Viable?

I am aware that there has been considerable conversation on social media in respect of the recent application to demolish and redevelop the former Great Harry pub in Parsonage Manorway, Upper Belvedere. The official description of the application is described as follows:- "23/00433/FULM Provision of a 3 storey building providing 32 self contained dwellings with associated car parking, cycle parking, refuse storage and outdoor amenity space following the demolition of the existing building. The Great Harry Public House Parsonage Manorway Belvedere Kent DA17 6LZ" Many locals are unhappy that the pub will be replaced with "yet more flats". Unfortunately the pub - photo above - has not been a viable business for some years. Thanks to a couple of readers who sent me the information, which is now available for anyone to examine by visiting the Bexley Council Planning website here, I have found the official business viability report, produced by an independent expert in such things; an exceprt of which is reproduced here for your information:- "I have been able to establish that the pub was owned by Inntrepreneur Pub Company, recently acquired by Stonegate Pub Company. The trading history shows the level of beer purchased by the lessee from Inntrepreneur under the tie agreement. It shows a downward trend from 299 Barrels in 2014 to 110 in 2019 followed by an upturn to circa 170 to 175 barrels. Rent, including a tie release fee in respect of wines and spirits was £30,000- £31,000 in 2014/15. There appears to have been a rent review in 2016 taking the rent and tie release fee to £40,000. Immediately after this, there appears to have been a substantial reduction in both beer volumes and rent received, the latter being £6,000 for each of the three years prior to the pubco’s decision to sell. I do not have access to trading accounts. The Pubco’s business model is to operate tied leases where their income streams are rent plus wholesale margins on the supply of tied products to the pub. The tenant’s accounts are not in the public domain. It is possible to build up a picture of the trade from the information available. We have the Rateable values from which it is possible to estimate the turnover. The Valuation Office publish a document “Valuation of Public Houses” in which they explain the methodology of arriving at the Rateable Value. The first element is the calculation of Fair Maintainable Trade (FMT) i.e., the trade that could be reasonably expected to be achieved by the ordinary tenant. If I adopt the band for Outer London, Category One, Lower Level, i.e., situated on the outskirts of town, the rateable value is seen to be calculated as 9.0- 10.25%% of turnover. Thus, a rateable value of £52,750 in 2010 indicated a Fair Maintainable Turnover in the order of £550,000 per annum. The pub was viable at this stage. By 2017, the rateable value had fallen to £25,500 indicating a turnover in the order of £250,00 - £275,000 per annum. Less profitable than it had been in 2010, nevertheless still viable. It should be noted however that the 2017 rateable value was based on information supplied at the antecedent date of 1 April 2015. By 2017 volumes and thus ability to pay rent, had fallen substantially. The trade continued to fall to 110 barrels in 2019, recovering to circa 170-175 barrels in 2020. A turnover of £211,000 pa, a typical tied business of this type would generate a profit of circa £26,449. However, it should be noted that this is before payment of  rent and that the pub operator pays himself from the retained profit. Rent is often calculated as a 50% bid on the divisible balance before deduction of rent. In this case, that divisible balance is the operating profit of £26,449. A 50% bid would result in a rent of say £13,225 to the freeholder and a return of £13,225 to the tenant/lessee. The tenant/lessee’s return is, in effect, his wages. £13,225 is clearly insufficient recompense for his time and efforts in running a business of this size. Payment of a reasonable recompense to himself would leave him unable to pay rent. It is evident from calculation that the business would have been incapable of supporting an adequate return to the operator in addition to the payment of rent to the freehold owner. These are the circumstances that would have led to the reduction in rent to circa £6,000 per annum, the lessee’s decision to leave and the decision by Stonegate pub company to sell their interest. It is evident that the pub has operated at a viable level until 2017, following which trade has fallen away to a level that was no longer viable from either the freehold pubco’s perspective or that of the leasehold operator. On balance I consider that at the level of trade achieved in the five years prior to its sale, the Great Harry was unviable". So it is clear that the Great Harry could no longer continue to operate as a pub. The report goes on to say that the price of the pub, if sold as such was around £350,000, whereas if the land was sold off for redevelopment, it was worth around £1,225,000. As readers may be aware, I am a keen supporter of local pubs - and I am also a long - time member of CAMRA. However in this case, it is abundantly clear that the Great Harry has not been a credible business for at least six years, and there was no real future for it as a pub, unfortunately. Comments to me at hugh.neal@gmail.com.

