A tale of two Kensingtons: George Osborne’s Autumn Statement brings little comfort to the London borough's Liverpool namesake
While shopkeepers in London’s Kensington applaud the Chancellor’s taxing of the absent super-rich home-owners, there are very different concerns in Liverpool’s poor district of the same name. Jonathan brown and Jamie Merrill report
It is only 215 miles from the white stuccoed villas of Kensington, west London to the graffiti-splattered roller blinds and tanning salons of its Liverpool namesake. But they may as well be on different planets.
At Huntsworth Wine shop in London W8, where the average “discerning customer” is happy to pay £300 for two cases of decent Bordeaux – around two-thirds of the average weekly household income in the Merseyside ward – the Chancellor’s Autumn Statement was receiving a perfunctory toast.
Wine merchant Tuggy Meyer, who has lived in this part of the capital for 48 years, felt Mr Osborne’s decision to impose capital gains tax on overseas sellers of UK properties might provide only belated help to an area whose sumptuous homes have long proved a magnet for the global super-rich.
“The biggest single damage factor for local business here is the overseas influx, but unfortunately the damage has been done and is probably irrevocable,” he explained.
“Our trade has been hugely affected. Local people used to stay in the area, shop and spend money here but now the foreign influx – with the top of each pyramid of wealth from Italy, Russia, Germany, Brazil moving in – has an adverse effect.
“These super-wealthy don’t spend time here. They relocate to their homes in Tuscany and are not spending for three months every summer, while at Easter, Christmas and every other weekend they are off to their mansions in the Cotswolds,” he added.
Trade has also been suffering at Ralph’s DIY – a fixture of Liverpool’s Kensington shopping parade for more than 50 years. Shop assistant Iain Browne, 59, said there was little sign of Mr Osborne’s promised economic sunshine – or people mending roofs for that matter.
“We have been down every year since the recession hit. Business is quiet. It is everywhere, and would be even worse if it wasn’t for the students. People have stopped buying old properties and doing them up. This is supposed to be a regeneration area,” he said.
While house prices in central London actually stalled last month, the average home in Kensington – perhaps boosted by David and Victoria Beckham’s recent purchase of an eight bedroom, Grade II-listed mansion in the area for a reported £30m – is still fetching £1.5m, according to figures from the Land Registry.
Local estate agent James Moran, branch director at Winkworth in South Kensington, was also glad to see Mr Osborne discourage overseas ownership. “Prices are going up and up, but there are fewer homes coming on to the market because of foreign buyers that come in and sit on homes for 20 years as an investment. So a move on capital gains is something we really welcome,” he said.
“It’s a misconception that estate agents applaud selling a high percentage of homes to overseas buyers, because it’s really messing up the domestic economic cycle of people gradually moving up the property ladder.”
Houses in Liverpool’s Kensington tend to be sold at auction to students or housing-benefit landlords. A solid red-brick terrace is likely to fetch £65,000. House prices in Britain are an invaluable indicator of an area’s wealth – as well as the health of the people that live there.
In Liverpool’s Kensington, where household annual incomes are £12,500 below the national average, male life expectancy at 73.5 is five years less than in the rest of the country.
Freelance worker Josh Banks, 25, said the Chancellor simply did not understand the lives of poor people or the horror that the prospect that raising the retirement age to 70 might hold for those lucky enough to be in even insecure or poorly paid jobs.
“Working life for someone in a fast-food restaurant, for example, is very different to that of a politician,” he said. “And people from deprived backgrounds have to work so hard to get a degree. So the prospect of working until you are 70 is very difficult.
“There is so much poverty in Liverpool, so much gambling. Children here have calcium deficiencies. You get third-generation drug addicts, children getting cocaine from their dads. I don’t think the Chancellor understands that,” he added.
Nail technician Tricia Douglas in Liverpool's Kensington, left, feels 'things are going to get worse' with the benefit clampdown, while wine merchant Tuggy Meyer in Kensington, west London, said the 'overseas influx' had badly damaged trade (Susannah Ireland; Colin McPherson)
But it was not just the lifestyles of the very poor that Mr Osborne has failed to grasp.
“This is a staunchly Conservative area,” said Michele Cohen, 69, a lecturer who works in Kensington, London. She dismissed the Autumn Statement as being full of “empty gestures” and funding for unwanted infrastructure projects like HS2 rail.
“The Statement won’t matter much to most of the people here. They are away at their country mansions most weekends anyway. It’s a different world,” she added.
Back in Liverpool at Le Spa, one of a handful of beauty salons thriving among the boarded-up shop fronts and To Let signs, Tricia Douglas was saying goodbye to her latest customers.
The 33-year-old nail technician, a single mother with two children, is currently working 16 hours a week. She has worked out that this makes her around £5 a week better off than if she did not work at all.
But even though Mr Osborne promised further constraints on benefit spending, here in Liverpool the clampdown has been biting for a long time.
“They stopped my money for four weeks when I was ill and missed an appointment,” she said.
Meanwhile, Christmas is looming. Ms Douglas has been paying her £33.70 child benefit each week into a local credit union so that in December she can get a £1,000 loan to pay for the impending holidays.
But that will still not be enough. “I’ve got all these bills and everything but I am putting them on hold until January. I’ll go along to the Citizen’s Advice Bureau because I know I’ll be in debt but I want to have a nice Christmas with the kids,” she said. “I feel things are just going to get worse and worse,” she added.
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