The threat of Hexit: could the London Borough of Havering really be about to secede from the capital?

Here we go again. Image: Getty.

It’s easy, when talking about politics, to belittle your opponents: to treat those who disagree with you, not as smart, decent, honourable people who simply happen to hold different views, but as misguided, stupid or, worst of all, evil.

This problem, I suspect, has always been there. But now, in the age of social media and filter bubbles, we can see it happening in real time. Indeed, we can get pulled into it, finding ourselves moved to mock or abuse the other side by nothing more than the desire for the likes or retweets that signal the approval of the in group.

This is a terrible trend that is gradually rotting the body politic from the inside, and I wish I knew how to stop it. Sadly, I don’t. So:

Bloody hell, look at this bunch of fucking muppets. From the Evening Standard:

Havering Council is set to vote on a plan dubbed ‘Hexit’, under which it would seek to renegotiate its relationship with the London Mayor and City Hall.

But the proposal - tabled by Ukip councillor Lawrence Webb - has split opinion in the borough.

Mr Webb said the plan was about “taking control” of the area’s future, but critics argued it could lead to major changes in policing and other emergency services.

Havering, if you’ve never been there, is London’s easternmost borough: a chevron-shaped chunk of suburbia pointing out into Essex, the county from which it was carved and to which it still feels an emotional pull. Its largest town is Romford; it also contains Hornchurch, Upminster and not a great deal else.

It is also, it’s worth noting, London’s whitest borough. In 2013, the population of London was 42 per cent black or minority ethnic. In Havering, it was just 14, which actually makes it slightly whiter than England as a whole (15 per cent). This may go some way to explain the borough’s identity crisis, and the fact that, even after 52 years as part of the capital, many there don’t feel like Londoners.

Much of the city prides itself on its diversity and its openness to people of all races and identities. Havering, though, looks politically much more like the Essex commuter towns to its east. Nearly 70 per cent of its voters opted for Leave in last year’s referendum on Brexit. Of the borough’s 54 councillors, just two are from the Labour party. It’s dwarfed not only by the Tories (22) and UKIP (6), but by three different residents’ associations. The borders of Havering are just eight miles from Hackney. Culturally, though, they’re on different planets.

So. Leaving Greater London would be a sensible idea then, right?

Wrong. It would be a very, very silly one.

Lawrence Webb has form for this kind of embarrassing grandstanding. In January 2016, the UKIP councillor orchestrated another vote, in which Havering voted to leave the European Union. What the point of this was I’m not exactly clear, since London Boroughs are not really allowed to set their own foreign policy, but it clearly made the local UKIP lot feel big, which I guess was the important thing.


(When I wrote about this, incidentally, I was accused on Twitter of being a typical metro lib showing contempt for the natives. I pointed out that I grew up in Havering, that most of my family still live there, and that I in fact I am one of the natives. I also asked my accusers when they’d last visited a place they were so concerned to speak for. Eighteen months on, I am still awaiting their response.)

In fact, there are genuine parallels between Brexit and Hexit: both votes represent a clash between identity and practicality. Yes, in terms of how people perceive of themselves, there are many in the borough who think of it as Essex more than London. But when you’re thinking about boring practical things like transport, policing or emergency services – or, in the case of Brexit, like trade regulations or what to do with nuclear fuels – identity is not always a great guide to what you should do.

After all, the residents of Havering need to be able to commute to the City or Canary wharf. The local buses need to cross borough boundaries, into Barking or Redbridge. The borough is part of London’s housing market, too, so the idea of running an entirely independent planning policy strikes me as a nonsense: in physical terms, it’s part of the broader conurbation, and it makes sense to manage it as such.

What’s more, were the council to quit London and become a unitary authority, it would find itself responsible for a whole bunch of support services that are currently pooled across Greater London. This, one suspects, might be expensive. To be fair to the council leader, the Tory Roger Ramsey, he seems acutely aware of this:

...Ramsey slammed the idea, saying the potential move would be a “complex adjustment” for Havering residents that would affect major services.

He said: “We’re part of the Metropolitan Police, the London Fire Brigade, Transport for London, and that would be lost.”

In other words, feeling like you’re from Essex is all very well. But you still can’t eat sovereignty.

The vote on whether to renegotiate Havering’s relationship to the capital takes place on Wednesday 26 July. But the results won’t matter, I suspect. As a council vote, not a referendum, it will carry less force than the Brexit vote. More importantly, the council has no power to unilaterally quit Greater London. To quote a spokesman for the communities department:

“The boundaries in London are set by parliament – any changes would require further legislation.”

