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(en) Black Flag #222 hackney

From anarcho@geocities.com
Date Tue, 10 Dec 2002 03:17:46 -0500 (EST)

      A - I N F O S  N E W S  S E R V I C E

"You Can't Live On a Web Site"
Privatisation and Gentrification, Reaction and Resistance,
in Hackney's 'Regeneration State'

Gentrification is having the effect of social cleansing of working
class communities accross large swathes of inner city London, and other
major cities. In Black Flag 220 we covered the effects of
gentrification in Berlin, Germany and explored strategies used by
german activists to fight back. Below is an edited version of an
article documenting the sweeping gentrification of Hackney, an east end
London Borough. In the next issue we will explore the strategies used
by local activists to deal with the privatisation and take-over of
their services and communities.

The London Borough of Hackney in the past few years has been the last
word in municipal incompetence, swingeing cuts, privatisation, and
eastern european levels of poverty - a standing joke amongst most
Londoners. A range of 'regeneration' anti poverty programmes had been
underway since the 1990s and the highest number of housing
privatisation ballots in the country had been held.
    But by 2001, what was new was the booming real estate market not
just of trendy Hoxton in the south, but across the whole Borough. May
2001 saw the New Labour Council emerging from a period of coalition
rule with the Conservatives - Hackney was after all the home of some of
New Labours leading ideologues1 and is now the testing ground for New
Labour's restructuring of the Inner City.
    This piece will argue that the collapse of the local Council and
its replacement by a skeletal 'regeneration state' has furthered
gentrification and the gradual eviction of the existing multi cultural
working class community by:
- further property sales with fewer controls on development leading to
a population density which excludes low income families with children
- reduction in support services for working class people, especially
- low income people [especially younger people in the private rented
sector ] being driven out of the Borough by the chaos accompanying
housing benefit privatisation
- housing privatisation [stock transfer] leaving families [led
generally by women] with almost no access to Council housing and a
nightmare scenario with which to threaten existing Council tenants
    Meanwhile, large developers are increasingly crass in their
proposals. The initial pioneer 'arty' gentrifiers are now finding
themselves under threat from the office development needed for the
reinforcement of London as the financial centre of the European Union.
    There have been some efforts [e.g. by mayor Ken Livingstone] to
extract some of the profits from these developments to restructure
social structures around the City. But instead of existing working
class multicultural communities, a new 'worthy poor' of key workers
[mostly white] will receive semi subsidised housing providing a safe
social mix for the new rich.
    The response of the left to this crisis has been disappointing - in
fact the populist right around 'Hackney First' are making the most
clear gains. With the defeat of a determined UNISON campaign largely
due to lack of a sustained second front ... community campaigners need
to reassess strategies.

Hackney - a sketch:
Hackney is an inner city London Borough bordering the The City. It has
a population approaching 300,000 of which over 50% are from ethnic
minority communities. Hackney has also the biggest lesbian population
in Britain and allegedly the most artists in Europe.
    The average income is half that of the London average and 40% of
the population live on Income Support. Some 40% of households are
Council tenants, about 10 % are tenants in the private rented sector,
another 10% live in recently privatised ex Council flats. The remaining
40% include some Yuppies but also a significant number of working class
owner occupiers.
    Without wanting to over-generalise - the south of the Borough
[Hoxton, Shoreditch and Haggerston] has both more Council housing than
the north, and more of the 'digital yuppies' in renovated lofts along
with a few streets of bourgeois housing in De Beauvoir. The south of
the Borough was a National Front stronghold in the 70's, with the
fascist's national HQ located on Shoreditch High Street in 1979. It's
now a successful multicultural community, although older white
residents often dominate residents associations and other local groups.
    Stoke Newington in the north of the Borough has much of the rest of
the gentrified housing, mostly terraced street property. Clapton and
Stamford Hill in the north east have more working class owner
occupiers. Homerton and Hackney Wick in the east are similarly poorer.
Large estates and small pockets of terraced housing and mixed
industrial and warehousing estates are found throughout the Borough.

