In London, land and property have become more lucrative than diamond dealing
tony at cultureshop.org.uk
Sat Jul 13 14:06:29 BST 2019
Land and property is becoming more lucrative than diamonds in London,
Posted on 12 July 2019
The landowning establishment
Land privatisation, the largest neoliberal grab
in Britain since Margaret Thatcher came to office
in 1979, has scarcely been debated. Also shrouded
in secrecy is who actually owns a lot of it. Now
two new books, reviewed here by PAUL KERSHAW, and
recent Labour Party statements are helping to put
these important issues on the agenda.
* Who Owns England? How we lost our green &
pleasant land & how to take it back, by Guy
Shrubsole; Published by William Collins, 2019, £20
* The New Enclosure: the appropriation of
public land in neoliberal Britain, by Brett
Christophers; Published by Verso, 2018, £20
Over the last 40 years a startling 10% of
Britain's land mass has been sold off by the
state. In his book, The New Enclosure, Brett
Christophers estimates conservatively that this
amounts to a £400 billion privatisation.
That dwarfs the other big privatisations, such as
housing, railways or utilities, and represents
more than twelve times the value of the Royal
Bank of Scotland. The sale of land continues and,
Christophers suggests, may be speeding up.
All types of public land have been targeted,
including that held by local and central
government. While disposals have generally been
more rapid under Tory and Tory-led
administrations, they are not the only ones at it.
NHS land, for example, was a particular target
under New Labour as a result of the pressure of
the 'internal market' on health trusts.
The NHS 'estate', estimated at around 50,000
hectares in 1982, has shrunk by over 70% to 6,500
hectares today. Some health trusts have to buy
back land on the open market in order to build new hospitals.
In another new book, Who Owns England?, Guy
Shrubsole investigates what he describes as
England's darkest secret, using computer mapping,
dogged investigation and the occasional helpful leak.
It is amazingly difficult to identify landowners
in England and, he writes, "there's a reason for
that: concealing wealth is part and parcel of preserving it".
Shrubsole says that most people have little idea
how unequal land ownership is, but just 5% of
England's land is owned by ordinary householders.
Meanwhile, "a few thousand dukes, baronets and
country squires own far more land than all of middle England put together".
No doubt for similar reasons, public bodies have
been very poor at recording what land they have disposed of.
In 2016, the Tories attempted to privatise the
Land Registry, the public body responsible for
keeping a database of land and property in England and Wales.
If carried through this would have made
information even more difficult to access. The
PCS union fought a strong campaign against the
plan and groups representing capital also
expressed concern that the registry's role could be undermined.
The proposals were dropped. Incredibly, not even
the police are allowed to access its records
without the owner's permission, clearly hindering
investigations into corruption and money laundering.
The rich and powerful
Painstaking research reveals that half of England
is owned by less than 1% of its population.
Shrubsole estimates that aristocrats and gentry
still own around 30% of the land.
This could well be an underestimate as the owners
of 17% of England and Wales remain undeclared at
the Land Registry. These are most likely to be
aristocrats as many of their estates have
remained in their families for centuries.
They have not been sold on the open market so
their ownership does not need to be registered.
There is no mandatory and centralised
registration of title as there is in some capitalist countries.
An estimated 18% of England is owned by
corporations, some based overseas or in offshore jurisdictions for tax reasons.
Shrubsole's book is full of anecdotes revealing
how he became obsessed with this issue. He
describes how, as a ten-year-old in 1996 growing
up in Newbury, eco-warrior protests at the
building of the town's bypass became national news.
He joined a march over threatened land with his
parents. They kept some beehives in the woodland
of the vast Sutton estate through which the
bypass would run; the landlord failed to put up a fight to protect it.
He saw how the bee population was threatened, not
only by motorways but also by the pesticides
produced at the local Bayer plant. He came to
reject the idea that ancient barons were reliable
custodians of the countryside.
His later research revealed that 44% of west
Berkshire (the county in which Newbury is
located) is owned by just 30 individuals and organisations.
The biggest single west Berkshire landowner is
Tory MP Richard Beynon, the inheritor of the
12,000-acre Englefield estate, in his family since the 18th century.