Somehow, I don’t imagine this being a priority. So my instinct is that Hexit is never going to happen.

Then again, I thought that about Brexit, too.

Bloody hell, though. Look at these muppets.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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High streets and shopping malls face a ‘domino effect’ from major store closures

Another one bites the dust: House of Fraser plans to close the majority of its stores. Image: Getty.

Traditional retail is in the centre of a storm – and British department store chain House of Fraser is the latest to succumb to the tempest. The company plans to close 31 of its 59 shops – including its flagship store in Oxford Street, London – by the beginning of 2019. The closures come as part of a company voluntary arrangement, which is an insolvency deal designed to keep the chain running while it renegotiates terms with landlords. The deal will be voted on by creditors within the month.

Meanwhile in the US, the world’s largest retail market, Sears has just announced that it will be closing more than 70 of its stores in the near future.

This trend of major retailers closing multiple outlets exists in several Western countries – and its magnitude seems to be unrelated to the fundamentals of the economy. The US, for example, has recently experienced a clear decoupling of store closures from overall economic growth. While the US economy grew a healthy 2.3 per cent in 2017, the year ended with a record number of store closings, nearly 9,000 while 50 major chains filed for bankruptcy.

Most analysts and industry experts agree that this is largely due to the growth of e-commerce – and this is not expected to diminish anytime soon. A further 12,000 stores are expected to close in the US before the end of 2018. Similar trends are being seen in markets such as the UK and Canada.

Pushing down profits

Perhaps the most obvious impact of store closures is on the revenues and profitability of established brick-and-mortar retailers, with bankruptcies in the US up by nearly a third in 2017. The cost to investors in the retail sector has been severe – stocks of firms such as Sears have lost upwards of 90 per cent of their market value in the last ten years. By contrast, Amazon’s stock price is up over 2,000 per cent in the same period – more than 49,000 per cent when considering the last 20 years. This is a trend that the market does not expect to change, as the ratio of price to earnings for Amazon stands at ten times that of the best brick-and-mortar retailers.

Although unemployment levels reached a 17-year low in 2017, the retail sector in the US shed a net 66,500 jobs. Landlords are losing longstanding tenants. The expectation is that roughly 25 per cent of shopping malls in the US are at high risk of closing one of their anchor tenants such as a Macy’s, which could set off a series of store closures and challenge the very viability of the mall. One out of every five malls is expected to close by 2022 – a prospect which has put downward pressure on retail real estate prices and on the finances of the firms that own and manage these venues.

In the UK, high streets are struggling through similar issues. And given that high streets have historically been the heart of any UK town or city, there appears to be a fundamental need for businesses and local councils to adapt to the radical changes affecting the retail sector to preserve their high streets’ vitality and financial viability.


The costs to society

While attention is focused on the direct impacts on company finances, employment and landlord rents, store closures can set off a “domino effect” on local governments and businesses, which come at a significant cost to society. For instance, closures can have a knock-on effect for nearby businesses – when large stores close, the foot traffic to neighbouring establishments is also reduced, which endangers the viability of other local businesses. For instance, Starbucks has recently announced plans to close all its 379 Teavana stores. Primarily located inside shopping malls, they have harshly suffered from declining mall traffic in recent years.

Store closures can also spell trouble for local authorities. When retailers and neighbouring businesses close, they reduce the taxable revenue base that many municipalities depend on in order to fund local services. Add to this the reduction in property taxes stemming from bankrupt landlords and the effect on municipal funding can be substantial. Unfortunately, until e-commerce tax laws are adapted, municipalities will continue to face financial challenges as more and more stores close.

It’s not just local councils, but local development which suffers when stores close. For decades, many cities in the US and the UK, for exmaple Detroit and Liverpool, have heavily invested in efforts to rejuvenate their urban cores after years of decay in the 1970s and 1980s. Bringing shops, bars and other businesses back to once derelict areas has been key to this redevelopment. But today, with businesses closing, cities could once again face the prospect of seeing their efforts unravel as their key urban areas become less attractive and populations move elsewhere.

Commercial ecosystems featuring everything from large chain stores to small independent businesses are fragile and sensitive to change. When a store closes it doesn’t just affect employees or shareholders – it can have widespread and lasting impacts on the local community, and beyond. Controlling this “domino effect” is going to be a major challenge for local governments and businesses for years to come.

Omar Toulan, Professor in Strategy and International Management, IMD Business School and Niccolò Pisani, Assistant Professor of International Management, University of Amsterdam.

This article was originally published on The Conversation. Read the original article.