A Council in financial collapse:
The UK's first ever 'Section 114' notice of impending bankruptcy was
posted in late October 2000. All non statutory spending was cancelled -
and all casual staff were immediately dismissed. For example, up to 50%
of bin men were sacked. A temporary reprieve was granted with a batch
of sales, cuts and privatisations. But the summer of 2001 saw the
threat of Central Government take-over once more.
    Residents don't enjoy low levels of tax to go with the low level of
services. Council tax rates are amongst the highest in the country yet
it makes up less that 10% of the Borough's income - most of the rest
comes from government subsidies which have been cut by over £100M in
the past few years.2
    As seen below, the cuts due to the Council's financial crisis have
been to services for working class people, and the skeletal
['regeneration'] local state is unable to regulate a gentrification
building boom. However, even in the late 1990s before the latest round
of cuts, the Council was an albatross around the neck for anti
privatisation campaigners ... after defeat in 7 stock transfer
privatisation votes it's clear that working class tenants would do
almost anything to get away from Hackney Council. Defence of the status
quo was never a route to popular support.

Privatisation of property and services:
The Section 114 notice was the lever used in the most difficult
privatisation - that of waste disposal. This part of the workforce was
traditionally the most militant - UNISON demonstrations often were led
by 'borrowed' garbage trucks. In August 2000 these workers had defeated
an attempt to privatise the service3. But by December the waste
management contract was sold to Service Team. The much reduced and now
isolated workforce was willing to give their new employers a chance and
didn't join in the industrial action4. But in early 2001, Service Team
sold their whole company to the American TNC Cleanaway.
    Since then the pace of privatisation has if anything quickened,
particularly with the defeating of industrial action and the Labour
group winning and then keeping a majority. Privatisation is
increasingly targeted to facilitate gentrification and cut services for
local working class people, especially working women.
    June 2001 saw a total of 135 different properties listed for sale
to raise an estimated £70M including:
a community arts venue, two nurseries, a community boat club, part of a
school and maintenance depot, at least two semi derelict open spaces
used by their communities as parks and a plot used by a school for kids
with special needs.
Most of these sales were in gentrification 'hot spots' like Hoxton and
De Beauvoir. Ironically a road garden in an area of the already
gentrified Stoke Newington was saved after protesters 'planted a tree
as a symbol of their commitment'.5
    At the same time a further 2 nurseries and a play group were
closed.6 The Borough's 2 remaining swimming pools were put out to
private tender whilst the pool in the heart of Haggerston remained
closed.7 Instead, opening a brand new pool in the gentrified north
remained a priority for the Labour group despite being £15M over budget
at £26.7M8
    Other services were also under threat - for example two arts
centres were under threat of closure - so that in the Borough 'with the
most artists in Europe', working class people were not to have access
to any arts facilities ... except for the newly opened Ocean [see
    Compared with the demos of the year before, the level of resistance
to these cuts was minimal. A small demo was called by Hackney
Fightback. Pensioner activist Mynra Shaw pointed out that:
    "... Hackney Council continues to sell off property to speculators
and developers. The presence of more and more of these speculators,
interested mainly in developing profits, mean they have an overloud
voice in deciding what the 'open market' is in Hackney. The voice of
tenants and residents is on the way to being wiped out. This is more
serious, as the Fair Rents Officer takes the open market into
consideration when he sets the rents for remaining Council and housing
association tenants."9
    The reality of privatisation was underlined by Nord Anglia, who run
the privatised parts of the education department and overcharged the
Council £400,000 for their 'services.'10 However it was on the
privatised estates and in the effects of the contracted out Housing
Benefit service that the effects were most severe.
    Hackney Council had a long, well documented history of corruption.
Under regeneration schemes, what controls there were on political and
financial corruption were even more limited and safeguards of good
services for local people were non existent. ITNET, who won the Housing
Benefit administration contract in the late 1990s, understood this
well. Their first act after taking over was to cut the workforce by a
third.11 Within months the service, which was never very good, plunged
to being disastrous.
    The details of ITNET need their own article - but I can identify 3
major different effects:
- enormous pressure was put on the finances of the Council and the
Housing Associations in the Borough
- enormous stress was put on every Council and Housing Association
tenant on benefit due to their being continuously in rent arrears and
receiving notices of Seeking Possession from their landlords. [In
addition tenant reps and Councillors had their democratic rights
curtailed due to ITNET related rent arrears. e.g. a Clapton tenant rep
was sacked from the CCHT Board for rent arrears12 and an independent
Councillor lost voting rights due to ITNET related rent and Council tax
- in the private rented sector safeguards against evictions did not
apply ... and while many tenants already in place hung on, private
landlords tended to refuse to take on Housing Benefit dependent
    In April 2001 the contract with ITNET was broken, leaving the
Council holding the baby. While the service has somewhat improved, the
long term effect on low income people's access to the private market
rents sector in Hackney is likely to remain - the already fertile field
is left clear for further gentrification.

