Bunhill: Out of Hackney

THE London borough of Hackney has not always been the happiest of places.

It was once dubbed the poorest borough in Europe, thanks to dire unemployment, crime, drug abuse and educational standards.

Just before Christmas, when Brussels was for the first time doling out grants for the South of England, it was Hackney that headed the queue of economic black spots.

But the borough has its compensations. It is central. Its publicans have an admirably flexible attitude to the 11pm closing rule. Its housing is cheap. And it has one of the best theatres in London - the Empire.

Moreover, for all its financial disadvantages, the borough has been able to boast that it is home to the biggest, best and wealthiest investment bank in Britain. By a geographical quirk, S G Warburg's headquarters in the City's Broadgate development are located in Hackney.

Alas, not for much longer. I hear the Boundaries Commissioners are shifting the frontier in April, so that the whole of the Broadgate will fall into the City of London local authority. 'We're very unhappy,' says a Hackney spokeswoman. 'We fought to keep it, but we think there was pressure from certain financial institutions.'

The boundary change has few direct financial consequences. Business rate payments are pooled nationally and allocated according to borough population, not the location of the ratepayers. But the disappearance of Warburg could dent the borough's finances if the rules were changed again.

And the pinstripers' loyalty to the borough - in the form of lobbying effort, financial advice and contributions to a local small business development fund - must come into question.

There is one ray of hope. Warburg is a member of the Per Cent Club, the group whose members donate at least 0.5 per cent of pre-tax profits to good causes.

After last year's gargantuan profits rise, the bank will have to go on a giant philanthropic spree if it is to remain a member.