TfL Business Tenants

Questions to the Mayor of London – answered on 10th February 2022.

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Photo of Emma Best Emma Best Conservative

How are you supporting business tenants of TfL/London Underground to ensure a mutually sustainable recovery?

Photo of Sadiq Khan Sadiq Khan Mayor of London

Can I thank the Member for her question. She has the privilege of asking the first question in the new City Hall. Congratulations. I am proud of Transport for London’s (TfL) commitment to helping the hundreds of businesses on its estate, 93% of which are small and medium-sized businesses, to recover from the pandemic. From the very start of the pandemic in 2020, TfL was the first major landlord in the United Kingdom (UK) to commit to full rent relief for the first three months. TfL has continued to provide significant support to its tenants, many of whom have worked tirelessly to continue trading through these challenging times.

Throughout this time, TfL has worked with groups like Guardians of the Arches, and it is lovely to see them in the gallery today, and the Federation of Small Businesses, which have provided invaluable advice on TfL’s approaches, as well as providing guidance for tenants. Throughout the last 22 months, TfL has supported business tenants in a variety of ways, including full rent relief, awarding direct rent credits, providing more time to pay down pre-existing arrears, giving support in managing rates claims, and allowing tenants to move from quarterly to monthly rent payments to allow for easier budgeting. TfL has also provided free access to storage space to support social distancing when this has been required.

In addition, TfL has not increased rent levels for small and medium-sized businesses even where rent reviews have been due. TfL has also supported full flexibility for its tenants based on their needs. For some tenants, this has meant setting rents based on turnover, whilst in other cases TfL has allowed for a percentage of the usual rent to be paid. For those tenants wanting to leave their properties, TfL has provided a simple exit process. TfL has also been meeting tenants and completing business health checks so that they can provide targeted support that addresses individual businesses’ needs.

Based on feedback, TfL has put in place new policies and is continuing to evolve how it operates as a landlord, with the aim of continuing to work in partnership with its tenants to drive long-term mutual value while supporting London’s recovery from the pandemic. TfL is proud of its predominantly small and medium-sized tenant base, which reflects the diversity of London.

Ultimately, however, getting London moving again will be the best way to properly support the recovery of these businesses and of businesses across the capital. When London moves, customers pour through our stations and stop to take advantage of local shops, cafés, and businesses. Restoring this flow of people will be crucial to the long-term health of both TfL’s tenants, and the wider London and UK economy.

Photo of Andrew Boff Andrew Boff Conservative

Assembly Member Best.

Photo of Emma Best Emma Best Conservative

Thank you, Mr Mayor. Firstly, I would like to thank all the businesses for coming out today. I have had the pleasure over the last month or so of meeting so many. I just know there is no way I can possibly do justice to the pain that they are feeling and the stress that they, their families, and staff, are under. Therefore, I feel a great weight trying to get that across to you today. We are not talking about the Jeff Bezos’ of this world. These are regular Londoners and people who have built something really phenomenal from the ground up. So many of them risk losing that or have lost that already. I understand all the measures you have laid out there, Mr Mayor, but you must recognise these have been inconsistent, especially across the London Underground. They have not received that level of support and they are on the brink. We have people who are relying on foodbanks for the first time in their lives who just do not see a way forward, and they need more.

Therefore, I have three asks today, Mr Mayor.  The first is could you please apply a singular strategic line management model, so you have the Arches tenants and management team, over the whole of TfL?  Can we have one consistent approach so that everyone can have access to that support that they so desperately need?

Photo of Sadiq Khan Sadiq Khan Mayor of London

Sorry, there were three asks?

Photo of Emma Best Emma Best Conservative

I am going to take them one by one.

Photo of Sadiq Khan Sadiq Khan Mayor of London

Can I thank the Guardians of the Arches for being here. I have friends and family who have businesses in arches, and I have seen the difference in the way TfL has treated our tenants versus others. I would rather be a TfL tenant than a tenant of a different landlord in arches. The Guardians of the Arches meet TfL regularly in addition to Deputy Mayors who work for me. I have met with the leadership of Guardians of the Arches as well. We are moving towards one line management approach, but it is not going to be a one response approach because we are going to make sure we help different tenants with different needs. For example, with a tenant who has a particular cashflow we give different help to somebody with a different cashflow.

One of the things we are trying to do is to make sure there is one person they can approach. They are confusing matters when they are approaching different people. If you are a small business with one person ‑‑

Photo of Andrew Boff Andrew Boff Conservative

Excuse me, Mr Mayor. Can I remind the public gallery that they are here to listen, and I am sorry that I have had to say this but if you could listen to what the Mayor is saying and not try to interrupt him. Thank you.

Photo of Sadiq Khan Sadiq Khan Mayor of London

What we are trying to have is a one-stop shop but for there to be flexibility, therefore different tenants get different help depending on their needs.

Photo of Emma Best Emma Best Conservative

I appreciate the commitment to a one-stop shop and a one-stop model and we will see how that plays out. However, what is key is the consistency in that. The second ask, Mr Mayor, is if you will meet with these tenants personally to hear first-hand the compelling stories they have of where this is going wrong. I think, once you hear that first-hand, there is no way that you will not see the pain and the inconsistency, and where perhaps TfL has big aims but on the ground that is just not happening. Will you meet with them?

