in the coming five years.

Plans for the re-purposing of Waterbeach barracks as the basis for a new settlement - on the same lines as Northstowe - have moved a step forward over the summer.  Homes for occupation as early as 2019 are being mooted by the promoting developer, Urban & Civic. 

Meanwhile over at master developer Gallagher Estates’s Northstowe, housebuilder Bloor is on schedule for completions on the first phase of brand new homes in early spring 2017.   The school building at Northstowe has had life breathed in to it this autumn term by primary school pupils from nearby Longstanton whose own school is being extended and renovated to cope with a growing roll-call in the catchment area.

And, as schools returned, Brookgate revealed its plans for homes as part of a mixed use’CB4’ development to complement the new railway station at Cambridge North.

Perhaps the biggest of all the summer developments front – although without a residential housing element - was the granting of outline planning consent of the second phase of 23 acres at the Cambridge Biomedical Campus.

Call it a cluster a hub, an arc or a corridor, this summer has seen the next chapter in the history of this ancient city and its sphere of influence take shape.

Will Mooney MRICS
Partner
Commercial, Cambridge

The push me-pull you summer

Whether you think of the ‘pushmi-pullyu’ creature as a gazelle unicorn hybrid which featured in the original Dr Dolittle book series or the two-headed llama of the 1960s’ musical film starring Rex Harrison in the leading role, you will be aware of the frustrating existence with which it had come to terms.

Having one head for eating and one for talking has obvious advantages in terms of a productive use of its time but in having two sets of legs facing in opposite directions, the creature ended up going nowhere of its own accord.

It has been a pushmi-pullyu kind of summer even after the post-Brexit political flurry of the governing party’s internal and cabinet politics settled down. As an aside, the tug-of-war of words among Her Majesty’s Opposition continues but, for the time being, appears to have little influence on the wider national and international stage.

Brexit means Brexit but there are many Brexit options it seems. Will it be a buffet Brexit where we can help ourselves or will it be the set menu? Will we be Brexiting à la carte or just having the lighter, continental option? All of us in business just want to know what’s for Brexit soon please so that we can get on and plan with a degree of certainty for the next couple of years, at least.

The work that the Bank of England has done - and can carry on doing - to encourage the economy to take off is widely acknowledged as coming to the end of the runway. Monetary policy is about as loose as Governor Carney and his advisors can dare make it and they aren’t the type of people to wing it. While our central bank’s latest round of action nourishes the banks and, to some extent, the financial markets, it can only do this for a limited amount of time.

All eyes then are on an early Autumn Statement from Chancellor Hammond who, it has been heavily hinted, will use the opportunity to ‘reset’ the previous administration’s economic priorities and fiscal targets. So we face forward with bright eyes and a bushy tail in anticipation of this.

There appears to be a dual-headed approach to doing business with China and this has happened all of a sudden, apparently. Day-to-day deals are being done and are to be encouraged between British and Chinese businesses. Luckily for us, Chinese investors still appear keen to invest in British research and development, technology, companies and property.

Yet, at the eleventh hour, the new UK administration has gone on a summer retreat for some quiet contemplation about Chinese firms financing of over a third of the investment required for the new Hinkley Point C nuclear power plant.

Quite a surprising volte face from the pre-24 June administration’s position. So surprising, that Lord (Jim) O’Neill who, as a Treasury minister tasked with building relations with China as well as UK infrastructure development, wasn’t even pre-warned of this re-assessment of the situation by the new administration. 

There is one view abroad – and at home – among some commentators that the UK’s value to China was or is because of access to trading with the EU.  What the the utility company Électricité de France (EDF)will make of the new view of Hinkley Point development remains to be seen.

Nobody trying to do business likes surprises. But surprising things happen which make for good business. Just look at the phenomenal success of Pokémon Go this summer.
Some pokémon can speak human languages but imagine, much like Dr Dolittle, if we could talk to the pokémon, learn their languages? Think of all the things we could discuss.

Will Mooney MRICS
Partner
Commercial, Cambridge

Don’t frighten the horses

Commercial property rarely makes for mainstream headline news and we’re thankful lfor that as we quietly get on minding our own and our clients’ business. We occasionally stick our head above the parapets at either end of the year with the annual round of reviews and forecasts but that’s about it.

At the outset of this year, commercial property professionals and pundits were in broad agreement that yields had most definitely peaked and that the volume of transactions we’d been enjoying were unsustainable and that total returns were set to fall – my own firm pegged the fall to 8.8 per cent. So far so predictable in Q1 and Q2 2016 then.

However, before the third quarter of the year had properly got underway, commercial property came crashing in to mainstream media headlines for five days in a row and not in a good way. I say ‘commercial property’ but what actually made the news was the suspension and closure of a number of funds which were invested in commercial property.

It was the funds that were falling down, commercial property is still standing. Alongside other property interests, thankfully. Expert property commentators and analysts were - and still are - at pains to point out that a commercial property fund is an investment vehicle and one not for the faint-hearted either. In the close world of any niche investment funds, it is easy for contagion and a herd mentaility to take hold.

Investors in all sorts of funds are getting spooked and some of those whose portfolios include commercial property funds are wanting to liquidise their investments and move on to other funds and other asset classes. Commercial property investment fund managers were left with little option but to suspend the funds while they sell the asset. It can take a long time to sell an office block, business park or a retail outlet, believe me.

The thought of Brexit has, understandably, made many people twitchy – just look at the pre-poll rock solid political careers it has ended but now some new careers have begun too. While the matter of the prime ministerial succession and the timescale has been settled earlier than first assumed, the financial markets reacted to uncertainty.

In those first weeks post-24 June along with the value of sterling falling, FTSE companies most exposed to UK business interests saw their share price drop more than those with more international exposure. There was much mention of housebuilders’ shares falling as if this was proof of a mass property Brexodus.

To make a connection between the closing of commercial property investment funds and a potential housing market crash á la 2009 is crass but some reporters whose business is not, ordinarily, the reporting of business can be forgiven in not appreciating the very clear distinction between commercial property and residential property.

Investors in the housing market in the UK are, in the main, those who live in their investment. The forces driving commercial property investment funds are very different from those governing the housing market, namely a fundamental shortage and a low interest rate environment in the case of the latter.

The economic and financial expert view is that whereas the credit crunch of 2008 and 2009 was a financial crisis with political ramifications, what we are experiencing now is quite the reverse.

Setting aside on what the actress Mrs Patrick Campbell was commenting when she said it, I am minded to agree with her when it comes to the present situation: “My dear, I don't care what they do, so long as they don't do it in the street and frighten the horses.”

