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Railway arch rent hikes by Network Rail will kill off small firms, Tower Hamlets warns transport secretary

PUBLISHED: 10:12 11 July 2018 | UPDATED: 08:26 07 August 2018

Tower Hamlets Mayor John Biggs in call to Network Rail to drop its rent rises for railway arches. Pictures: Mike Brooke

Tower Hamlets Mayor John Biggs in call to Network Rail to drop its rent rises for railway arches. Pictures: Mike Brooke

Mike Brooke

A call to the government and Network Rail has been made by the mayor of Tower Hamlets to halt “damaging rent increases” on small businesses under railway arches.

Mohammed Monnan faced notice to quit his two railway arches in Bethnal Green in 2015 with his Tyre World business having to find alternative after 23 years. Picture: Mike BrookeMohammed Monnan faced notice to quit his two railway arches in Bethnal Green in 2015 with his Tyre World business having to find alternative after 23 years. Picture: Mike Brooke

John Biggs and his cabinet member for economic growth, Motin Uz-Zaman, have written to the Transport Secretary and Network Rail’s chief urging them to reconsider the inflated rents before selling off thousands of under-arch premises across the country.

Some businesses are facing rents up by as much as 350 per cent, the council has learned, with several small firms are being forced to find new premises or close down.

“This is a serious threat to small family businesses and jobs,” Mayor Biggs warns.

“Tower Hamlets is a hard-working entrepreneurial borough and home to many small businesses which are important to our economy.

“Network Rail is publicly owned and this decision will do nothing but harm to communities—I urge them to reconsider this decision.”

The rises are part of a strategy to make the value of the arches national portfolio estimated to be worth £1billion be more attractive to investors ahead of the planned sale, the council believes.

Cllr Motin Uz-Zaman said: “Many businesses are worried about the sell-off. Business space isn’t easy to come by and the decision to raise rents before they try to sell the arches to the highest bidder is going to cause far more harm than the proceeds from the sale, trying to turf out their long standing tenants.”

The council is warning Secretary of State Chris Grayling about the “crippling effect” the rent rises will have on businesses and the impact on space available in inner city areas.

It is backing the ‘Guardians of the Arches’ campaign group trying to stop the rent hike.

The mayor’s letter to Chris Grayling and Network Rail chief executive Andrew Haines warns that the increases as much as 350pc have already had “crippling effect on businesses which have been driven into debt” which may be forced to close.

The letter stresses that Network Rail is a publicly-owned company while the mayor fails to see how the “deeply damaging decision will benefit the public”.

Network Rail announced in November it was selling off its commercial estate business, mostly converted arches, because they were “not essential for running the railways”.

But it denied the Tower Hamlets claim that some rents were up as much as 350pc.

A rail spokesman insisted: “No business has experienced an increase anywhere near that amount—the vast majority were 10pc or less. The rent reviews are not connected in any way to the sale and all current leases would transfer to the new buyer with arrangements and notice periods unchanged.”

The sell-off would help pay to upgrade the railways in “the biggest investment programme in the railway since Victorian times without a burden on the public purse”.

Motor traders in Bethnal Green protested three years ago when they handed a 1,000-name petition to the town hall to stop evictions in Hadleigh Street and Malcolm Place under the Liverpool Street main-line, first revealed in the East London Advertiser in 2015.

A deputation was led by Tyre World Trading’s owner Mohammed Monnan who was given notice to quit two arches he had rented for 23 years and was offered no alternative.

Network Rail is Britain’s biggest landlord to small businesses, with to 4,000 tenants in London alone.

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