Economist.com Cities Guide: London Briefing - May 2005

News this month

Trouble for the Eye

The fate of the London Eye is hanging in the balance. According to reports, the South Bank Centre (SBC), its landlord, wants to raise the attraction's annual ground-rent from £65,000 to £2.5m. The operators of the giant steel-and-glass Ferris wheel have until July 1st to agree to the new lease, or face eviction.

Politicians have reacted with fury to the news, partly because the Eye features prominently in London’s bid for the 2012 Olympic Games. Ken Livingstone, the mayor, suggested that Lord Hollick, who chairs the SBC, should be sacked and that the SBC be put under his control. Kate Hoey, MP for Vauxhall, also attacked the SBC, alleging that the public company was “being very, very greedy”. Neither the SBC or the London Eye's operator had commented on the matter as of May 23rd.

Opened in January 2000, the London Eye was granted planning permission for just five years—though this was later extended due to its huge popularity. The attraction has an annual turnover of over £40m but is saddled with large debts arising from its construction.

Bloody nose

London's voters thumbed their noses at Labour in the general election on May 5th by ousting 11 of the party's MPs—an unexpectedly high number. The most dramatic result came in Bethnal Green and Bow, where a 26.2% swing away from Labour handed victory to George Galloway's anti-war Respect coalition. On May 17th, Mr Galloway took the fight to Washington, DC, where he appeared before a US Senate committee that had accused him of profiting from illegal Iraqi oil sales. True to form, the fiery Glaswegian turned the tables on the committee, accusing its members of being “remarkably cavalier with any idea of justice”.

Of greater importance in the general election were the eight London seats won by the Conservative Party—most notably Putney. These wins reverse the party's losses from the 1997 Labour landslide, and give the Tories a solid foothold in the capital. Despite seeing their overall share of the London vote rise by 4.4 percentage points (compared with 1.4 percentage points for the Tories), the Liberal Democrats picked up just one seat—Hornsey and Wood Green—and clung on to Brent East, which the party won in 2004. Opposition to the Labour government was higher in London and the south-east than elsewhere in Britain.

Strikes at the BBC

Almost half of the BBC’s staff went on strike on May 23rd in protest over plans to cut 3,780 jobs and privatise parts of the state-owned broadcaster. The industrial action forced the cancellation of many television and radio programmes, and led to others being broadcast in a pared-down format. In London, strikers brandishing signs reading “Fight for our BBC” organised pickets outside BBC Television Centre in White City and other BBC offices across the capital. Those picketing at White City received a delivery of over 200 croissants, courtesy of LBC, a rival radio station.

The industrial action came in response to a cost-cutting plan advocated by Mark Thompson, who became the BBC’s director-general in 2004. Mr Thompson believes the organisation needs to become leaner ahead of increased competition and a likely reduction of the television licence-fee that provides the BBC with a big chunk of its income. Unions opposing his plan are planning a further, two-day-long strike after the Bank Holiday weekend, on May 31st and June 1st, which could be followed by another 24-hour strike later that month.

School’s out

London has the highest proportion of failing state schools in England, according to figures published by Ofsted on May 16th. The government’s education watchdog reported that 2.3% of the capital’s 2,391 state schools had been put on the “special measures” list at the end of the 2003/2004 school year—compared with 1.5% nationally. Schools on the list must raise standards or face closure. This was the first time that Ofsted had provided a breakdown of failing schools by region.

In a related development, police investigating the murder of a young African boy nicknamed “Adam”, whose torso was found in the Thames in September 2001, revealed that 300 black boys aged between four and seven disappeared from London school rolls in two months of that year. Only two of the boys have been traced. Besides hinting at a well-developed system of child-trafficking in the capital, the discovery highlighted the weak links between the education system, social services, police and immigration service.