Gentrification in Hoxton:
"The chicest place in the inhabited universe" - The New Yorker:
    Around 1990 when the Shoreditch triangle in the south of Hoxton was
still largely semi derelict ex clothing industry warehouses, the
Dalston City Challenge corridor was drawn to include a large part of
this area. The regeneration programme was varied:
- A new cinema for the London Film Makers Co-op [The Lux]14
-Redevelopment of Hoxton Square15
-Renovation of the Arches under the 'Tube line to be'
-Funding for basic refits of warehouses given to private landlords such
as Glasshouse
    Consciously or not, this provided the fuel for the gentrification
of Hoxton. At first abandoned warehouses were converted into lofts and
a couple of existing bars became busier. Ill effects were seen early -
with lofts pumping their sewage onto the Pitfield estate and stairwells
being used as toilets and places to have sex by people using the
    A gentrification whirlpool, aided by central government subsidy,
began. By the late 1990s larger scale developments were more common.
Some were wholly private and prices for lofts were now topping
£400,000. Others were 'market rent schemes' from 'charitable' housing
associations - beginning with the award winning Shepherdess Walk scheme
in 1999, where rents were a minimum of £145 a week. In response to
local tenants saying that it was "fancy flats for yuppies" a
spokesperson said:
"The building will be clad in cedar wood and terracotta and will look
very nice."17"
    Meanwhile on Council estates funding for repairs was particularly
tight. On estates primed for privatisation no repairs were done at all
in the lead up to ballots and estate managers were not replaced. On the
other [better] estates tenant representatives were supporting:
    "... people with cockroach infestation or people who have to live
and sleep in rooms that are so damp they're covered in fungus and the
wall paper is falling off ..."18
    By 2001 market rents in social housing were reaching £200 a week.
While larger Housing Associations such as Peabody led on market renting
- other HAs began to get in on the act. But even Peabody couldn't get
rid of everything - it had to sell a block to Metropolitan after
finding that yuppies weren't willing to pay market rents to live
opposite the Haggerston estate!
    'Shared Home Ownership Schemes' were used to sweeten the pill and
to ease planning objections. The effect of this development was that
tenants who had exercised their 'right to buy' and then let out their
ex Council flats could also charge rents of £200 plus a week for a
basic 3 bed flat, further boosting the impetus behind right to buy.
    Speculators actively leafleted estates with offers to buy out
secure tenant's 'right to buy.' They would provide cash [sometimes as
little as £5,000] to a tenant who would buy the flat [with the
speculator's money] signing over the rights to let it out to the
speculators, and selling it on after the waiting period of 2 years.
This meant 2 bedroom flats could be picked up for as little as £20,000
plus the payment to the tenant.
    By 2000 the London property market had heated up to such an extent
that a new round of tower blocks was being proposed for the inner city.
Ken Livingstone, the newly elected mayor, gave his support for these so
long as they provided subsidy for social housing schemes and transport
in east London19. However, rather than affordable rented housing, it
was more of the not very affordable shared home ownership schemes for
'key workers'20.
    The long term plan is clearly to replace the City's poverty
stricken necklace of estates in Finsbury [Islington], Shoreditch and
Whitechapel [Tower Hamlets] with a mix of the new rich and the new
'deserving poor' of key workers.

