[Diggers350] Guardian: How Manchester sold itself to Abu Dhabi’s elite – for a song

[Tony Gosling]

How a great English city sold itself to Abu 
Dhabi’s elite – and not even for a good price

https://tlio.org.uk/how-manchester-sold-itself-to-abu-dhabis-elite-for-a-song/

Manchester’s Labour council let Sheikh Mansour 
buy up acres of public land for seemingly a 
fraction of its worth – how was this allowed?

Emacs!


<https://www.theguardian.com/commentisfree/2022/jul/21/great-english-city-sold-abu-dhabis-elite-manchester>Aditya 
Chakrabortty - The Guardian - Thu 21 Jul 2022

London is one giant pantomime this summer. Just 
look to the politicians and journalists, 
hot-breathed with excitement, horse-trading and 
haggling over who gets to be the Tories’ next 
head prefect. But if you want the truth about how 
power and money operate in the UK today then 
ditch Rishi Sunak and Liz Truss, and head to 
Manchester. Yes, Manchester: the comeback city 
that traded cotton mills for skyscrapers, and is 
now cheered by the Financial Times and George 
Osborne. The metropolis that taught the world so 
much about industrial capitalism 200 years ago 
now offers another harsh lesson about its 21st-century, financialised version.

Go a few minutes east of the city centre, and 
walk from New Islington into Ancoats. Block 
follows block of newly built and freshly 
converted flats and houses, many lining a lovely 
marina that glistens in the July sun. You can 
rent or buy these places right now, as long as 
you don’t mind how much some look like 
pile-em-high student boxes and that they all cost 
a packet. This is what post-industrial 
regeneration looks like, right? Redbrick in tooth 
and claw. But note something: almost 1,500 of 
these homes come from just one developer, and in 
that lies an entire sobering story.

Launched in 2014, Manchester Life was hailed as a 
“£1bn deal” between the city council and the Abu 
Dhabi-based owner of Manchester City football 
club. The local authority had swaths of 
brownfield and Sheikh Mansour, the club’s owner, 
ranked among the richest men on the planet. 
Working together, the result would be homes for 
people who desperately needed them and pots of 
cash. The council’s then leader, Richard Leese, 
promised “a world-class exemplar of regeneration”.

Meanwhile, human rights groups warned Manchester 
council about its powerful new business partner. 
The Abu Dhabi United Group investment fund is 
formally separate from the kingdom, but its 
owner, Sheikh Mansour, is the deputy prime 
minister of the United Arab Emirates and brother 
of Abu Dhabi’s ruling crown prince. In April, 
journalists at Der Spiegel magazine published 
documents suggesting that the state of Abu Dhabi 
had facilitated payments to Manchester City. At 
the very least, the investment fund is closely 
linked to what Amnesty International has 
described as “one of the most brutal police 
states in the Middle East”. To dissent in the UAE 
is to rot in jail, in a regime with 
proportionately more political prisoners than 
anywhere else in the world. Low-paid migrant 
nannies or builders are, Human Rights Watch says, 
“forced labour”. Yet such facts did not deter the 
council’s Labour leadership from going ahead.

It was a huge advance for Sheikh Mansour who had, 
only half a decade earlier in 2008, bought a 
struggling football club. Now his investment fund 
was entering a joint venture with the British 
state (albeit at local level), getting its hands 
on prime real estate and shaping the city’s very 
geography. Those of Vladimir Putin’s oligarchs 
who trousered chunks of London could never dream of such a glittering prize.

As one of the rulers of an autocratic kingdom 
that has an appalling reputation for repression 
and an addiction to oil revenues, Sheikh Mansour 
stood to gain so much from this partnership. It 
was the council that held almost all the cards: 
the hectares of publicly owned land, the planning 
regime, the public subsidies. Yet somehow, 
according to new research shared exclusively 
today with the Guardian and authored by academics 
at Sheffield University, it was Sheikh Mansour 
who pocketed almost all the winnings. The report 
says that nine sites were sold to the sheikh at a 
fraction of their value, and well below what 
other plots nearby fetched (the council says it 
used independent experts using standard 
valuations, although it won’t give any more 
details). They were on leases lasting 999 years, 
well beyond the norm. And the fund shifted what 
had been public assets to companies registered in Jersey.