I have recently written about the forthcoming Outer London ULEZ expansion plans, and the controversy surrounding them. As previously stated, I don't have a personal axe to grind on the issue, as I am not a driver - though I do hold a full UK driving licence. I have not owned a car in 25 years, and rely solely on public transport. I know from recent correspondence that many readers are strongly opposed to the ULEZ expansion, as are a number of Outer London borough councils. There is another air quality issue that is shortly to become apparent that will affect all motorists - whether they drive a vehicle powered by an internal combustion engine, or any form of electrically powered motor. I foresee that the issue will become very big news in the near future. Drivers risk being forced to pay a “tyre tax” as Britain explores a crackdown on brake and tyre wear emissions. Ministers have hired advisers to explore how to address harmful emissions that experts say are more harmful than diesel fumes, according to an article in the Daily Telegraph last week. The Department for Transport has asked consultancy Arup to “develop recommendations on how to better assess and control these emissions which will persist after a transition to zero tailpipe emission vehicles”, according to a Government filing.  Although the Whitehall officials last weekend insisted that Arup’s work was not designed to inform tax policy, it is being seen as one of the strongest signals yet that a tyre tax is coming down the road. Andy Turbefield, head of quality at Halfords, said in the article that: “Putting a tax on road safety is not the right way to plug the fuel duty gap. Worn tyres and faulty brakes are two of the biggest causes of accidents. As it is, many motorists are delaying tyre replacement and basic maintenance because of the cost-of-living crisis. Using the tax system to penalise people for keeping their vehicles in a roadworthy condition is not a good policy.” Tyre and brake wear pollution is expected to be the next battleground for clean air campaigners after drivers switch to electric vehicles. Particles sent into the air – known as “particulate matter (PM) 2.5” – are more harmful than Nitrous Oxide emissions that have been the target of low-emissions zones such as Sadiq Khan’s Ulez in London. The article went on to say: - Although tyre technology has developed to reduce dangerous emissions, the Environment Department said last week that non-exhaust road emissions have “remained largely unchanged between 1996 and 2021” Mr Turbefield added: “If taxing non-exhaust emission is to be considered, then there needs to be more research into emissions from road surface wear. It’s plausible that electric vehicles, which are much heavier than petrol vehicles, cause more damage to road surfaces and are therefore a bigger source of road surface emissions. Any review needs to take account of the big picture.” A Government spokesman said: “We want to better understand the impacts of non-exhaust emissions, such as tyres, on the environment which is why we’re conducting research on the matter. This research was not commissioned to inform tax policy development. As we continue to deliver on our target to meet Net Zero by 2050, we are committed to keeping the switch to electric vehicles affordable to consumers, which is why we are spending billions to help incentivise uptake and fund the roll out of charging infrastructure across the UK.” In May Professor Alastair Lewis, chairman of the Department for Transport Science Advisory Council, said: “When everybody owns a low emissions vehicle, low emission zones become a toothless control lever to try to manage air pollution. A world where we [have] jam-packed roads full of electric cars [also] isn’t a particularly attractive one… Even if they are electric, [they] will generate lots of particles. At some point in the future when most of those cars have disappeared, a different form of air pollution control” is likely to be needed, he added. “We do have to project forward about how we’re going to manage vehicles in large cities like London in the future when we have a largely electrified fleet of vehicles.”  Prior to publishing this article, I ran it past local electric vehicle and general technology guru Miles, who wrote the following response:- "The ULEZ expansion is fundamentally a good idea which has been executed poorly. I would have preferred a ratcheting fee carried out over say five to seven years. I'm sure most logical people would agree that removing polluting vehicles should be removed from the highway, but we also need to appreciate that you cannot just tax people off the road. "You get more flies with honey than with Vinegar". Not everyone can afford to buy the latest ULEZ compliant car/van (or dare I say it, electric), especially at the current prices! I believe there is a limited scrappage scheme but I don't believe it's overly generous, especially if you need to spend £30-40k on a new transit van. At least with ratcheting fees, and by that I mean starting with a modest fee to travel into the city which steadily increases over the years would give owners the incentive and time to trade up without taking them off the road. Brake disc and tyre particulate tax. I've known this was coming for some time. Regardless of your vehicle of choice, both generate a lot of pollution of which we're all breathing. Fundamentally the vehicle cannot operate without them. My only thoughts are a tax at point of purchase which should hopefully encourage improvements at the point of manufacture. When it comes time to buy new pads or tyres, the consumer will pick the cheapest model which suits their requirements, if the polluting version costs %20 more, who's going to buy it? Finally, the weight of EVs and the impact on the road surface is an interesting point. I do think it's somewhat moot when you've have lorries and buses churning up the road surface on a regular basis. Whilst EVs are heavier on average, there's not really a huge difference. As with emissions in current internal combustion cars, I suspect that just needs to factor into the VED (Annual Vehicle Tax). As I've said before on your blog, the real issue here is offering people alternative means to the car. I'll offer you a quick anecdote, I now drive to the Elizabeth line in my petrol car. Why? Because the overground trains are so incredibly unreliable I don't know if I'll get to and from work on time. It actually makes MORE sense to drive, pay the exorbitant parking fee, and take the 10 minute journey via Crossrail. Cost wise, it's roughly the same". Comments to me at hugh.neal@gmail.com.