Will Mooney MRICS
Partner
Commercial, Cambridge

The beauty of the binary

Leave or remain?  In or out?  Left or right?  Right or wrong?  Good or bad?  Sooner or later?  Clinton or Trump?  The complexities of modern life require more consideration than a binary choice can ever do justice to. Yet so often we allow ourselves to be seduced into making a choice of ’either/or’ when presented with one.After all, there is a 50:50 chance of getting right or wrong and many yearn for a balanced approach.

July sees the Democratic and Republican national conventions where the presumed candidacies of Hilary Clinton and Donald Trump will be endorsed, respectively, by each party’s delegates. The nature of the final stage of the race for the White House is usually a binary choice.

There is nothing to stop an additional party candidate but, historically, any third party runners have acted as mere spoilers. Yet there is a considered view that 2016’s ‘spoiler candidates’ from, perhaps, the Libertarian Party and the Green Party could be influential in attracting votes away from the two main protagonists and affect the outcome of the November poll.

It is also assumed that foreign policy wise, the two likely candidates will pursue quite distinct approaches upon occupying the Oval Office.  Put lazily, one will pull up the drawbridge -  if not build a wall - to shore-up a protectionist stance and the other will be interventionist in a more obvious way than the 44th president has been.

Again, it seems like a choice between one way or another but the duties incumbent of the role of Mr or Madam President as the head of state, the head of government and commander-in-chief of the armed forces make for a more complex approach to policy making, thankfully.

What foreign policy commentators do seem to agree on is that the 45th President of the United States of America needs to decide whether or not he or she wants to see the USA continue in its role as the world’s ‘policeman’ – a role occupied after 1945.

Back then there did seem to be a binary choice between two powerful, opposing forces: communism and anti-communism.   But since the demise of the Soviet empire, things have, even on the surface, become more complex and there are certainly more than two forces in play when it comes to powerful nations with global ambitions.

The same commentators feel that if the USA is to retire from its policeman role then it needs to make it plain to the rest of the world sooner rather than later.  Some policy experts feel it is now time for the USA to become part of a new constabulary force.  Either that or it is going to have to carve out its new post-retirement identity and make plain its attitude to any new recruits who are rising up the ranks.

In terms of military, diplomatic and commercial clout the USA’s pre-eminence endures.  Whoever is inaugurated next January will have to make more than two choices about what to do with all that power, that’s for sure. It’s not a case of use it or lose it because it’s always likey going to have it.

High up on the new president’s ‘to do’ list will surely be what to do with its transatlantic cousins who live in an increasingly fractious if not fractured Europe.

Who would have thought that just having two options would make things so complicated?  A binary choice in some affairs is just too, too simplistic.

Will Mooney MRICS
Partner
Commercial, Cambridge

The inbetweeners

Eighteen months ago in this column, I wrote about a sense of ‘our ping-pong recovery’. At that point too, I harked back three years to 2011 when I was advised that ‘being on the brink was the new normal’.  Round about that time in 2011, there was an Internet meme in popular circulation that took its cue from Charles Dickens’ novel, ‘A Tale of Two Cities’ in representing the world view according to the author as a Venn diagram.  The left set read ‘The Best of Times’ and the words in the right saw ‘The Worst of Times’.  In the intersection was one word: ‘It’. 

Perhaps we always inhabit the inbetween space. Yet sometimes our awareness of occupying the ‘It’ space is more acute than others -  especially if we put individual company achievements andthis region’s business success in the same pot as those on the national and international economic scene before divvying them out in either set of the Venn diagram.

May be there are more than two sets required if a Venn diagram is to potray the confusion of the most current voices of economic comment.

We had the International Monetary Fund (IMF) who, while acknowleding that oil prices are rising again, is warning of the implications of oil’s long term decline and the diastrous effect on Middle Eastern economies.

Then a couple of days later, those members of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC - but still oil producing – countries met in Qatar and, while indicating the majority’s willingness to impose an oil production cap, could not agree on a freeze given the frosty relations between two key players. This gave a shock to world stock markets the day after but a lower - but steadily so- oil price is something with which the markets are coming to terms. They certainly appear to be more tranquil at the start of the second quarter of 2016 than they were at its first.

China’s latest quarterly growth figures were, fortuitously, within its government’s range at bang on 6.7 per cent as many commentators predicted and welcomed.  However, this was down on the equivalent period last year and the lowest figure since Q1 2009.

Talking of 2009 and back to the latest IMF world finance health check, it has concerns that some of the ‘legacy issues’ which caused the 2008/2009 banking crises have not been addressed.  In particular, the substantial loans still languishing in the books of some Eurozone banks and which are unlikely ever to be repaid.

In another back to the future leap, economic commentators referenced the eminent economist, Milton Friedman who, in 1969, spoke of a monetary policy theory called ‘helicopter money’.  Boiled down in essence for us lay people, this theory sees central governments, through their treasuries’ instructions to their central banks, printing money enabling the governments to drop it directly on their populace of spenders – through tax cuts or increased public spending– rather than channelling it through the banks.

Helicopter money bypasses the banks to stimulate economies in the way quantitative easing (QE) doesn’t.  While some commentators see the case for helicopter money gaining ground, particularly with political advisers to central governments, others would prefer to see it remain within the covers of economic text books.  In any case, it is pointed out that the Eurozone countries do not have one central treasury to issue an instruction about Euro-printing.

On the domestic front, there appears to be consensus that the ‘self-inflicted wound’ of the EU referendum is unhelpful, at best, to the UK economy until it is resolved.  More on that story later, as the saying goes.

Will Mooney MRICS
Partner
Commercial, Cambridge

Monkey business

The Chinese year of the monkey runs from 08 February this year until 27 January 2017. On the evidence of how the non-Chinese new year has started, we would all be wise to adopt the traits of those born in the year of the monkey who are said to be smart, wily and vigilant.

The geopolitical and economical headwinds of the end of last year have only gathered momentum in the first two months of the Gregorian calendar’s 2016 and we’re advised to batten down the hatches.

There has been a spate of worrying economic stories.  The announcement in early February that Yahoo is to cut 15 per cent of its workforce following losses of over US $4 billion came on the same day that Ford confirmed job cuts in the UK and Germany in a bid to save US $ 200 million per annum.  

While Yahoo’s situation could be pitched as the inevitable digital shakedown, Ford’s focus is raising alarm bells. 

