QUESTION: What’s the diff-erence between the Home Counties and Texas? ANSWER: Nothing, if the predictions from the British Geological Survey that there are billions of barrels of oil in shale rocks in Sussex, Hampshire and Kent turn out to be true.
It is obvious that this astonishing supply needs to be tapped; it could transform the UK economy and drive down energy prices. But it is equally important that any disruption to residents be generously compensated. The plans so far seem inadequate: giving a bit of cash to local councils won’t do. That is the big flaw in the UK’s zero sum game planning system: no mechanism exists to allow the winners to pay off the losers. We need radical reform, and fast, or else the huge opportunity that is shale will get bogged down in interminable political warfare.
FOR years, economies were ranked on the basis of how badly they were doing. We would discuss which Euro-zone economy was collapsing the fastest or which had the highest rate of youth unemployment. Everything was grim; the “winners” were the least bad economies.
Fortunately, the crisis is over, and the recovery is now entrenched. The real race is back on, and politicians all want to be able to boast that their country is doing best. Sadly for George Osborne, who was hoping to preside over Europe’s fastest growing economy, Germany’s GDP grew by 0.8 per cent in the first quarter of the year, the same as Britain’s. It gets worse: both of those growth figures have been rounded, to one decimal place. My colleague Peter Spence finds that Germany grew by 0.817 per cent, against 0.805 per cent for the UK.
Needless to say, it’s all just a bit of fun. Such numbers keep getting revised and are far too imprecise to be treated seriously. IHS Global Insight suggests that the UK’s first quarter growth could be revised up to 0.9 per cent thanks to service sector strength.
In any case, the real winner is Japan: its economy surged by 1.5 per cent in the first quarter of the year, to become the G7’s fastest growing economy. But that’s just for the first quarter. For 2014 as a whole, the race is still very much on.
SOME people are upset that the Heron Tower, one of London’s tallest skyscrapers on Bishopsgate in the City, has been renamed the Salesforce Tower London. The name is a bit of a mouthful, undoubtedly, and the brand it showcases isn’t exactly a household name, but it represents a milestone in London’s and the City’s diversification into the tech business.
Salesforce is a massive cloud computing company from San Francisco; it is now the Tower’s single largest tenant, having just taken an additional 50,000 sq ft which it will use as a base to expand into Europe.
This is good for London: its future prosperity will continue very much to depend on finance, law, professional services, business services and corporate HQs – but also increasingly on technology. In some cases, the firms will be home-grown; in others, it will attract European or international headquarters of global giants.
The fact that Britain’s tech cluster has come of age was noted in an interesting report from Jones Lang LaSalle (JLL), the property firm. It has decided to stop describing as the “City fringe” the large northern and eastern areas around the Square Mile where a growing number of entrepreneurial, disruptive and creative firms are based. Instead, it will now call those areas by their proper names: Clerkenwell, Shoreditch and Aldgate. The former, in particular, is emerging as a hub for media and advertising firms to rival Soho and Fitzrovia; the latter is home to many fintech firms, as well as more traditional City-type companies.
Great news for the economy and for jobs.
Follow me on Twitter: @allisterheath