London’s music venues are recovering – but business rate review could stop them in their tracks

A woman dances in a nightclub. Image: Getty.

Much has been written about the revaluation of business rates and their impact up and down the country. Due to an outcry from a number of sectors and business lobbying groups, not least the CBI, the chancellor is considering measures to relieve those facing the highest increases. (In his recent Budget, indeed, he gave pubs a rebate of up to £1,000, though he did nothing for other sectors.)

Most of the businesses worst affected are in zones 1 and 2 in London, where property has, in some cases, doubled in value since the last valuation was conducted in 2008. And it is the independent retail and commercial sector that will feel these rises the most. A large high street chain can shoulder a rate increase of between 25 and 30 per cent; an independent cafe or restaurant often can't. Such an increase, after all, could mean an extra bill of up to £15,000 for a mid-sized premises. That would be enough to close an independent pizza shop, but allow Pizza Express to survive. 

Of these independent businesses that are most threatened, at the top of the list are our grassroots music venues and nightclubs. Over the past ten years, 50 per cent of London's nightclubs have closed, along with 35 per cent of its music venues.

In fact, there have recently been some signs of recovery in the ecosystem. Last month, the Greater London Authority published a report that found there had been no net loss of venues in 2016, a first since 2007. A few new venues have even opened, including The Soundlounge in Tooting, Sankeys East in Romford and, at the end of March, Soul Store West in Kilburn.

Now this rates rise threatens to derail this progress. And there remains something rotten in the way we value these places: when assessing and calculating their rates, we don’t consider their cultural or economic value. These premises are the incubators of the sector, each investing £500,000 directly into new and emerging talent each year. And yet, unlike community centres and libraries, for example, little relief is offered that recognises the benefits these places and spaces bring to their communities. 

Indeed, instead of recognising this value, we are doing the opposite. Take The Lexington, in Islington. In the past, it's hosted many artists who you wouldn't have heard of at the time, but almost certainly would have now. Yet the value of the land the venue sits on has increased significantly, increasing the value of the property and thus its business rate. (It's a similar system to council tax.)


There's another penalty: rates recategorisation often means an increase in annual alcohol licence fees that can also run into thousands of pounds. Paying for that means selling more alcohol, which puts pressure on the businesses to stop providing the unprofitable live music aspect. And so The Lexington, instead of being a music venue and community asset, becomes a solely alcohol-led premises, similar to a chain pub or bar.

All this is compounded by the way that venues in London are being penalised for their success in regenerating its town centres. Cafe Oto opened at a time when Dalston town centre was not as desirable as it is now. Its contribution to the local community – along with those of many other businesses and entrepreneurs – has led to Dalston changing and becoming more desirable. Yet Cafe Oto and the like have not been recognised as agents of change and arbiters of community cohesion; instead, the work they've done merely means the land they sit on has become more expensive, and so their rates are going up.

There is no standard classification of music venues and nightclubs in the system by which we assess rateable value: they not categorised as a particular type of business, so their floor space is assessed not on its need to welcome an audience, but on its size and its capacity to sell enough alcohol to fill that space. Yes, venues and nightclubs often live or die on their ability to sell alcohol, but without the music – the culture – people wouldn’t be drinking that alcohol in the first place. Yet this is not recognised: their cultural value is ignored, and venues are made to pick up the tab in more ways the one.

It would be best if such places were assessed for what they are, rather than being lumped into a general categorisation that more often than not impacts them negatively. They should all pay business rates – this is the only way core services can be delivered – but increases in those rates should take account of their community benefit, and recognise their cultural value. 

If we don’t take a good hard look at how our classification and rating systems measures music venues and nightclubs – or cultural infrastructure in general – we  will lose these places. The recent spate of good news will disappear, and we’ll be back to hearing about venue closures in London and beyond.  

And the same argument applies to other sectors, too: if we don't recognise the value of independent cafes, there is a danger that rate rises will one day mean that Costa Coffee is the only place that'll sell you a flat white. 

The author would like to thank Niall Forde, the Music Venue Trust and Nordicity for support in writing this article. 

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The Adam Smith Institute thinks size doesn’t matter when housing young professionals. It’s wrong

A microhome, of sorts. Image: Wikimedia Commons.

The Adam Smith Institute has just published ‘Size Doesn’t Matter’, a report by Vera Kichanova, which argues that eliminating minimum space requirements for flats would help to solve the London housing crisis. The creation of so-called ‘micro-housing’ would allow those young professionals who value location over size to live inside the most economically-active areas of London, the report argues argues.

But the report’s premises are often mistaken – and its solutions sketchy and questionable.