The estates are just a stone's throw away:
By 2000, developers were increasingly confident and using all available
loopholes to cash in. Even when leases held rents for 3 years, service
charges could be jacked up and added to the original rent21. Sometimes
this meant that tenants wanting to break leases lost not only their 3
months deposit but had to pay extra to get out of the lease. David
Nicholson of Glasshouse - who with government cash developed many of
the early lofts said:
    "We are not a charity, we are a commercial business ... Market rent
in Shoreditch has risen considerably in the last 18 months. We've got
tenants who are willing to pay ... and are not going to take up hours
of our time complaining about the nitty gritty."22
    And it wasn't just businesses evicting tenants on cheap leases. In
August 2000, the charity running Shoreditch Town Hall Trust terminated
the leases of 20 small businesses and charities to allow the building
to renovated. As the Daycare Trust commented on their eviction - "we
thought we were a part of [the Town Hall Trust's] long term plans. It's
obvious we're not."23
    By 2000, not only were the concerns of Hoxton's majority - working
class Council tenants - irrelevant but the concern voiced in the local
media was primarily that gentrification would "spell the end for the
arty atmosphere that began the revival."24 The Hackney Society voiced
concerns that the "huge increases in land and property values [...
were] threatening the future viability of local charities, community
groups and small businesses ... small businesses are also being hit
hard in particular new businesses in the IT and creative sectors - the
very businesses Hackney is keen to attract."25
    Working class people appeared in this discussion only as an
ungrateful or criminal element. The project director at Shoreditch Town
Hall spoke of 'resentment' from older residents over £500,000 lofts
next to their run down Council flats, while a gallery director from
Hoxton Square said:
    "What's becoming more apparent are the crime levels. The estates
just off Hoxton Street are just a stones throw away. There's increasing
resentment. More and more [very large!] windows are being smashed."26
    Reports that homeless families were again being put into bed and
breakfast - in part because the Council had sold the estates where they
had been placed previously began to provide a context for this. By
February 2001, while the 380 hostel places were full and 450 families
were in bed and breakfast, often outside the Borough27, at least 15 %
of the 7,000 privatised flats28 were standing empty [following a pre-
privatisation policy of running down the estates] and at least another
100 street properties had been sold to subsidise privatisation
schemes29. The clear losers in all of this were working class women and
their families - they were not welcome in New Labour's Hackney.

Who runs Hoxton then?
In March 2001 Shoreditch's new elite attempted to ban Abba's Dancing
Queen! Residents of live-work units in Redchurch Street complained
about the Village People's YMCA as well as the Conservative Party's
Annual Winter Ball which were held in marquees on the Bishopsgate
    "We cannot sleep because it goes on until one in the morning and in
the summer we cannot relax on our rooftop garden without having to
listen to Chris de Burgh's 'Lady in Red' or some other dreadful
    'Traditional' East End culture in the area had no chance then - the
Brick Lane Music Hall faced closure at the end of 2000 when its rent
went up 400% to £100,000 a year. The landlord said: "unfortunately we
are not a charity ..."31
    More celebrated, is the case of Spitalfields market - "a vivid
antidote to the blandness that corporate culture brings in its wake" -
next to ABN-AMRO's32 headquarters and Liverpool Street Station. Half of
the market has already been lost to an office development and the rest
is under threat despite the protests of market owners. Luminaries such
as Terrence Conran are weighing in to protect the creative hub of
gentrification and are willing to trade a bigger development elsewhere
to protect it.33 While the new residents fight a losing battle against
Europe's finance capital or prepare to move to the next chic scene, the
interests of the working class majority are nowhere to be seen.