Food fight

An influential food critic has launched a stinging attack on London’s restaurants. Writing in the Evening Standard on May 13th, Fay Maschler accused the capital’s eateries of becoming “ridiculously pretentious and absurdly overpriced”. Concentrating on two new restaurants—Silk and W’Sens—she complained that an obsession with extravagant interiors and pompous concepts is transforming London’s catering business into “a branch of show business”. The high costs, Mrs Maschler argued, are being passed on to customers, who are getting poor service and unimaginative food.

Of course, overpriced and overblown restaurants are nothing new, but offering ridiculously expensive dishes seems to have become a competitive sport in London. Weeks after Zuma in Knightsbridge announced it was selling a £55 hamburger, Kai, a Chinese restaurant in Mayfair, hit the headlines in early May for selling a bowl of soup costing £108. Yet data from the Economist Intelligence Unit, a sister organisation of The Economist, suggest that—compared with New York and Tokyo—eating out in London is not absurdly expensive. Its Worldwide Cost of Living survey finds that the average cost of a good meal for two in the capital is $162.50, compared with $197 in New York and $181.42 in Tokyo.
See our list of favourite restaurants.

Place your bids

London’s bid to host the 2012 Olympic Games is entering its final phase, with the International Olympic Committee (IOC) set to pick the winning city on July 6th. Tony Blair, now re-elected prime minister, has vowed to step up his campaigning on behalf of London. The capital’s residents also seem to be lining up behind the bid: 79% are now in favour—up from 67% in October 2004—according to a poll commissioned by Ken Livingstone, the mayor.

But not all has been plainsailing. On April 23rd, London’s bid team withdrew a £15m incentives package after the IOC’s ethics commission questioned its legality under the bidding rules. The dropped scheme would have included free return flights to the Games for the 10,500 athletes, and £26,000 for each national Olympic committee. Meanwhile, a coalition of over 300 firms facing relocation if London wins the Games said they would write to the IOC voicing their opposition. They are claiming £1.5 billion in compensation on top of up to £450m promised by the London Development Agency, a government body. IOC evaluation reports on the five bidding cities will be published on June 6th, ahead of the vote in Singapore in July.

A tale of two teams

It was all smiles at Stamford Bridge on May 7th as fans of Chelsea Football Club celebrated winning England’s top football league for the first time since 1955. They clinched the title on April 30th when they beat Bolton in an away-match. The Blues capped a remarkable season by scooping a host of individual awards and amassing a record-breaking number of points (94). Bankrolled by Roman Abramovich, a Russian billionaire, and managed by the charismatic Jose Mourinho, some wonder if Chelsea will dominate English football as Liverpool and Manchester United did in the 1980s and 90s, respectively.

By contrast, Harlequins rugby club's season ended in disaster. Relegated from the Zurich Premiership, rugby’s top division, Quins face an uncertain future. Their stadium in south-west London—which is being expanded at a cost of about £8m—is now likely to be half-empty for most of next season. Star players are expected to leave and around 30 hospitality and administrative staff will lose their jobs. Dean Richards, the club’s new director of rugby, has a hard task ahead of him.

Catch if you can

June 2005

Deutsche Börse Photography Prize

Until June 5th 2005

This annual competition, now showing at London's Photographer's Gallery, is one of the most interesting in its field. This year, a particularly strong shortlist of photographers, a bigger prize and a new sponsor (the German stock exchange) have given it a higher profile than ever before.
The winner of the £30,000 prize is Luc Delahaye, a French photographer and former war correspondent. His panoramic images of global events depict everything from battle-scarred Baghdad to a meeting of cardinals and bishops in the basilica of St Peter's in Rome (pictured here). These and works by the three shortlisted photographers (Stephen Shore, Jörge Sasse and JH Engstrom) are on display at the gallery until June 5th.

The Photographer's Gallery, 5 & 8 Great Newport St, London WC2. Tel: +44 (0) 20 7831-1772. Leicester Square tube. Open: Mon-Sat 11am-6pm (Thurs until 8pm), Sun noon-6pm. Admission free. For further details, consult the gallery's website.

More from the London cultural calendar