News that the cost to insure Deutsche Bank’s debt had risen by 182 per cent in the previous three months and its immediate share price collapse of 40 per cent in the wake of the announcement followed the Yahoo and Ford bad news day.  While Deutsche Bank announced later in the month that it was to buy back US $5.4 billion of its debt saw its share price recover a bit, it has done nothing to silence those bells ahead of the UK banks’ results reporting season which is underway.  

Oil continues to occupy the headlines among the cacophony of economic bellwethers. The vocabulary of the current oil crisis is yet to echo the style of the crises of 1973/4 and 1979.  In the early 1970s, the crisis saw a rise in the price of oil following OPEC’s embargo on supply to the West and Japan. While in 1979, a panic about the potential for a drop in supply after the Iranian revolution artificially drove up the oil price.  Now, the controlled over-supply of oil has seen the price nosedive and the stockmarkets shudder.   

While a low price for oil is good for consumers, it’s bad for those states whose sovereign wealth or whose credit worthiness is based on the production and consumption of oil.  It is also bad for those financial institutions who have counted on the positions of those nations not being what they are now. It may well end-up bad for consumers should these new positions become entrenched.

On the domestic front, it can only get noisier as a re-negotiated EU agreement does or does not play out with UK voters and businesses ahead of the in/out referendum.

In the property world, many investors and occupiers might well delay their decision-making pending the outcome of the EU referendum. This will have an impact on sentiment and activity the nearer the vote draws.  

UK plc will survive whatever the outcome. Thankfully, it will still offer one of the most transparent and sophisticated property markets in the world and, as HSBC’s announcement to retain its HQ in our capital city affirms, London remains a global financial centre, not just a European one.

Will Mooney MRICS
Partner
Commercial, Cambridge

The Fed awakens our interest

And so it came to pass that in the mild mid-winter, the US Federal Reserve did increase its interest rate as expected last month. It follows neatly that January, in taking its name from the god of new beginnings and transitions in Roman mythology, the developed economies are coming out of an old and in to a new phase but in what direction this will take interest rates this side of the pond remains to be seen - probably at some point later this year, according to Mark Carney’s latest pronouncement.

In the arc of history, the near-decade since the Federal Reserve last raised interest rates in 2006 is not so long a time. But the rate rise has certainly signalled a new phase, if only psychologically, according to financial commentators.

Some commentators see this new phase as a return to the old ways in which central banks’ main power was to use their interest rates as a controlled response to conventional domestic economic pressures such as inflation.  

Others point to the fact that the ‘norms’ of convention no longer apply when it comes to domestic interest rates in the post-2008 global economy where the European Central Bank (ECB) maintains negative interest rates and in economies which are smaller and much more open to that of the US.

What there does seem to be broad agreement on, however, is that more importance is attached to what the Fed rise signifies and what it might trigger than the numerical impact of the rise (to 0.5 per cent from 0.25 per cent).  That being the slow and controlled rise of rates away from a low interest rate ‘experiment’ by developed economies at some point in the coming 18 months.

Only time will tell on that matter. However, what just the anticipation and the Fed’s rise did trigger in the UK was consideration of the Bank of England’s position under the governorship of Mark Carney.  There was much scrutiny of the Bank’s hint in July last year that it might raise interest rates by 2015’s end when it failed to follow-through, chiefly because the inflation target of 2 per cent had not been reached.

It is a different kind of Bank of England under a different governor now than the one which accompanied us into the global financial crisis of 2007/2008.  

With abolition of the Financial Services Authority in 2013, the Bank assumed more regulatory powers which remain focused on, and exercised by, the robustness of our banking system.

As the Fed was raising its rate, the Bank of England was concerned about the indebtedness of the buy-to-let residential property sector. While reminding UK lenders of its powers to act on any kind of lending it considered too risky, it clearly signalled no immediate rise in interest rates in the first part of this year.

Next year, 2017, will mark 20 years since the newly elected Labour government of that May day cut the apron strings and gave the Bank of England its independence from political control by any government of any day. On that same day, Chancellor Brown raised the base rate by a quarter of a point to 6.25 per cent. 

We have all come very far in 20 years and it’s been a turbo-charged journey in the past eight. 

Whether the Fed’s rate rise marks a return to the old days of central banks using interest rates to control key elements of their economies or it heralds the start of a ‘new new’ remains to be seen.  However, as we start this new phase, may the Fed and all central banks be with you and your business interests in 2016 and beyond.

Will Mooney MRICS
Partner
Commercial, Cambridge

Compass points enterprise zones towards 2016

In the recent round of identification and designation of new Enterprise Zones (EZ) – announced by Chancellor Osborne at the end of the last month -  there are no fewer than 15 locations in Cambridgeshire, Suffolk and Norfolk. One of which, Haverhill Research Park, is claimed by Cambridge but is actually in Suffolk. All of which, to varying degrees, property agents in the patch have substantial interests either directly as an appointed advisor to the development or an occupier seeking premises or, indirectly, in working for the owners or current or potential occupiers on nearby sites, estates or Parks in the pipeline or already established.

The LEPs in this region – the Greater Cambridge Greater Peterborough Enterprise Partnership which delivered the 5 sites which comprise the Cambridge Compass Enterprise Zone area and the New Anglia Local Enterprise Partnership which succeeded in not only making the case for creating 10 new EZs in Suffolk and Norfolk under the Space to Innovate banner, but also in the extension of the current Great Yarmouth & Lowestoft (New Anglia) Enterprise Zone – have done more than a fine job in achieving these zones in the region.

Coming together in partnership with business and other local interests, these LEPs have successfully navigated the labyrinthian corridors of Whitehall to make the regional and local business cases to the national civil servants and government advisors who hold the purse strings when it comes to the creation of EZs and other sources of central funding.  

Anyone who has ever tendered for projects involving public money – whether professionally, many agents have dedicated teams to work in public sector projects and those which have to access public funds, or in a more civic or social role – can have nothing but praise for what the LEPs have pulled off for the eastern region.

But the plaudits shouldn’t stop there. Because while each LEP’s remit and accountability extends to its own area, technically, collectively the emphasis of each of the new EZs in playing to the attributes of each locale forms a chain of EZs which gives a complete picture of our region.

For instance, two new EZ locations in rural north Norfolk will have energy and the low carbon sectors in their sights. Whereas, one in King’s Lynn has agri-tech and food production at its core.  Equally, some of the new EZs in Suffolk play to the strengths of the ports and the A14 in positioning logistics and the supply-chain sectors. 

The Cambridge Compass Enterprise Zones gives 5 former fringe locations a chance to capitalise on the ‘Cambridge effect’ in terms of employment opportunities with 2 – Cambourne Business Park and Northstowe Phase 1 pointing the way forward in co-locating homes and jobs.