"... it's so close to the City, firms won't even know they're in

The 'Regeneration' of the Town Hall Square
Broadway Market is a narrow street market between two parks. It makes a
geographical link between Hoxton and the Town Hall precinct and is
already showing the Hoxton effect. Five years ago it had one pub and a
listed pie and eel shop which baked veggie pies on demand. Now there's
2 expensive restaurants, a Japanese noodle bar, 1 yuppie bar, a health
food bar and half a dozen boutiques. Not far away, 'regeneration' money
was used to do up a derelict church, where a trendy club is now based.
Facilities for local people have not similarly expanded - as indicated
earlier it is here in the south of the Borough that cuts in provision
are tending to be targeted.
    Further north, just south of the town hall, is Ellingfort Road.
Here until 1999 were around 30 squatted homes - which have now
voluntarily incorporated themselves [keeping just over half the homes]
into an existing Housing Association35. The rest of this area is now
booming with loft live work units.
    And on to the Town Hall Square - the site of another regeneration
programme. Directly opposite is the new Ocean music venue, opened on
the site of the old Hackney Library and Museum. It has already
attracted criticism over the price of tickets [up to £27], the wages of
the director [£80,000] and it's function as an oasis for a "rich young
elite."36 Relations with local people started poorly with complaints of
sexual harassment and parking problems. Noise complaints were dismissed
as "whinging."37 The Ocean started with high hopes for participation
and access ... it'll be interesting to see how it evolves. I suspect
that the social pressures from gentrification and the regeneration of
the rest of the square will force it in a less and less accessible
    The Town Hall Square, previously frequented by local street
drinkers and the odd demo against the Council, became subject of Labour
Council plans to spend £1.1 M doing it up. Critics pointed out that 4
different types of limestone wasn't perhaps the aim of Neighbourhood
Renewal funding which paid for over half of the scheme. The Hackney
tree wardens mounted a vocal campaign against the planned loss of 15
trees and pointed out that meetings were not open to the public and
minutes were kept secret.
    Complaints about how the regeneration of the Square was going could
be assuaged by promises of a new Technology and Learning Centre [a
rebuilt library]. But cuts in the Learning and Leisure budget meant
that "the Council can barely afford to buy books for the new library
... and has set aside £150,000, warning that it may cut the Borough's
book fund."38
    Opposite the TLC lies the Hackney Empire and the Samuel Pepys Bar.
The Pepys was for years the late opening 'alternative' bar in Hackney.
It was shut along with the Empire for refurbishment in May 2001 ... the
ensuing street party in the Town Hall square got a bit out of hand -
although participants commented that it was more simulacra than
reality. What's clear is that they didn't want to go to the Ocean!39

Resistance and Reaction:
Hackney UNISON members fought a determined campaign against Council
cuts and attacks on their wages and conditions from 2000 - 2001. This
needs a separate analysis but Hackney Council workers showed well into
2001 that they were willing to take unofficial action particularly
against victimisation.40 In addition the current Hackney UNISON
officials have been willing to continue a dispute in an attempt to
carry it through to victory.
    But what was stressed to me by a number of UNISON members however
was that their campaign would fail without a 'second front' being
opened by militant community struggle. This never came despite a series
of local disputes over specific closures - some of which were
successful - Burbage School in Hoxton for example.
    The attempt to have a united front of community struggles through
an organisaation called Hackney Fightback fell apart with open splits
between the SWP and the Socialist party - leading to separate
candidates standing in Council by-elections in June 2001.
    Worse still, the Council by-elections showed that the main
beneficiaries of Hackney's crisis far from being the left were the
populist right wing formation Hackney First - who achieved 546 votes in
2 wards versus Socialist Alliance's 513 in 3 wards. In 2001, the BNP
showed that given a crisis in political life - the riots in Oldham as
much as the crisis in Hackney - the english electorate would be willing
to vote for a 'radical' political alternative. In Hackney, with a
organised membership of nearing 1,000 the far left working together
could not do the same. So much for electoralism...