When 5G mobile communication technology was launched, it was claimed that it would revolutionise telecommunication on the move. The reality has currently proved to be somewhat different. Almost four years since the launch of 5G and as the telecoms industry gathers for its traditional annual conference in Barcelona this week – the first full-blown Mobile World Congress since global travel restrictions were lifted – this triumphalism will be markedly absent. Surging energy prices after Vladimir Putin's invasion of Ukraine, a lack of consumer technology that needs the extra speed, and a lack of interest from business customers means the great 5G revolution has rapidly run out of steam. At the heart of 5G’s perceived shortcomings is consumer apathy. While 2G gave the world mass market digital mobile phones, and 4G gave us mobile broadband, the benefits of 5G to consumers are more elusive. Only one in five UK phones could even connect to a 5G network at the end of 2022, according to Ofcom. Santiago Tenorio, fellow and network architect director at Vodafone, said in a recent online interview that the early years of a new technology often underwhelm. “At the beginning of every new ‘G’, the reality was not following the hype. With 3G and 4G we were promised that it was completely going to transform society and change the way you live. But three years on, your phone looks exactly the same and only the icon has changed, and the hype has turned into complete disappointment, and people thought we were doing it for nothing. I think this is partly because the industry gets ahead of itself and gets overly excited and promises more than it can deliver. There’s no doubt that it is good technology. It works, and we’ve seen improvements in performance… but we haven’t really seen the exciting new apps emerge yet like we did in the 4G era, it’s not really changed anything markedly.” 

I was doing some research into the history of Chislehurst Caves this week; I knew that they had a very strong link to the 1960's and early 1970's London live music scene, and bands such as The Rolling Stones, The Jimi Hendrix Experience, David Bowie, Pink Floyd and Status Quo all played on the small stage within the caves. Chislehurst Caves are not naturally occurring; it would be more accurate to call the place Chislehurst Mine, as it was originally a chalk and flint nodule mine, the earliest reference to which dates back to at least 1215AD. Pretty much everyone knows that it was a huge and impenetrable bomb shelter during much of World War II, but what is less known is that in the years shortly before the war it was Britain's largest mushroom farm! The caves have also been used as a location for a number of TV shows and some big screen movies, of varying budget and quality. The classic Doctor Who story "The Mutants", the spectacular flop (and now a cult hit) that was the 1986 film "Biggles - Adventures in Time" and possibly most notably, the 1981 micro budgetted British sci fi horror movie "Inseminoid" were filmed mainly in the cave complex. Comments to me at hugh.neal@gmail.com.

As I originally wrote back in August of last year, the huge Cineworld chain of cinemas around the UK and the USA has filed for Chapter 11 bankruptcy protection in America, and the chain of UK cinema multiplexes are threatened with closure if a corporate buyer cannot be found. The Bexleyheath Cineworld branch (photo above - click on it for a larger version) is one that may well be forced to close for good. Over 28,000 people are employed by Cineworld worldwide. Cineworld was also hard hit by the pandemic, like other cinema chains. With customers unable to go out to see the latest blockbuster releases, earning money and maintaining a stable cash flow became almost impossible for the international company. Due to social distancing rules, many theatres were forced to close for extended periods during lock downs. This stopped the money being pumped into even the largest cinema chains in the world. Even after the Covid 19 pandemic, cinema attendance has dropped considerably. Overall box office takings are down 32% from last year, compared to around a third in 2019. Additionally, during the lock downs, streaming services surged in popularity, competing with cinema chains. The ever-rising cost of living in the UK is halting people’s spending habits, as they have had to shell out more cash on household bills. This has further stopped people from heading out to their local cinema multiplexes and has even taken a toll on some of the world’s biggest streaming services. The future of film in the UK certainly looks bleak right now. Following this, Cineworld signed a deal with Warner Bros to show films in theatres before they are streamed. In recent months, Netflix has reported a sharp drop in subscribers due to the rising cost of living. There was no comment from the company on whether it was considering liquidation in the UK, or what impact it might have on its 4,600 employees there. If Cineworld or Picturehouse files for bankruptcy, it would not be drawn on what will happen to people who own memberships or vouchers. In a statement, published on the Business Insolvency Helpline website, Cineworld said: “Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.” In the UK and Ireland, Cineworld has 128 cinemas. Across more than 750 locations, it has 9,189 screens. The company operates in 10 countries, including the US, Poland, and Israel. The market value of Cineworld is around $69 million, but the company is indebted to the tune of close to $5 billion. The company has now received non-binding approaches from a number of possible transaction counter parties for portion or all of the group’s business, according to a Cineworld representative. While no decision has been made regarding whether to pursue a sale transaction and the terms of any such transaction remain uncertain, based on the proposals received thus far, it is not anticipated that any sale transaction will provide any recovery for the holders of the company’s equity interests. The company is reviewing such proposals in collaboration with its advisers and key stakeholders.

Steam-powered ferries across the Thames from Woolwich first operated in 1889. A similar paddle-wheel type was used for their replacements in the late 1920s – early 1930s. These, still operated at the time by the London County Council are those seen in this film, made on 1961 including Squires, Gordon, Crooks and Benn. A pedestrian tunnel links the ferry approaches, provided with lifts and stairs. For the able-bodied its use could usually be quicker than taking the ferry. The short video shows the operation of the ferries in the Spring / early Summer of 1961. Comments and feedback should be sent to me at hugh.neal@gmail.com.