These new EZs come in to effect in spring next year (2016) and while I am no archetype Pollyanna, I welcome the way these will help point a way forward for this region which is far from inward looking in having Felixstowe port as the gateway to the rest of the world.

Will Mooney MRICS
Partner
Commercial, Cambridge

The hokey cokey referendum

We’ve now entered what commentators are calling ‘a phoney war’ in what could be a two year long run-up to the referendum on European Union (EU) membership which is to take place before the end of 2017.

Unlike the 2014 Scottish Independence referendum, the question on the ballot paper won’t be ‘Yes’ or ‘No’. It will be ‘Stay’ or ‘Leave’.

The campaign groups don’t fall in to the convenient polarities of pro-business versus anti-business or the political groupings of left and right and so, we,  the electorate are not going to be allowed to be lazy in our thinking about this referendum and the consequences of its outcome. 

It is a referendum which will see voices of business line up on both sides and some, in all likelihood, stuck in the middle seeing convincing commercial and policy arguments on both sides.  

It’s not just any old referendum either. It’s a referendum in which the ex-boss of Marks and Spencer, Lord (Stuart) Rose is heading up the ‘Stay’ campaign.  The complexity of the issues is reflected in the make up of the ‘Go’ camp which has two main campaign groups in profile: ‘Vote Leave’ and ‘Leave.EU’. All three groups got under starters orders in October.

‘Vote Leave’ sees formal Conservative and Labour ‘Brexit’ groupings come together in an umbrella membership which hosts individuals with UKIP credentials too. ‘Leave.EU’ positions itself as a more grass-roots movement and the financial sector experience and entrepreneurial business-chops of its ‘ambassadors’ are showcased on its website’s home page.

Confusingly - and refreshingly - both ‘Stay’ and ‘Leave’ are happy to admit to being the patriotic choice. It is to be hoped that the absence of jingoism in the course of the pre-vote debate and the actual ballot itself remains because the presence of national stereotypes does nothing for the clarity of thought we require in making our decision.

At this early stage of the publicity campaigns, there appears to be an absence of ideology too with more of an emphasis on pragmatism. Upon launch, Lord Rose was keen to highlight that the ‘Stay’ campaign was critical of the European Union and voting to remain in the EU was the best way to reform it for the good of the UK.

Leave’s arguments point to the benefits and flexibility of financial and policy independence in the modern world pitted against the inflexibility that being in a single currency imposed on countries like Greece in dealing with the fall out from the financial crisis of 2008. In making the case for Brexit, some free marketeers point to the fact that Euro currency countries could not make their own sovereign case to the International Monetary Fund (IMF) to re-finance debt which might have set them in better stead to weather their stormy financial situation.

While shaking it all about when it comes to Britain’s future, this referendum campaign is also stirring up times past.

The 1975 referendum to stay or leave the European Economic Community (EEC) brought together some strange bedfellows in Prime Minister Harold Wilson and the Leader of the Oppostion, the Rt Hon Margaret Thatcher MP backing the ‘Yes’ campaign.  While supporters of internationalism – which, at the time, included high profile members of the Cabinet in Tony Benn and Michael Foot – were opposed to remaining in the EEC.

Plus ça change, plus c’est la même chose as the saying goes.

Will Mooney MRICS
Partner
Commercial, Cambridge

Keeping it real about AI

So much focus in the news on artificial intelligence is far from droning on, believes Will Mooney, Carter Jonas partner and head of commercial in the eastern region

It is incumbent upon any professional adviser to have an understanding of their clients’ business. Those with clients in the technology sector, acknowledge that the speed of change means they are always going to be learning something new. 

The latest technology to intrigue me is Artificial Intelligence (AI).Like many, I do get the basic concept but what’s more tricky is understanding its wordly application and how, in the not too distant future, this might affect my working, domestic and social world.

I could say that understanding AI is above my pay grade, so to speak, but perhaps, one day, an AI-primed robot my be on my pay grade instead of me. Time will tell. But surely all of us with enquiring minds, operating on any pay grade, must be wondering about the the impact that AI is having -  and will have -  on the working world within our life times.

Like most technological developments, AI and its attendent world of robotics once sat in a comfortable package with drone technology in having their roots in governments’ defence spending before coming in to civil use.  As did the first usable prototype of the Internet and look how far down business civvy street that had travelled from the mid-1960s by the mid-1990s.

With drone-eye views of large properties, sites and country estates fast becoming the ‘must-have’ tool in the property agents’ marketing armoury, I can’t help but wonder what mundane but essential jobs in my industry could be happily handed over to an office robot.

It’s been suggested that in the legal world, robots could take on the job of legal executives in checking all is in order on page after page or screen after screen of contracts and agreements.  Whither the legal exec then?

The consensus appears to be that it is jobs in the creative industries which are at least threat from being undermined by AI technology. However, do bear in mind that the people relaying this message are in the media – one of those creative industries.

Far from being a threat to jobs, there are those involved in the world of AI who see their work as freeing up people to do what humans really are good at: being creative and, well, being human. Taking this line, it’s easy to follow the argument that industrialisation has shackled us humans and made machines and drones of us. We do more than be.

In a delicious and ironic twist, perhaps the robots we make and the intelligence we equip them with will free us up to re-discover what the essence of being human is?  This latter point was made with alacrity in a recent interview by Eric Horvitz who is the Director of Microsoft Research’s Redmond laboratory in Seattle.  

The more cynical members of the human race than this esteemed scientist and scholar can’t help but wonder if discovering the essence of our species isn’t a more threatening thought than that of having our jobs done by robots...

It may be that, one day, my job can and will be done by a robot.  But no matter how advanced its intelligence develops to replicate or exceed my own, I do wonder if it will ever share a gut instinct about a deal or the visceral delight and sense of achievement when the deal is sealed.  There’s definitely nothing artificial about those feelings.

Will Mooney MRICS
Partner
Commercial, Cambridge

Busy doing something

It’s off to work we go this summer, according to Will Mooney, Carter Jonas partner and head of commercial in the eastern region, as he considers the difference between being in business and being productive

It is a truth universally perceived that nothing happens in the summer months. It is, apparently, a ‘slow news’ time. Great. So there’s nothing going on in Greece, Syria, Turkey or, closer to home, with welfare reform or the Labour Party’s leadership race that’s been worth reporting or commenting on during July and August will see little of substance to report either? If only it were so.

Clawing back from the weighty economic and political scene, I know that with the exception of a two week break away from the office – but not work, necessarily - my summer will continue to be as busy as the rest of my year and as so it is for most business peers.