Photo of Sadiq Khan Sadiq Khan Mayor of London

One of the things that people like you have to be honest about is the pressure on TfL from your Government. Your Government is saying that TfL has to raise more revenues and should be making those revenues from these hardworking tenants. Therefore, we need your help to say to the Government, “Stop bashing TfL and encouraging us to bash those tenants.” What the Government is saying is TfL must raise more revenues from hardworking families like these tenants here. Therefore, what we need is for your help to lobby the Government and say, “Stop.”

Photo of Emma Best Emma Best Conservative

Mr Mayor, I would like you to meet --

Photo of Sadiq Khan Sadiq Khan Mayor of London

You asked the question.

Photo of Emma Best Emma Best Conservative

That is not the answer to the question. The question is, will you meet with tenants.

Photo of Sadiq Khan Sadiq Khan Mayor of London

It may not be the answer you like --

Photo of Emma Best Emma Best Conservative

You can say whatever you want, and you can say to them whatever you want, you can say it is the Government’s fault. I will come with you on that call and if there is something we need to ask the Government for I will do that and I will join you.

Photo of Sadiq Khan Sadiq Khan Mayor of London

You have said that before.

Photo of Emma Best Emma Best Conservative

When have you ever emailed me? When have you ever asked me to do anything?

Photo of Sadiq Khan Sadiq Khan Mayor of London

Chair, I find it astonishing that this Member does not know the financial challenges TfL faces and has not heard me at previous Mayor’s Question --

Photo of Emma Best Emma Best Conservative

It is about the tenants and I am asking you if you will meet with them. I will meet with them as well and you can say whatever you like in that meeting. The question is not that right now. The question is will you meet with the tenants?

Photo of Sadiq Khan Sadiq Khan Mayor of London

I find it astonishing, Chair, that the Member is not aware of the pressures being put on TfL, which is leading to --

Photo of Andrew Boff Andrew Boff Conservative

I would appreciate, Mr Mayor, if you would like to answer the question.

Photo of Sadiq Khan Sadiq Khan Mayor of London

-- the challenges that we see TfL facing. TfL as a landlord is required by the Government to increase revenues, 72% comes from fares, which have shrunk, and therefore they are asking us to raise revenues elsewhere. One of the things that I do know, not only have I met Guardians of the Arches in the past, not only did TfL meet them regularly, but two of my Deputy Mayors have met with them as well. I am always happy for Deputy Mayors, who can see members of the public sooner than I can, to meet with the Guardians of the Arches. Of course, I am more than happy to meet representatives from the business community across London, I meet them regularly, including the Federation of Small Businesses. I will be honest with them in relation to the challenges that TfL faces because of pressure from the Government. I am not going to hide from telling Londoners the truth about the pressures this Government is placing on small businesses like the ones behind you.

Photo of Emma Best Emma Best Conservative

Therefore, I can contact your diary assistant after this meeting and set up a meeting?

Photo of Sadiq Khan Sadiq Khan Mayor of London

Chair, I have answered the question. In relation to --

Photo of Emma Best Emma Best Conservative

That is my question.

Photo of Sadiq Khan Sadiq Khan Mayor of London

It is quite clear they do not like the fact that I am illustrating some of the consequences of their Government’s action on TfL. I am afraid you are going to have more and more tenants across our city, not just those in our arches, but those across our city, suffering the consequences if TfL has a managed decline scenario. That is one of the reasons why we will continue to lobby the Government for more funding for TfL.

Photo of Emma Best Emma Best Conservative

I think that is really sad, I am not trying to play politics, and if we need to solve these issues together, people are going through real issues and all I wanted to ask was for a meeting that we could discuss these together and be honest with the tenants and have a deeper conversation. My final ask is if you will commit that there will be no evictions in March from TfL premises.

Photo of Sadiq Khan Sadiq Khan Mayor of London

TfL has worked really hard to ensure there are no evictions, unless tenants want to leave. There are 2,500 tenants. One of the reasons why your first ask for a one-size approach is not sensible is because different tenants have different needs. I have set out some of the things that we are doing. TfL will not evict a tenant who has a viable business and who wants to stay. What they will do is come up with a system that works for that tenant. That is why the first ask you had of a one-size approach does not work. Some tenants have been given rent credits. That has cost TfL £37 million, which your Government is saying we have to pay to the Government. £37 million we have given to businesses in rent credits and your Government is saying that we should not do so. The monthly rents we have gone to, rather than quarterly, to help the cashflow is also something that your Government is not amenable to. Therefore, we are going to need your help in relation to putting pressure on the Government to stop making it difficult for us to be a good landlord. I am more than happy to compare and contrast TfL’s landlordship of these businesses versus others in our city, including Network Rail.

Photo of Emma Best Emma Best Conservative

Thank you, Mr Mayor. That was a commitment that there will not be any evictions?

Photo of Sadiq Khan Sadiq Khan Mayor of London

I will be clear, where a tenant wants to leave, we will make sure there is a good exit package for the tenant to leave. The other commitment we can give is no increase in rent levels where reviews have been made for small and medium-sized businesses. We are also going to allow more time for tenants to pay down pre-existing arrears. We are also committed to give more support in relation to managing rate claims as well. If there are other things that other landlords are doing that we can be doing as well, I am sure TfL will be more than happy to listen to those suggestions.

Photo of Emma Best Emma Best Conservative

Thank you, Mr Mayor. We can see that people’s lives are on the line and I would hope that we can do everything we can. I did not suggest we have a one-size fits all approach. That will not happen. Rather one team providing consistent support because people have been through two years of pandemic and received nothing and they are hurting and that is it. Thank you.