And what about the grassroots?
There were a number of other positive local community campaigns over
the last two years namely:
- Occupation of two of the threatened nurseries (see Black Flag 220)
- Rent Freeze Campaign
- Organising on privatised estates.
    In Shoreditch, community activists working within the New Deal
Trust, alongside the Hackney IWCA conducting mass leafleting work, have
now turned the tide on stock transfer in the south of Hackney. Looking
at this combined approach of confrontation inside and outside the
structures of the regeneration state can begin to answer the question
of how to build mass support for progressive alternatives to
gentrification and privatisation.
In the next issue of Black Flag we look at grass root responses to
gentrification and privatisation in Hackney and elsewhere. We welcome
1 Such as Michael Barber who has moved from Education honcho to be a
top advisor at Number 10.
2Unison eaflet for 7th of March Strike 2001.
3Hackney Gazette 24/8/00.
4Its unclear to what  extent the SWP declaring that the waste workers
were victorious in the fight against privatisation in October, didn't
help in this situation. There could be a certain - thank fuck we've
escaped from Hackney Council - factor linked in with experienced social
democrat managers to explain the waste workers
'giving Service Team a chance.
'5Hackney Gazette 14/6/01 and 28/6/01.
6Hackney Gazette 21/6/01 and 19/7/01.
7Hackney Gazette 5/7/01.
8Hackney Gazette 1/3/01.
9Hackney Gazette 5/7/01.
10Hackney Gazette 21/6/01.
11Personal conversation with HB staff.
12See report in Inside Housing
 February 2000 and Housing Today 24/2/00.
13See Whose Benefit leaflet from Hackney IWCA.
14For criticism of the Lux see letter in Hackney Gazette
 9/12/99 where Dave Young [from Geffreye Estate not the Haggerston
labour Councillor] says "I think the Lux is a perfect example of
'regeneration.' Our money goes into it. It is of no use to us, but only
serves to pull more rich young people into the area - the same people
who are gradually taking over our pubs, our shops and even our homes.
"15A letter in Hackney Gazette
  14/9/00 pointed out the reality of the square's use as a open air
drinking area for yuppies.
16Hackney Independent Spring 2000
17Hackney Gazette 1/7/99 and
Hackney Independent Spring 2000.
18Eugene Francis in Hackney Independent Spring 2000.
19The Observer 3/6/01.
20e.g. teachers and nurses, although behind these paradigms of virtue,
technicians and even housing workers are sneaked in.
21Hackney Gazette 23/3/00.
22Hackney Gazette 23/3/00.
23Hackney Gazette 17/8/00.
24Hackney Gazette 29/7/00.
25Spaces Spring 2001, issue #8.
26Hackney Gazette 29/7/00.
27Hackney Gazette 15/2/01
28The 3 Estates for which I have precise figures the total was
[including squatted homes] over 20%.
29Hackney Gazette 10/12/98 and 14/1/99
30Hackney Gazette 1/3/01.
31Hackney Gazette 16/11/00
32The main Dutch bank ... also known for attacks on inner city
communities in Amsterdam.
33The Observer 15/7/01.
34Hackney Independent
 Summer 1999 quoting developer Peter Moreno [or Moron as the
spellchecker suggests] from the Hackney Gazette
35See Hackney Gazette 16/8/01.
36Hackney Gazette 29/3/01 - see also letters from staff and the
director defending the venue on 12/4/01.
37Hackney Gazette  31/5/01.
38Hackney Gazette 26/7/01.
39Hackney Gazette 24/5/01 and Evening Standard 21/5/01.
40See Hackney Gazette 29/3/01 for Transport Workers, and 5/7/01 for
dust men as well as the ongoing actions over Noah Taylor who was sacked
by the Council in August 2001.

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