But is being busy the same as being productive?

Not if recent reports hold true. The UK’s productivity levels are a fifth lower than the G7 countries’ average. In a post-recession position this should not be the case, it seems. Some commentators point out that the recessions of the 1980s and early 1990s burst forth in to a time of increased productivity, fuelling innovation and growth.

At this point, we have to acknowledge our fortuitous position in the East of England in being a location where innovation is the main driver of business activity - whatever the wider economic picture.

The UK economy is acquiring form for underperformance. Called the ‘productivity puzzle’, there are ongoing efforts to try and unpick the reasons why.

One strand involves the examination of the methodology and definition of ‘productivity’. In an age where much business is based on knowledge, data and information in providing services, it may no longer be credible or useful to measure ‘productivity’ in the way it can in economies where industry and manufacturing dominate.

Greater minds than mine are charged with considering how advice and services which, eventually, lead to revenue generation can be calculated and judged against conventional measures of productivity.

Indeed, is it even relevant to judge productivity in a complex world where social and business time and networks mingle? Many a coffee shop brainstorm session has brought forth an idea which, down the line, has resulted in revenue generation for many parties – not least the coffee shop owner.

How can we measure the contribution of the cappuccino to productivity? Yet without that setting and stimulant, the idea which eventually resulted in money being made might not have occurred.

It’s an over-simplification of the modern productivity puzzle but it illustrates the complexity of a business life away from a manufacturing setting where input versus output can be assessed more easily.

Another view of the puzzle suggests that the poor productivity can be blamed on quantitative easing (QE) and low interest rates.

This view argues that many businesses are only around post-recession because of the ‘easy money’ supplied by QE and the perpetuity of low interest rates. In to this mix comes the tolerance of lenders who, mindful of an atmosphere of bank-bashing, have been reluctant to pull the rug from under these unprofitable and unproductive businesses when they really should have done so.

In this view, as long as these ‘zombie companies’ have been able to service their debt, they have survived and have held back the natural innovation and productivity surges which should occur post-recession.

With the Bank of England, for the second year in a row, making mid-summer murmurings of interest rate rises in the not too distant future, perhaps August is a actually a good time to bury what will be bad news for some.

Will Mooney MRICS
Partner
Commercial, Cambridge

The business of America is our business

As the race for the White House in 2016 begins in earnest this summer with big hitting Republican and Democrat candidates lining up for their party’s nominations, Will Mooney, Carter Jonas partner and head of commercial in the eastern region, takes his cue from a past-President

In quoting the 30th President of the United State of America, it must be acknowleged that what Calvin Coolidge actually said in a 1925 speech was, “the chief business of the American people is business”. In being misquoted for the best part of a hundred years, the essence of what he said has remained true in characterising the clout with which the USA has dominated global relations, particularly those with Europe, for the past century.

Even when positions of international isolation and economic protectionism were taken by successive presidents after 1919, there were US treaties which looked to its Pacific and Central America interests and negotiations which resulted in several formal ‘payment plans’ so Europe could begin to settle its World War One debts.

Edging towards the Second World War in the late 1930s, saw Franklin Roosevelt attempting to move Congress towards an understanding of ‘collective security’. By September 1940, it authorised the spending of $10.5 billion on arming the nation and, in the first quarter of 1941, the Lend Lease Bill was enacted which enabled Britain’s continued participation in the war. On 07 December that year, Pearl Harbour was bombed and isolationism was no longer an option.

The last repayment on the Lend Lease agreement was £45 million pounds and was made under the Blair government in 2006. Tony Blair wasn’t born until 1953.

When that post-1945 period of European history could still be called ‘modern’, any ‘O’ level scholar of the subject - and of the day - would be able to reel-off successive speeches and policies of the period in which the United States’ willingness and ability to be at the centre of things was crucial.

No longer the Prime Minister when he made it, Winston Churchill’s ‘Iron Curtain’ speech of March 1946 was made in Missouri in the presence of President Truman. In September that year, albeit in Zurich, Churchill referenced the creation of a ‘United States of Europe’.

NATO – the North Atlantic Treaty Organisation – is an alliance which stands to this day with considerably more member countries than its original set of north western European nations, the USA and Canada when the Treaty was signed in 1949.

Foreign policy wise for decades post-1945, ‘the domino theory’ prevailed in those countries who did not want others or themselves to succumb to European communism and the expansion of the Soviet Union and the influence of Chinese communism across Indo-China. It was President Eisenhower who gave voice to this as the policy driver in a landmark speech in 1954.

Crucial to backing up any policy position in any stage of history is economic might and, for the USA in the 20th Century, this was built on the supremacy of its industrial and business wealth. The £13 billion dollars’ worth of aid - worth circa £120 billion in modern times – made available by the USA in form of the 1948 Marshall Plan saw many European countries avail themselves of it in re-building and modernising after the Second World War.

As to what our ‘O’ level selves might have made of where we are now? Well, in writing an essay about the nature of the USA’s influence on the European and wider world stage in the first decades of the 21st Century, we would have to consider the importance of trade and aid and could argue the supremacy of the former.

Will Mooney MRICS
Partner
Commercial, Cambridge

Regions to be cheerful

Will Mooney, Carter Jonas partner and head of commercial and professional services in the eastern region, ponders the politics of the powerhouses.

The recent Budget statement acknowledged the potential of regional powerhouses and the considerable heft that economically successful regions contribute to the national and international performance of the UK.

Not before time. On the face of it, there appeared to be positive policy initiatives which could be good for the eastern region and spending plans for the kind of things for which this region – if you consider Cambridge as the heart of the hub - is known and recognised.

There will be £11 milllion to invest in new technology incubators to be channelled through Tech City UK – the government body which funds technology clusters. A £40 million pot will assist with research in to the ‘Internet of Things’ which, in his speech, the Chancellor rightly identified as the next stage of development in ‘the information age’.

Then there was the potential of a deal whereby 100 per cent of growth in additional business rates could be brokered for and kept by local authorities in areas like Cambridge, among others. This was described in the speech and in the subsequent media coverage as a ‘roll out of the Manchester model’ and a key component in formulating a northern powerhouse which sees Manchester and Leeds at the metropolitan heart of this hub.

Naturally enough, many in business in this region gave what is couched as a ‘cautious welcome’ to this and other elements of the Budget and for understandable reasons.

It is churlish to say it, but there has been a full-on eastern powerhouse for the best part of 20 years and does the powerhouse model, in modern times, really orginate in Manchester? We’re a long way from the heyday of the wool trade in which industrial Manchester was the centre of that economic power push.

