A bend in the river
From Griffith REVIEW Edition 25: After the Crisis
© Copyright Griffith University & the author.
Written by Barbara Gunnell
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The opening credits of EastEnders, the most watched television soap in Britain, show an aerial view of the River Thames snaking west to east through London on its way to the sea. The camera pulls out to reveal the distinctive skipping-rope loop where the river dips south around a tongue of land known as the Isle of Dogs. This almost-island, with a generous spill-over a couple of miles north, west and east of the loop, is the East End, its boundaries more or less following those of London's poorest borough, Tower Hamlets. For more than two centuries, this bend in the river generated stupendous wealth in the midst of poverty of a persistence and intensity unmatched in any advanced capitalist nation. For most of London's history, ships navigated around the Isle of Dogs, bringing in everything an island could consume or transform for re-export and returning with everything a rapidly industrialising nation could produce, including convicts sentenced to transportation to Australia. The rich became fabulously rich, and so did the City of London. This teardrop of land was the crucible for creating the greatest concentration of wealth in the world.
But the wealth that drove the expansion of the British Empire did not trickle down to the hordes who scratched a living loading and unloading, stitching and scrubbing, selling services and selling sex. As commerce grew, so did the needy population of the East End, more than doubling in the nineteenth century and creating the infamous slums graphically depicted by, among others, the journalist Henry Mayhew, who recorded in meticulous detail the daily lives of London's working poor; the more florid novelist and campaigner Charles Dickens; and the social reformer Charles Booth. Like most of his class, Booth initially saw Mayhew and Dickens as peddling socialist fiction until he investigated for himself and mapped and categorised every alley, courtyard and road in the miserable East End.
When he was writing, in the late nineteenth century, socialism was certainly in the air. The refugees who arrived at this bend in the river included thousands of religious and political dissidents. Friedrich Engels, by then living in London, believed that the East End working class would rise up as its counterparts in Europe had done. It didn't, but he lived to see the birth of the union movement, born of two significant political strikes in the East End: the Bryant and May match girls of Bow in 1888, and the Great Dock Strike of 1889.
The great wealth turbine created by the Victorians shuddered to a halt when the loading and unloading of ships moved downstream to coastal container ports, during the 1970s and '80s. But the Isle of Dogs was soon at the heart of a second great explosion of wealth in which, once again, ingenuity and greed combined to make massive fortunes – for some. This time the trade generating wealth was in money itself. For some twenty-five years, spanning the final years of the twentieth century and the early years of the next, the bankers thought the free-market bonanza would never end.
AT NIGHT THE LIGHTS of the Canary Wharf towers twinkle like cartoon diamonds, reminding their low-rise neighbours in the East End that trading money is a round-the-clock business. But recently the illuminations have a gap-toothed look and blocks of black reveal missing tenants.
The landmark tower of the Wharf – at 774 feet, the tallest building in London – is the fifty-storey Canada House, designed by Cesar Pelli. Its warning beacon still flashes to warn planes flying in and out of the nearby City Airport, and its pencil-point roof still puffs out a cloud of steam, presumably the vaporised sweat of the remaining anxious bankers inside. Here, on the eighteenth floor, is the Financial Services Authority – charged, since 1997, with regulating the exponential growth in the trading of complex financial instruments, a task it undertook with such a light touch that the crisis unfolded on its doorstep before it had issued a single warning to luckless investors. Here, too, the 1,370 London employees of Bear Stearns worked until March 2008, when the investment bank was forced to acknowledge that its balance sheet included $29 billion of dodgy mortgages, most of them American. The inhabitants of the Wharf prayed that Bear Stearns was a one-off catastrophe, and the US Federal Reserve guaranteed the bad loans in order to persuade a bigger bank, JP Morgan, to take over the crippled investment bank. Ben Bernanke, the Federal Reserve chairman, acknowledged then that, without US government intervention, he feared ‘a chaotic unwinding'.
Even so, the unwinding was soon apparent. In September, a second major player in the Canary Wharf ghetto of adventurous bankers, Lehman Brothers, which occupied a million square feet of office space close by, also collapsed dramatically. Too small to survive alone but too big to save, it reported $613 billion of debt, incontrovertible evidence for most bankers that the financial weather could, from then, only get bitter. Lehman's four thousand London employees provided the iconic pictures of the beginning of the crisis as they spilled onto a former quayside of the old London West India Docks with their cardboard boxes of personal possessions: an iPod, trainers, maybe a farewell card. Observers predicted that by the end of 2009 the City and Canary Wharf would lose ten thousand more jobs. But no one has estimated the size of the cull of spinoff jobs, from high-paid consultants and lawyers to the minimum-wage workers who feed, clothe, transport and clean up after the bankers. The UK's finance sector employs a million people around Britain. All will feel uncertain about their future.