That walk along the water from New Islington into 
Ancoats now passes blocks of privatised land 
owned in an offshore tax haven, which yields 
millions upon millions for a key member of the 
wealthy elite running a surveillance state 
halfway across the globe. One of the greatest 
cities in the world has sold itself to a senior 
figure in a brutal autocracy – and not even for a good price.

This is the devastating implication in the first 
thorough study of the Manchester Life scheme, 
which is a product of months poring over company 
accounts and planning applications. The city 
council is sometimes keener to criticise its 
critics than to hear what they have to say: 
Leese, its leader for 25 years until 2021, once 
responded to those calling for more affordable 
housing as “middle class tosspots and I hate 
them”. So let us knock on the head any personal 
attacks: the experts have all lived in the city 
for decades, I am one of the independent and 
unpaid advisers on the advisory panel, and this 
is a report issued squarely in the public interest.

Among a political establishment still scratching 
its head over how to level up, Manchester is 
celebrated as a pioneer. Its Labour leadership 
has been praised by Conservative administrations, 
while Osborne called its chief executive, Sir 
Howard Bernstein, “the star of British local government”.

Bernstein ran the council for nearly two decades 
until 2017, and sat on the board of Manchester 
Life. Yet its success has come at a high price 
for the little people who just happen to live in 
the city. Not only have the assets they owned 
been sold cheap, they have got little back. The 
nine developed sites have no social or affordable 
housing, which the council’s planning officers 
justified with statements such as: “There is 
already a high level of affordable housing in the 
immediate area.” The same council admitted 
earlier this year that nearly 4,000 of the city’s 
children sleep each night in temporary accommodation.

At the Manchester Life developments, a two-bed 
flat is considered a bargain if it goes for 
£369,000 – a price that puts it off limits to 
couples working full-time on an average salary. 
As for tax, the sums paid to the Exchequer seem 
risible. One of its main subsidiaries earned more 
than £26m in the five years to 2021, but, the 
researchers found, paid less than £10,000 in tax 
– an effective rate of just 4p on each £100 of 
revenue. Manchester Life told me that its 
subsidiaries “pay all UK corporation or income 
tax due on rental income and profits”. It would 
not, however, disclose how much tax it pays or on how much revenue.

It is right to say that New Islington and Ancoats 
are vastly more pleasant areas than they were 
even five years ago – but the big question is who 
has won from redevelopment and who has lost. 
Putting hard numbers on that is tricky when so 
much of the information about Manchester Life – a 
venture using public assets and public subsidy 
with a public authority – is kept strictly private.

I asked the report’s authors to calculate how 
much the council could have earned from this 
deal. Looking at examples of other land deals and 
other local councils, their conservative estimate 
is £33m, plus up to £1.7m a year in rent. Both 
the council and the joint venture described that 
sum as “speculative”. The council also said it 
expected more money to come through an overage or 
profit-share arrangement, although it did not 
provide any details of this agreement nor are 
they on public record. But for comparison, that 
£33m would more than cover what the city pays in 
a year to put up families in temporary housing.

Sheikh Mansour will presumably know exactly how 
much Manchester Life is netting him – and can 
look forward to 10 centuries of rental income 
from the land in this great city. He seems 
content with the arrangement. A few months after 
Bernstein retired from the council, he was 
appointed as the senior strategic adviser for 
City Football Group, owned by Sheikh Mansour. I 
asked the council what procedures it followed on 
Bernstein’s subsequent appointment with such an 
important business partner. It could not tell me.

Perhaps the nicest of the Manchester Life 
developments is Murrays’ Mill, a conversion of 
one of the world’s first steam-powered cotton 
mills into flats. It stands in the heart of 
Ancoats, alongside Bengal Street. My family is 
originally from Bengal, a region that once wove 
the best textiles in the world, muslins so fine 
that the French sighed over their perfection. It 
was the East India Company’s entry point into the riches of south Asia.

To look at such names carved on to brick is to 
remember how Manchester came to its industrial 
wealth and Britain to global pre-eminence, from 
cotton picked by enslaved people and through 
destroying foreign industrial competition, even 
criminalising the sale of Indian textiles. But 
today it symbolises something else: a country 
celebrating its receipt of capital from other 
states under the shabbiest of terms as a triumph. 
The difference is that Indians were under no 
illusions about what had befallen them.
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