Equally, one could argue that at a county level, never mind a regional level, there are issues of disparity and identity with which we struggle here in a way that a northern powerhouse might not. Although try telling that to the Houses of York and Lancaster.

In Cambridgeshire, there is a marked distinction between the north and south of the county; try lumping Ipswich in with Norwich and you won’t be popular; locations in Hertfordshire and Essex which border London have more in common with each other than their country or coastal county compadres. And whither Lincolnshire and Northamptonshire? Arguably, the former has more in common in its southern rump with north Cambridgeshire and the latter, a compatability with the Oxford corridor.

While government and civil service assistance to provide the broad policy and economic framework and infrastructure in which any region can seek to prosper is to be welcomed, it is questionable whether direct intervention - some might say interference - in trying to impose a regional identity and common cause is the best use of their time in the modern age.

After all, the latest detailed study of the genetic sources of the UK, has identified that there are 17 dominant genetic clusters which tend to reflect the de-facto, regional identities, not bureaucratic boundaries, within our nations. The largest of these clusters covers southern, central and eastern England and dates back to the the collapse of the Roman Empire when Angles and Saxons settled here.

Will Mooney MRICS
Partner
Commercial, Cambridge

Negative split times

Will Mooney, Carter Jonas partner and head of commercial and professional services in the eastern region, feels the economic recovery is now a marathon not a sprint.

No athlete myself, I am, however, familiar with runners’ focus – which can border on obsession – on their negative split times. My familiarity extends no further than knowing that, in essence, this means finishing a run faster than you started while acknowledging that there might be a sag in the middle.

Look at coverage of and comment on the Bank of England’s latest Inflation Report and it could be concluded that the UK is in that sag. We definitely started this post-recession recovery slowly and we gathered pace in the past 18 months. While we know we’ll get there in the end, the doom and gloom first glance coverage of the prospect of deflation is enough to bring the Eeyore out in any of us whose natural disposition doesn’t tend toward the Tigger at the best of times.

But the prospect of a fall in UK interest rates to the point of a negative rate was laid out in conditional terms by Governor Carney. Interest rates might fall but could rise and banking sector activity would suggest a tendency to expect the latter. Last year, we bemoaned the prospect of the rise of interest rates and many people adjusted their borrowing and spending accordingly merely in anticipation of something that has yet to happen or might not happen for a good while yet.

Financial markets don’t deal in something called futures for nothing.

The current weakness of the price of commodities such as food, oil and energy - as cited by the Bank of England – shouldn’t really be mistaken for debilitating deflation. What goes up must come down and vice versa.

Thinking of the pound in our pockets, may be deflation is not so bad for commodities in the way it is for consumer durables of which the ‘big television’ is used as shorthand. We might put off buying the new big telly but we only bought our old big telly back in the days of easy credit when consumer durables weren’t treated as durable because they were so easily replaced.

But look where that got us?

Day to day consideration of the wider UK economy can be troublesome for those whose business, professional and personal interests are rooted in this region which is so dominated by the success of Cambridge. The latest Centre for Cities report once again confirms the economic pre-eminence of Cambridge among the top ranking cities of the UK. The city scores top marks in the ranking of cities across a range of measures including the lowest number of claimants for Job Seeker’s Allowance (JSA), the highest skilled workers, the most number of patents granted per 100,000 population and the highest house price growth.

It has become normal for Cambridge to occupy these top slots in the Centre for Cities annual rankings but it’s important that this normality shouldn’t be mistaken for complacency. Those of us privileged to live, work and thrive here are acutely aware of the national and international context in which Cambridge succeeds.

There’s talk of economic normality on the horizon for the UK from some commentators but it can be a struggle to recall what that is – if we ever had it in the first place.

Before the next Bank of England inflation report, there will be a General Election and politics and democracy have a habit of interrupting economic programmes.But what do I know? It’s all Greek to me.

Will Mooney MRICS
Partner
Commercial, Cambridge

Conscious uncoupling

Will Mooney, Carter Jonas partner and head of commercial and professional services in the eastern region “There is nothing permanent except change”, Heraclitus of Ephesus 535BC-475BC

I guess the works of the ancient philosophers have endured because they always seem to have a really good handle on modern life, don’t they? In mixing my ancient civilisations here, as the two-faced month named after the Roman god Janus ends, it seems to have rung in a mood of change – the mood which will surely go on to charactertise the rest of the year, as it does any year.

Divorce lawyers will confirm that January is good for business. It’s a month in which couples whose relationship has been rocky appear ready enough to confront the reality and initiate a change, whether permanent or temporary.

January this year saw Hollywood actor Gwyneth Paltrow admitting she regrets having used the phrase ‘conscious uncoupling’ when, last year, she announced that her and pop-star husband Chris Martin were divorcing. Yet, it’s an eloquent phrase impying, as it does, a grown up approach to unhitching in the way that ‘divorce’ has come to suggest something a bit more acrimonious.

In early January, the Swiss National Bank unhitched the Swiss Franc from the Euro. The following week Denmark was tipped to do the same with its Krone in anticipation of the European Central Bank (ECB) announcing a programme of Euro quantitative easing (QE) to alleviate the debts of certain Eurozone countries. The ECB having finally convinced Germany of the advisability of QE in the face of mounting disquiet and political unrest, particularly in those bailed-out Eurozone countries.

It’s been the month in which the battle of the supermarkets played out badly for two grocers occupying the middle ground. A pincer movement from food retailers at the premium and budget ends of the trolley park saw Dalton Philips step down as chief executive of Morrisons. In the same month, the last boss but two of Tesco came out in public to criticise his own immediate successor who, himself, had already resigned in July 2014.

In an interesting aside, on the theme of coupling and uncoupling, I read that a Cambridgeshire couple are planning to have their wedding reception in the café of their local branch of Morrisons in Cambourne - circumstances meant it was a frequent venue during their courtship.

In the week leading up to Burns Night on 25 January, proposals which could ramp-up the next phase of Scotland’s devolved powers were published for consultation. This is part of the phased fallout from Scotland rejecting to consciously uncouple itself from the Union in September last year.

Surely the most frenzied activity to couple or uncouple on the UK dating scene this year will be pre and post-General Election on May 07th. The blue and yellow members of the coalition have already embarked upon a fast track separation in talking about the differences in the coalition in party terms where once it was the coalition consensus that mattered above all else. Let’s hope any powerbroking in the absence of a workable majority administration will once more see peace and harmony in the Rose Garden of Number 10 soon after polling day.