The unpayable debts that stalled the world's financial system may have been American, but London's Canary Wharf, named after a small unloading quay for bananas, was the laboratory of the arcane, still scarcely understood, financial instruments that have ravaged the global economy. With a daytime population of up to ninety thousand, the Wharf is the size of an average town. But it is a town like no other. It is not London's financial area: that is still the City of London, about three kilometres to the west. It has no town hall, no schools, no charity shops. Children are found mainly in the subterranean shopping malls beneath the high-rise office blocks, but generally only at weekends. No old people or mothers with prams require your help through the revolving doors or off the escalators. There is not even a traffic problem, since most of the inhabitants commute in and out by public transport. There is no litter. You will never see a cat, and dogs are more likely to be sniffer dogs, alert for drugs or bombs, than pets. There are no beggars. The few poor people you meet are cleaners and service staff, usually early in the morning or late at night waiting for the buses.
Just a few hundred yards north of the Wharf is the other East End, with an oversupply of the litter and dirt and annoyances of inner-city boroughs. But if proximity to great wealth over two decades has failed to benefit East Enders, that at least now has an upside. The troubles of Canary Wharf's bankers (who, if they live in the area, inhabit the serviced riverside blocks) are likely to have less effect in these down-at-heel streets than in richer parts of London. The very informality of the East End economy has bred a certain resilience and self-reliance. You will find few of the well-known High Street names in the shopping parades, few big supermarkets, no chain restaurants or coffee bars, no chain pharmacies. There are no big employers, either. Most businesses are small or family concerns, particularly in areas of recent immigration (half the population is from ethnic-minority groups). Outside the Wharf there are few mainstream banks. In the predominantly Muslim areas of Aldgate and Whitechapel, for instance, there are Indian, Bangladeshi and sharia-compliant banks. Even more remote from the big banks are hawala schemes, cheap, efficient trust-based networks for transferring money overseas by phone. The Somali population in East London is said to send millions of pounds in this way so that money can instantly reach families back home with no bank account.
The rest of London has tended to leave the East End to its own devices. But, for the nearly a quarter of a million East Enders in Tower Hamlets, all this may be about to change.
IN 2012, THE EAST END will have more visitors than residents: the Olympic Games will bring around half a million workers and visitors to Tower Hamlets and neighbouring Stratford. So far, the Games have found few friends among London's middle classes and media commentators. The latest price tag of £9 billion is seen as a calamitous addition to the national debt. But the closer you get to the Olympic Park (where the main stadium structures are well underway), the more enthusiasm you find. Thousands of jobs are being created – in construction, but also in cultural and other support services. An associated commercial centre is being built by Westfield. And by 2012 the East End will have a high-speed train link to Europe and better cross-London connections (initially to transport the athletes, spectators, and foreign great and good) than it has ever had.
Shortly after London's successful Olympic bid, I took a sceptical Will Hutton – a fellow journalist on The Observer, where I then worked – on a tour of the as-yet-undeveloped Olympic site, a mile from where I live. Hutton, an influential commentator, is the author of The State We're In (Jonathan Cape, 1995), a damning excoriation of the destructive greed encouraged by the Thatcher government. Like many Londoners, Hutton had argued that the billions it would take to develop an Olympic site could be better spent. But he also confessed to me that, like most middle-class North Londoners, he never had much reason to visit the East End.
I took him along disused canal towpaths through the metaphorical back door to the Lea Valley, an ugly ribbon of land that will soon be the Olympic Park. It had hardly seen a shilling of investment since the small factories and warehouses which once serviced the docks were bombed to blazes in World War II. Hutton saw a perspective that the many dignitaries who have visited since will not have seen and now never will. We went past dilapidated, unplanned and mostly deserted factories, under bridges where putrid water pooled, past scruffy storehouses and car repairers and paint shops. He was shocked that within sight of both the then-booming City of London and Canary Wharf an area of such neglect and ugliness could exist. In July 2006 he wrote in The Observer: ‘The smell of sewage in the fifty yards of canal path before you arrive at Old Ford locks – junction of the River Lea and the Hackney Cut on the River Lea Navigation – is overpowering. Don't breathe in too deeply; at this intensity, it's almost certainly toxic...Ahead there is the outfall sewer that conducts most of London's sewage to the treatment plant in Beckton. This is the shittiest part of London...Where I was walking is about two miles from the City of London, one of the richest urban areas in the world, yet here everything is poor. The tracts of derelict land crisscrossed by overhead power lines, disused canals and sewage drains; the lack of infrastructure; the low incomes; the disastrous health experience; low life expectancy – everything is a tribute to neglect.'
Many are sceptical about the transformative power of the 2012 Olympics. But the Games will necessarily generate immediate local wealth, some good-quality housing and longer-term employment. London's stalled economy will certainly get a kick-start, even if the doubters are right that insufficient attention has been paid to the post-Olympic legacy. Siting the Games in this neglected part of London was without doubt the correct decision, righting a great wrong. Britain will, for once, have put its money and energies into the stubbornly derelict and impoverished East End.