His fortune is estimated at £110 million, part of
which comes from the 19th century development of
De Beauvoir Town in Hackney, east London.
In 2014, his company attracted publicity when it
bought a share in the New Era estate in Hoxton
and tried to jack up the social level rents with
the potential to make current tenants homeless.
A big campaign involving local residents, trade
unions, the Socialist Party and comedian Russell
Brand pushed back these proposals, but age-old
privilege and power relations were laid bare.
Shrubsole visits a site in Surrey that Gerrard
Winstanley, the radical leader of the Diggers and
advocate of land reform during the English
revolution, sought to claim as common land in the
1640s. It is now the site of very private executive homes.
He researches the secretive web of The Peel
Group, involved in infrastructure, transport and
real estate, tracing how it influences urban
planning and development decisions for profit.
For example, Peel acquired the Manchester Ship
Canal when it was privatised in 1987. In 2008, it
emerged as the dominant force behind a business
grouping that successfully lobbied against the
proposal for a Greater Manchester congestion charge.
As owners of the out-of-town Trafford Centre it
feared the charge would lose it customers who had to drive through the city.
In that case there was a public vote. Most of the
time, The Peel Group exerts influence with far less visibility.
We get vivid insights into the lives of the
super-rich and their property. Shrubsole visits
41 Grosvenor Street in Mayfair, a dusty, empty
mansion bought for a staggering £28.5 million in
2007 by Timur Kulibayev, son-in-law of the then president of Kazakhstan.
Council figures show that 60,000 homes around the
country have stood empty for over two years.
He estimates that Kensington and Chelsea, the
borough where the Grenfell Tower disaster took
place in June 2017 leaving 72 dead and hundreds
homeless, had over 1,500 empty homes in that year.
Many are rumoured to be on the Cadogan estate,
dubbed the 'ghost town of the super-rich'. With
an estimated wealth of £6.5 billion, Lord
Cadogan's ludicrous family motto is, 'He who envies is the lesser man'.
The GMB union calculated that, in 2014 alone, the
estate received £116,000 in housing benefit from less well-off tenants.
The pattern of land ownership in Britain was not
established peacefully. The Norman conquest of
1066 established the system of property rights recorded in the Doomsday Book.
The dissolution of the monasteries 1536-41
resulted in land being parcelled out to favourites of Henry VIII.
The brutal, enforced enclosures of the 18th and
19th centuries took vital land rights from the
rural poor to the benefit of landowners, forcing
millions of people into the cities where they had
to sell their labour, laying the basis for the rise of industrial capitalism.
Not for nothing did Karl Marx speak of capitalism
arising "dripping from head to toe, from every
pore, with blood and dirt". The dynasties
established through these processes still dominate land ownership in Britain.
Enclosure was justified with talk of 'waste land'
to describe commons. Christophers points out that
comparable language of 'surplus land' is used today when defending sell-offs.
Moreover, there has been no serious assessment by
official bodies of the effects of the sell-off.
In truth, if we saw primitive accumulation by
theft during the rise of capitalism, we are now
seeing accumulation by dispossession.
Of course, once the land is sold it will only be
used to meet community needs if a profit can be made.
The claim that selling land increases the supply
of affordable housing is not borne out by
evidence. Christophers writes: "The private
sector does not lack land; and nor, more
significantly, does it lack land that is suitable
for commercial development, or for which planning
permission has been granted"..
He argues that this 'new enclosure' has been
accompanied by the emergence of a new form of 'financialised' land ownership.
Rather than being regarded, primarily, as a
source of income from rent, for productive
activities or the provision of housing,
institutions such as banks, insurance companies
and pension funds come to regard land mainly as a financial asset.
It is seen as collateral, or is bought and sold
for speculative gain. For example, its value can
rise massively if planning permission is granted.
Ideas about land ownership have changed over the
years, as Christophers' more theoretical book outlines.
He quotes Edward Stanley, the 15th Earl of Derby,
speaking in 1881 as one of Britain's largest
landowners: "The object which men aim at when
they become possessed of land in the British
Isles may, I think, be enumerated as follows.