With polling pundits calling a hung parliament, it’s been over 40 years – 1974 - since there have been two General Elections in one year here. How the times have changed since then.

Will Mooney MRICS
Partner
Commercial, Cambridge

Splurge, purge and debt

Setting aside the peculiarity of making an Autumn Statement in early December, the dust has settled, for the time being, on the brouhaha which accompanied the Chancellor of the Exchequer’s latest diagnosis and prescription to remedy the financial ills of the nation.

The country is riddled with debt and it needs to be cured by short and mid-term pain for long term gain it seems.

It is politically acceptable to talk about the national debt again in a way it probably hasn’t been since the 1970s. Then, we were all about the Public Sector Borrowing Requirement and inflation, the 3-day week and the winter of discontent.

All the mainstream Westminster parties - and those aspiring to become so after the next election - are no longer embarrassed to mention the ‘D’ word again. And not only to talk about how indebted we are as a nation, but also to set out their stall as to how we can decrease this public debt.

It is okay to talk about repaying our debt, even if in repaying it what we actually mean is reducing the cost of servicing it.

In the fiscal year 2018-2019, implementation of the Government’s current programme will see us save £18 billion in interest payments. Borrowing is falling. Next year it will be £75.9 billion, falling from £91.3 billion this which, itself, has dropped from last year’s £97.5 billion.

We are aiming to be in the black to the tune of a £23 billion suplus in 2019-2020 but we are cautioned it could get messy in order for this to be achieved. Being in the black is a laudable business aim.

While it’s fine to talk about our national debt and how we can repay it, it’s still not fashionable to talk about our private debt in polite company as that’s even messier, but we have to start somewhere.

Tucked away in the detail and the in-depth coverage of the Chancellor’s statement was notice of our intention to pay back or, at least try to clear, the nation’s historical debts – some of which date back to the early 18th Century.

The refinancing of World War One debts in 1932 took the form of a bond replacing a gilt which was first issued in 1917. Now - well ,on 09 March 2015 to be precise - the British Government is set to redeem this bond which, in total with other war bonds since the penultimate year of the Great War, has cost £5.5 billion pounds in interest alone.

HM Treasury has made it known that it is the intention to repay, at the appropriate point, ‘legacy bonds’ which shored up borrowings against other expenses incurred during our nation’s history.

Some of these bonds and gilts financed the Napoleonic Wars, the setting up of the Bank of England and the clean-up when the South Sea Bubble burst and rocked the finances of the country in 1720.

Which, if any of these specific, perpetual debts are to be revisited have yet to be confirmed in detail but the fact that we, as a nation, are beginning to address our nationalised indebtedness tells the story of our times more than of those past.

Let’s hope we’ve eaten, drank and been merry in the past few weeks; for next May, we vote.

Will Mooney MRICS
Partner
Commercial, Cambridge

Our ping-pong recovery

It was exactly three years ago when I was advised that ‘being on the brink is the new normal’ for what, at the time, was the foreseeable future. In 2011, many weren’t willing to assign a specific number of years to ‘the foreseeable future’ but I think we can say that, three years on, we are back from the brink, economically.

Yet as many economic and financial commentators judge, the country is still in a strange state of being where one set of indicators suggesting positive news is offset by another giving a gloomier gloss to our recovery. Yes, the economy is growing but there will be a shortfall on the deficit above £100 billion by the end of this year.

One Eurozone economist recently characterised the UK’s growth as ‘the wrong type of growth’. Much like the seasonal ‘leaves on the line’, it’s probably the best explanation for the feed of ping-pong, back and forth, contradictory economic data this autumn and the balancing act those politicians charged with running the country are having to perform day-in and day-out as our recovery plays out.

Perhaps the bruising economic experience the UK has endured since 2008 has changed our perceptions of what amounts to recovery. Pre-crisis, debt-levels being 40 per cent of national output were considered high but now it’s 80 per cent which is the trigger point at which the credit rating agencies talk about withdrawing our triple AAA status.

The shortfall on the deficit by this year’s end would have been considered big in times past at 6-7 per cent of national output but it is not as big as it was at its 9-10 per cent peak in 2008/2009.

In October, published figures recorded that unemployment had fallen below the 2 million mark for the first time in six years. But in this current tax year of 2014/15, income tax receipts are up by just 0.1 per cent yet outlay on social benefit payments has gone down.

Wage inflation runs at just 1 per cent at this point in our recovery but the Bank of England is anticipating 3 per cent wage inflation by the end of next year and therefore tax receipts will be up.

It may feel like a heavy trudge through the recovery now but many analysts are convinced there is good news in the pipeline and, thankfully, the wisest market operators will always invest for the long term.

Before that, we have the General Election in May and all bets are off that the Chancellor of the Exchequer’s Autumn Statement – scheduled for early December – will be anything else but a necessary political and economic balancing act of ‘Austerity Lite’. There is likely to be further squeezing of public expenditure but the pinch will not be as nippingly sore as it was in the early years of this administration.

In this ping-pong recovery of ours – in which we are growing faster than Germany - whether it’s politics which is the foil to economics or vice versa, balancing is not an act: it is the reality.

Much as we did in 2011, we are going to have to accept this new reality of our recovery for the foreseeable future.

Will Mooney MRICS
Partner
Commercial, Cambridge

Breaking up is hard to do

While it’s not Scots away, Will Mooney, Carter Jonas partner and head of its commercial agency and professional services in the eastern region, wonders what the genie might get up to if it refuses to go back in its bottle.

Being Northern Irish, I’m no stranger to the damaging effects of political division and and the negative economic impact schism can have on successive generations. I’d suggest that those of us with Celtic origins followed Scotland’s Independence Referendum with a keener eye than our Anglo-Saxon peers – at least until that September weekend when that poll mobilised Westminster’s biggest guns.

The financial markets reacted in the way they always do to uncertainty. Yet, at the same time, how could a ‘little local difficulty’ in the United Kingdom influence global capital and currency markets when there is so much else going on on the international stage?

Cue a number of high profile businesses and corporate interests who expressed their concern or hinted what the consequences might be if expected to do business with, or in, a post-independent Caledonia.

Pro-independence business commentators countered by making the distinction between uncertainty and risk. Do people become entrepreneurs because they take risks or do you have to be a risk taker, first, in order to become an entreprenuer? What has to be certain before a risk becomes designated as a calculated risk and, thereby, worth taking?

In these weeks following the referendum result, there is the sense that many of the old certainties of The Union have gone or are going or are changing or are being challenged.

