Small, independent businesses are at the heart of what makes Hackney such a fantastic borough; they’re a vital part of the creativity, diversity and vibrancy which we’re known for.
They’re valued by the different communities they serve, play a key role in a complex economic environment and create thousands of jobs and opportunities for our residents. The workspaces from which they operate are the proving grounds for enterprises which can go on to become sector leaders.
I’ve been stating these truths, which of course apply to London and cities across the UK, throughout my time as directly elected Mayor of Hackney. I was saying it on a daily basis during our high-profile campaigning – alongside our business community, the East End Trades Guild, and neighbouring boroughs – against the government’s huge and ongoing hikes in business rates, which resulted in a 10,500-strong petition being handed to 10 Downing Street.
⚡️ Today, we set out our demands.https://t.co/Ila5rYa8B5
— Guardians of the Arches (@ArchesGuardians) August 6, 2018
Now, I’m regularly stating them again. This time the threat comes from Network Rail’s plan to sell off the management of its properties, including 4,500 railway arches, in one job lot. They’re down to the final four bidders in the contest for this portfolio, thought to be worth more than £1bn. We don’t know who the hopefuls are, but I doubt it’s much of a stretch to say their priority will be generating as much profit as possible for shareholders. That means increasing rents.
This is only the latest development in the plight of our independent business based in Network Rail arches, of which there are 182 in Hackney. Before the publicly-owned organisation announced it was selling off its arches to the private sector, it was already hitting its tenants with huge rent hikes, often at short notice with little room for negotiation. They seemed based on a crude measure of an area’s ‘market rate’, not taking into account specific circumstances, the need for balanced local economies with a variety of different business types – many of which will never be able to generate the same profit as others – or planning policies.
For many of the long-established independent businesses which have made Hackney’s railway arches the vibrant and desirable places they are today, what they are being asked to pay is simply unaffordable and is already forcing some to close.
I, alongside Hackney South and Shoreditch MP Meg Hillier, have had numerous correspondence and meetings with Network Rail. Unfortunately, whatever encouraging words we received about a more collaborative approach, including from Ministers, never manifested themselves on the ground.
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The increased concern now, fantastically raised to national profile by the Hackney-born Guardians of the Arches, is that whichever business or consortium buys the arches will double down on the drive for profits.
It was in our recent letter to Transport Secretary Chris Grayling where, alongside calls for him reconsider the sell-off entirely, or divide it into smaller areas and take a more localist approach, we suggested that we could explore buying and running the arches ourselves.
We’d need to see the details of these properties, how they’re valued, look at their books, and consider how they could be successfully and sustainably managed, but Hackney Council has a strong record of acquiring commercial properties and running them successfully; integrating them within diverse business environments, an area’s cultural and social fabric, and our wider aspirations and policies. These notions are anathema to the mantra that free-market-drive-for-profit always works best, but this mantra feels increasingly anachronistic in 21st-Century Britain.
Hackney's willingness to consider purchasing the arches in its borough shows that this isn't a done deal – now let other councils follow @PhilipGlanville's lead! #saveourarches https://t.co/Efq9KF5bEV
— John Bird (@johnbirdswords) July 24, 2018
A common view, like with business rates, is that Hackney’s just become a victim of its success: ‘the market has spoken, you’re being naive’. Bring on the chains and swap the bakeries, garages and workshops for more profitable bars, estate agents and restaurants. I don’t buy this and I never will. There is a middle ground between the need for profit and freedom from red tape, and the desire for social benefit and diverse economies.
What stands in stark relief to Network Rail is the way Transport for London is now communicating and negotiating rents with tenants in its arches. At the same time we starting raising concerns with Network Rail, we were doing the same with TfL. The difference is that they decided to take a more collaborative approach with tenants, councils and other groups. I understand this is the result of a shift in strategy and investment in new teams, and should be applauded. It’s a clear demonstration that a more sophisticated approach to tenant management is entirely possible.
Transport Minister Jo Johnson has reportedly agreed to consider alternatives to Network Rail’s current approach. Let’s hope this was more than just platitudes to diffuse a meeting with campaigners, and heralds the start of a more collaborative and sustainable way of doing business and cultivating our independents, not destroying them.