"One, political influence; two, social importance
founded on territorial possession, the most
visible and unmistakable form of wealth; three,
power exercised over tenancy; the pleasure of
managing, directing and improving the estate
itself; four, residential enjoyment, including
what is called sport; five, the money return - the rent".
In the authentic voice of privilege, here is a
succinct summary of why land ownership matters.
Christophers cites Marx, who explained that in
19th century England landed property had 'cast
off' its feudal character and was aiming to make
as much money as possible through rent.
Rent is not an abstract price, however. Contrary
to the picture in economics textbooks, it
reflects class struggle and power relations.
As Christophers puts it, rent is a "worldly,
messy, negotiated outcome". He quotes Marx: "The
rent of land is established as a result of the
struggle between tenant and landlord". (Economic
and Philosophic Manuscripts of 1844)
Economic ideas have shifted with the changing
class forces. The classical economists of the
19th century took a much more critical position,
reflecting the conflict between the rising
capitalist class and landowners at the time.
Adam Smith, David Ricardo and others saw
landlords as essentially parasitical. Rent creams
off a share of surplus value from industrial
capital, so the antipathy to landlordism was no mystery.
Marx advanced two reasons for the toleration of
landlordism by capital: the fear that an attack
on landed property would cast doubt on the
sanctity of private property generally (ie the
private ownership of the means of production);
and the extent to which the capitalists become
landowners, abolishing the distinction.
Nonetheless, the demand for land nationalisation
expressed the fullest development of capitalism in its more dynamic phase.
Christophers quotes Lenin's criticism of the 19th
century Narodniks to underline the point: "The
Narodnik thinks that repudiation of private
property is repudiation of capitalism.
"That is wrong. The repudiation of private land
ownership expresses the demands for the purest capitalist development.
"And we have to revive in the minds of Marxists
the 'forgotten words' of Marx, who criticised
private ownership from the point of view of the
conditions of capitalist economy". (The Agrarian
Programme of Social-Democracy in the First Russian Revolution 1905-1907)
Land nationalisation has come be seen as an
'almost inconceivable' and radical idea but this was not always so.
Unfortunately, although Christophers and
Shrubsole record this, neither puts a case to put it back on the agenda.
Even in the early 20th century some capitalist
representatives continued to rail against the iniquities of landlordism:
"Roads are made, streets are made, services are
improved, electric light turns night into day,
water is brought from reservoirs a hundred miles
off in the mountains - and all the while the landlord sits still.
"Every one of those improvements is affected by
the labour and cost of other people and the
taxpayers. To not one of those improvements does
the land monopolist contribute, and yet by every
one of them the value of his land is enhanced.
"He renders no service to the community, he
contributes nothing to the general welfare, he
contributes nothing to the process from which his own enrichment is derived".
This reads like an analysis of the gains to
landowners from modern regeneration schemes. It
is, in fact, from Winston Churchill in 1909, at
the time of the Liberal 'people's budget', quoted by Christophers.
Given the interlinking of finance, big capital
and landownership it is no surprise that
denunciations of landlordism have become rare in capitalist circles.
This reflects the rottenness of contemporary
capitalism. However, the inflation of land values
and the impact of the housing crisis have forced
some capitalist commentators to raise the issue again.
Writing in 2010, Martin Wolf, chief economic
commentator of the Financial Times, wrote that
the value of his London house had risen ten times
since he had bought it in 1984: "All of that vast
increment is the fruit of no efforts of mine. It
is the reward of owning a location that the efforts of others made available".
Big-business land banks
Brett Christophers and Guy Shrubsole argue that
Britain's acute housing crisis is fundamentally a land crisis.
The real cost of a house is not just the bricks
and mortar, but the land it stands on, and land
prices have rocketed up by 400% since 1995.
Taking a longer view, Christophers says land
accounted for just 2% of the price of residential
property in the 1930s, while now it is closer to
70%. The extent of asset-price inflation is breathtaking.
Recent changes to the way the Office for National
Statistics presents figures reveal the staggering
fact that land now accounts for over half of UK net worth (over £5 trillion).
Buildings on land were valued at £3.5 trillion,
roughly equally divided between residential and non-residential property.