Not being sophisticated in the ways of psephology, I can’t say whether a 10 per cent differential in favour of remaining part of the United Kingdom is a close run thing or not. But there’s no denying that the referendum debate, has opened-up another layer of debate about a more federated British Isles.

It’s to be hoped that this opening will not become a fissure because, apart from anything else, that’s not our style of doing things in any part of Britain.

The turbo-charged timescale suggested for further devolutionary powers for Scotland - more Devo-medium than Devo-max, as it turns out - promised by the three mainstream party leaders pre-referendum has raised some eyebrows, not least of all those of the Whitehall mandarins who will be charged in getting legislation through in time for Burn’s Night on 25 January, or not.

Will Mooney MRICS
Partner
Commercial, Cambridge

Reasons to be cheerful

This summer’s international news agenda has been tough reading and viewing. “Wars and rumours of wars” have always been the drivers of news, particularly so in our digital existence with web pages and broadcast hours to be filled round-the-clock.

While it’s been far from the silly season of summers past, weaved in to the news agenda have been more positive things. Many of these stories feature the word ‘happy’ and have lightened the mood of the summer and should give us food for thought.

Happiness can and is being measured by the Office for National Statistics (ONS). In the month in which daylight was at its longest in the northern hemisphere, the ONS analysed a raft of European data to conclude that Britain is the 11th happiest country on our continent. At 71.8 per cent, we are marginally happier than France where 71.6 per cent of adults rated their life satisfaction above or equivalent to seven out 10. This puts Brit adults just behind Germany at 72.3 per cent. Top marks went to Denmark at 91 per cent, leaving Bulgaria being the least satisfied of EU countries at just 38.3 per cent. I’m not sure what governments will do with this data but it’s interesting that they are bothering to find out.

Meanwhile in the People’s Republic of China, it’s been reported recently in the western media that quality of life has been promoted above GDP as an performance measure in a number of cities and administrative areas. Apparently, focusing solely on GDP as the key to local officials’ promotion has seen industrialisation and development rampage to the neglect of the environment, agricultural land and social welfare. So in, selected areas - although it is notable not yet in the showcase cities and areas - measures of success such as raising living standards and what President Xi Jinping calls ‘hidden achievements’ will be taken into account in judging local officials’ rise through the ranks.

Countries often look to sport when it comes to fostering a feel-good factor in their populace. Glossing over the FIFA World Cup, there was the success of the Home Nations in the Commonwealth Games in Glasgow and the European Athletics Championships. The England women’s team finally triumphed to win the Rugby World Cup after being in the runner’s up position in three previous appearances. Then, billed as a comeback, there was the Test Match Series win over the Indian cricket team by England’s men which restored a little of the pride which had been so comprehensively dented by the Ashes tour of Australia last winter.

Many of us will have come back from holiday to burgeoning email in-boxes and that’s even if we did break pledges to partners and sneaked a look at our smart phones and tablets while on holiday. But not-so employees of Daimler, whose board members wanted staff to properly relax.

The car company instituted a ‘Mail on Holiday’ system on its email server whereby the auto reply told the emailer that the emailee was on holiday and the message would be deleted but gave a non-holidaying employee contact as an alternative. Imagine how much happier – and more productive – that first morning back at work must have been for those workers and execs? This will surely contribute to Germany scoring higher on the ONS’s analysis of life satisfaction data next year.

Finally, it looks like the Bank of England is coming round to nudging up the base interest rate – well, two members of the Monetary Policy Committee are anyway. The prevailing view is that to nudge in incremental amounts, when the Bank faces up to the inevitable and raises the rate, will be easier on the economy than full percentage point rises at a time.

This is the economy which, by the way, the Governor of the Bank of England confirmed in August was half way to recovery and, presumably, he’ll and we’ll know when we arrive.

Will Mooney MRICS
Partner
Commercial, Cambridge

City-state of the nation

With Scotland’s electorate deciding if it feels better together or not in September, Will Mooney, Carter Jonas partner and head of its commercial agency and professional services in the eastern region, wants to know if smaller can be better.

Early in July, the Government announced the release of the first tranche of a big pot of £6 billion of cash for the English regions. With an eye on being better together and although the phase 1 £12 billion is very much for England, the Prime Minister heralded Growth Deals as ‘...a crucial part of our long-term plant to secure Britain’s future.’

In this first phase, £71.1 million is allocated to what’s termed the ‘Cambridge Corridor’ for projects which include transport and science and technical innovation centres. The day after the Government’s announcement, the Cambridge Ahead organisation said that the £13 billion economic powerhouse that is Cambridge needs to be on its guard as its top business talent can be enticed away to London because of, among other things, Cambridge’s poor transport infrastructure and paucity of night time entertainment.

Cambridge Ahead is looking to pitch Cambridge as the ‘pre-eminent small city in the world.’ It’s a flight of fancy on my part but perhaps Cambridge could make the case for city-state status like that of Singapore, Andorra or Macau? Or those classic city-states of Rome or Athens?

Too landlocked, perhaps, for parity with the city-state of medieval Venice, there would be there would be no shortage of candidates for The Doge of Cambridge as there are plenty of shrewd citizens and the modern equivalent of rich merchants. The great buildings of Venice see themselves reflected in the palaces of learning which are the University Colleges. So influential is the business success of Cambridge, that it could make a claim for sovereignty and overlordship over adjacent counties which is a pre-requisite characateristic of historical city-states.

Of course, this idea must be treated with the levity it deserves but Cambridge continues to reinforce its position as the most commercially influential location in the eastern region. Rather than city-state, perhaps there’s a case to be made for ‘city-region’?

It is regional causes and cases for investment and development which are the cause celebre this summer and beyond, in all probablility – and not only with the policy-makers but with policy influencers too.

The RSA City Growth Commission (thersa.org.uk) published a report in July called “Connected Cities: The Link to Growth”. The report references city-regions but prefers to use the term ‘Metros’ in arguing that individual cities , such as Leeds, Manchester and Sheffield, should have the freedom to operate as collective metros to make their own decisions when it comes to infrastructure investment.

In not relying on centralised decisions from Whitehall about what’s best and how much is best for its metro, the report makes the case that this devolved approach in England would see a counterbalance to the dominance of London and the South East. In turn, this would be in the best interests of the whole of the UK’s economic growth and chances of prosperity being spread geographically to all our benefit.

In the early autumn, the UK nation state faces the prospect of losing its most northerly part but such is the jigsaw of our country that there are rumblings in Orkney and Shetland that perhaps they have more in common with their Scandanavian counterparts than with Scotland’s central belt and its kingmakers at Holyrood.

Will Mooney MRICS
Partner
Commercial, Cambridge