To its credit, it does currently diagnose the roots of the housing crisis: London’s growing population isn’t matched by a growing housing stock. Kichanova is self-evidently right in stating that “those who manage to find accomodation [sic] in the UK capital have to compromise significantly on their living standards”, and that planning restrictions and the misnamed Green Belt are contributing to this growing crisis.

But the problems start on page 6, when Kichanova states that “the land in central, more densely populated areas, is also used in a highly inefficient way”, justifying this reasoning through an assertion that half of Londoners live in buildings up to two floors high. In doing so, she incorrectly equates high-rise with density: Kichanova, formerly a Libertarian Party councillor in Moscow, an extraordinarily spread-out city with more than its fair share of tall buildings, should know better.

Worse, the original source for this assertion refers to London as a whole: that means it includes the low-rise areas of outer London, rather than just the very centrally located Central Activities Zone (CAZ) – the City, West End, South Bank and so forth – with which the ASI report is concerned. A leisurely bike ride from Knightsbridge to Aldgate would reveal that single or two-storey buildings are almost completely absent from those parts of London that make up the CAZ.

Kichanova also argues that a young professional would find it difficult to rent a flat in the CAZ. This is correct, as the CAZ covers extremely upmarket areas like Mayfair, Westminster, and Kensington Gardens (!), as well as slightly more affordable parts of north London, such as King’s Cross.

Yet the report leaps from that quite uncontroversial assertion to stating that living outside the CAZ means a commute of an hour or more per day. This is a strawman: it’s perfectly possible to keep your commuting time down, even living far outside of the CAZ. I live in Archway and cycle to Bloomsbury in about twenty minutes; if you lived within walking distance of Seven Sisters and worked in Victoria, you would spend much less than an hour a day on the Tube.

Kichanova supports her case by apparently misstating research by some Swiss economists, according to whom a person with an hour commute to work has to earn 40 per cent more money to be as satisfied as someone who walks. An hour commute to work means two hours travelling per day – by any measure a different ballpark, which as a London commuter would mean living virtually out in the Home Counties.

Having misidentified the issue, the ASI’s solution is to allow the construction of so-called micro-homes, which in the UK refers to homes with less than the nationally-mandated minimum 37m2 of floor space. Anticipating criticism, the report disparages “emotionally charged epithets like ‘rabbit holes’ and ‘shoeboxes,” in the very same paragraph which describes commuting as “spending two hours a day in a packed train with barely enough air to breath”.


The report suggests browsing Dezeen’s examples of designer micro-flats in order to rid oneself of the preconception that tiny flats need mean horrible rabbit hutches. It uses weasel words – “it largely depends on design whether a flat looks like a decent place to live in” – to escape the obvious criticism that, nice-looking or not, tiny flats are few people’s ideal of decent living. An essay in the New York Times by a dweller of a micro-flat describes the tyranny of the humble laundry basket, which looms much larger than life because of its relative enormity in the author’s tiny flat; the smell of onion which lingers for weeks after cooking a single dish.

Labour London Assembly member Tom Copley has described being “appalled” after viewing a much-publicised scheme by development company U+I. In Hong Kong, already accustomed to some of the smallest micro-flats in the world, living spaces are shrinking further, leading Alice Wu to plead in an opinion column last year for the Hong Kong government to “regulate flat sizes for the sake of our mental health”.

Amusingly, the Dezeen page the ASI report urges a look at includes several examples directly contradicting its own argument. One micro-flat is 35 m2, barely under minimum space standards as they stand; another is named the Shoe Box, a title described by Dezeen as “apt”. So much for eliminating emotionally-charged epithets.

The ASI report readily admits that micro-housing is suitable only for a narrow segment of Londoners; it states that micro-housing will not become a mass phenomenon. But quite how the knock-on effects of a change in planning rules allowing for smaller flats will be managed, the report never makes clear. It is perfectly foreseeable that, rather than a niche phenomenon confined to Zone 1, these glorified student halls would become common for early-career professionals, as they have in Hong Kong, even well outside the CAZ.

There will always be a market for cheap flats, and many underpaid professionals would leap at the chance to save money on their rent, even if that doesn’t actually mean living more centrally. The reasoning implicit to the report is that young professionals would be willing to pay similar rents to normal-sized flats in Zones 2-4 in order to live in a smaller flat in Zone 1.

But the danger is that developers’ response is simply to build smaller flats outside Zone 1, with rent levels which are lower per flat but higher per square metre than under existing rules. As any private renter in London knows, it’s hardly uncommon for landlords to bend the rules in order to squeeze as much profit as possible out of their renters.

The ASI should be commended for correctly diagnosing the issues facing young professionals in London, even if the solution of living in a room not much bigger than a bed is no solution. A race to the bottom is not a desirable outcome. But to its credit, I did learn something from the report: I never knew the S in ASI stood for “Slum”.