All other forms of wealth total just £1.26
trillion or 13% of the total. Christophers
observes: "Aside from land and property... there
really is not much else of any monetary value in
the contemporary United Kingdom, which is a somewhat sobering thought".
'Free-market' politicians blame the planning
system for delays in housebuilding, but this does
not explain the huge land banks with planning
permission held by so-called developers.
A report by Grant Thornton UK LLP in May
confirmed that, in 2015, 57,496 homes were given
planning permission, but three years later - when
the permission typically runs out - only 30,819
were under construction or completed.
That means that 46% of potential homes with
planning permission are not getting built.
The Legal and General financial services group,
entirely legally, holds what it calls a
"strategic land portfolio... stretching from
Luton to Cardiff and comprising 3,550 acres".
Its rationale is simple: "Strategic land holdings
are underpinned by their existing use value",
such as farming, "and give us the opportunity to
create further value through planning promotion
and infrastructure works over the medium to long term".
Shrubsole points out it is nearly all in green
belt areas, bought with the aim of lobbying to get the restrictions ripped up.
He also doubts there is a special dastardly class
of speculator: "Rather, the practice of hoarding
land awaiting a higher return is something that all landowners do".
The massive sell-off of publicly-owned land is
another key factor inhibiting councils from building cheap housing.
A survey of councils by the Royal Town Planning
Institute found it was the highest-rated reason for not building.
Yet, Christophers points out that commentators
did not pick up on the contradiction, in the same
2017 conference speech, between Theresa May's
promise of 'a new generation of council houses'
and her pledge to ensure that councils release more land to the private sector.
Council-owned farms, which were a way into
farming for people without inheritance, have been
part of the land sell-off. Moreover, subsidies
have been skewed in recent years to support big
landowners - agribusiness benefits, small farmers suffer.
From 2003, subsidies have been paid on a farm
area basis, so the more you own the more you get.
Seventeen dukes received £8 million in 2015 and,
in the following year, 14 marquises were handed £3.5 million from the taxpayer.
That is a key reason for the rise in the value of
agricultural land in recent years - a further taxpayer boost for aristocrats.
It is completely inadequate to hope, however, as
Shrubsole does, that they will somehow play a role of 'active stewardship'.
He calls for a reformed system of subsidies to
provide a spur but then, presumably recognising
that this is not enough, says that "it will
require the aristocracy's active participation.
Will they rise to such a challenge?"
The Labour Party recently published a report,
Land for the Many. One of the authors was Guy
Shrubsole and it raises some radical policy demands.
The housing charity Shelter has also issued a
report calling for land reform. Labour is
considering a halt to land privatisation, tax
changes, greater transparency, a community
participation agency and a community right-to-buy
scheme based on the Scottish model.
In addition, there has been talk of capital
controls and setting a target for the Bank of England to restrain house prices.
Capitalist economist Kate Barker warned: "A house
price target is a difficult one for government.
It is totally absurd for the Bank of England
unless given control of a whole other range of policies".
This points to the danger of a limited programme.
Rather than giving yet more power to the Bank of
England - made 'independent' as one of the
earliest acts of Tony Blair's first government,
to the delight of big business - all the main
banks and financial institutions should be
nationalised and made accountable to the aims of
a Jeremy Corbyn-led government. So should the
huge private estates owned by a tiny number of giant landlords.
These books are part of a revival of radical,
class-based ideas, and a decline in those
associated with New Labour and neoliberalism.
They are thought-provoking and offer many
important facts and figures. They can play a part
in the debate and, no doubt, will arouse justified anger.
While they reflect this process of searching and
testing out left-wing ideas, however, they remain
programmatically limited, even by comparison to
earlier Labour policy, let alone a socialist
programme needed to end the rule of capital.
Land has not become any less salient for the
socialist transformation of society than it was
in 1847 when Karl Marx and Friedrich Engels put
land nationalisation at the top of the demands in the Communist Manifesto.
Even the Labour manifesto of 1945 stipulated that
the party believed "in land nationalisation and will work towards it".
The depth of the crisis of British and world
capitalism will help put it back on the agenda.
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