New Business in Basildon

Basildon's economy carries on growing, with the Crane's Corridor industrial area now hosting a new kind of business. The old York International site is being redeveloped with a distribution centre and a backup Data Centre. A computer centre is a first for Basildon, and it is exactly the sort of high-technology industry that we want to compliment our established businesses, so I am very pleased at this development. Even better is the fact that businesses of this kind tend to cluster, because the reasons why one Data Centre gets built hold true for more Data Centres. So, good communications to London, a skilled workforce, local business services and support, and prime development sites could all lead to more of the same.

By the way, the that's Tony Ball, Deputy Leader of the Council, in the photo for the article on this in the Evening Echo. He's as pleased about this as I am. One thing though, the Echo article spins this as some sort of reaction to the 9/11 terror attacks and the continuing fear of terrorism. This might make for a splashy headline, but it is nonsense. Backup computer systems can be required for all sorts of reasons, most of the quite prosaic. Power cuts, fire, flood or even a serious system failure can take you to your backup site. This is why every serious company that I know of makes this sort of provision. It's not just about Osama Bin Laden.

Election prediction: Con 309 Lab 285, LibDem 22; Con short 17 of majority

A note from Electoral Calculus:

A new prediction has been posted on 1 January 2008 at www.electoralcalculus.co.uk/

Recent polls show a continuing but smaller Conservative lead over Labour. Ipsos-MORI has a lead of 7% (down from 9%); Populus (Times) has 8% (up from -1%); CommRes (Independent) has 11% (down from 13%); ICM (Guardian) has 5% (down from 11%); and YouGov (Sunday Times) also has 5% (up from 11%).

Overall the Conservatives are now 7% ahead of Labour (down from 9%), which is enough to be the largest party, but not to form a majority. As a rule of thumb, the parties are level if the Conservative lead is around 5%. The Conservatives need a lead of about 10% to have a majority, and Labour needs a lead of about zero. The current prediction is that the Conservatives will be short 17 seats of a majority, winning 309 seats (-20 seats since 6 December 2007).

Political Performance Survey from Iain Dale

Iain Dale is running a Political Performance Survey to assess how various politicians are doing. You can take it here.

House Prices falling

According to a variety of sources UK house prices are falling, with the Nationwide suggesting that they were 0.8% down in November and 0.5% down last month. This is a very sharp fall, and suggests that the housing bubble is deflating rapidly. Now, bubbles do burst, or rather sharp rises in asset values nearly always result in sharp falls as long term trends reassert themselves. There had been some argument that UK housing was different this time because of a shortage of supply over demand, but there are always arguments that sharp asset appreciation is 'different this time'. Remember the don-com bubble? Or the last time UK house prices went off the chart in 1989-90? That last experience is probably the best guide as to what happens next. For most people the answer is nothing as a rise or fall in the notional value of their property makes no difference because they were not planning to move and even if they did the relative values of the properties whey would sell and then buy have not changed. The problem comes with people who have been speculating on property and assuming that house prices would only ever go up. Investing in property in the hope of reselling quickly for a capital gain, or building up a property portfolio to let are now fraught with risk, and some people who have not been careful enough are likely to go to the wall. Then there are individuals who have been using their houses as a piggy bank by taking out secured loans against a notional value that may not be there any more. They only get into difficulty if they have to sell, as does anyone who bought at the peak of the market and now has to shift their suddenly over-valued property. Look for a number of personal disasters reported in the media over the coming months, but also for some quite severe commercial effects as the companies that support property-based loans feel the pinch. House-building is also going to slow down quite sharply against this market background, and large-scale projects with a large housing component might also face restructuring at the very least. Here in Basildon, where we have a considerable portfolio of regeneration projects then this is something that we will have to watch very carefully.

Politically, this is all bad for the government, especially as more housing is one of their key priorities. As things stand, the market is simply not going to deliver on the numbers stated by government ministers, and there is not much that they can do about it. Look for some imaginative excuses in 2008.

Happy New Year!

May I wish all that chance upon this message a Happy New Year. Let us hope that politics in 2008 does more to deliver on what the people of Basildon District and Britain actually want, and less on issues that are politically fashionable or are personal or party political hobby horses.