All posts by Mark

Housing as a speculative financial asset: introducing REITS (Real Estate Investment Trusts)

MEET THE NEW LANDLORD – REITS: WHAT ARE THEY?
Real Estate Investment Trusts – a tool of asset accumulation as an escalation of the division of wealth and class separation in Britain and across the world:

REITs are trusts that buy commercial properties, such as apartments, office buildings, and shopping centres which produce income. When a person buys shares in a REIT, they become a part owner in all of the property holdings of the REIT. REITs are traded like stocks on the major stock exchanges, so they provide the liquidity of stocks with the diversification and income of commercial real estate. REITs first appeared in the US, after being approved by Congress in 1960 to offer small investors a chance to participate in the commercial real estate market. As of 2016, are were 224 REITs on the FTSE (London Stock-Exchange). The Internal Revenue Service shows that there are about 1,100 U.S. REITs that have filed tax returns in the USA, including more than 225 REITs in the U.S. registered with the Securities and Exchange Commission that trade on one of the major stock exchanges — the majority on the NYSE.

AGAINST REAL ESTATE INVESTMENT TRUSTS (REITs):
Throughout the world, Real Estate Investment Trust (REITs) are playing a rapidly increasing role in organising private financial investments in housing and cities. Real Estate Investments Trusts (REITs) are joint stock companies that primarily derive their income from real estate. They are free from corporate tax and they are legally forced to pay out high parts of their profits.

After a longer period of development in Northern America disastrous consequences on social housing are evident:

– Buying out of social, public and low-cost housing

– Rent increase and increase of heating costs, service charges etc.

– Demolishing of affordable complexes and replacement by more profitable buildings

– Disinvestments, neglect of/worse maintenance of the housing stock

– Pressure to leave on financially disfavoured tenants, replacements by wealthy residents

– the ending of social neighbourhoods programmes, participation process etc

– Construction on public spaces, privatization of public spaces

– Lobbying governments for weakening legal standards

– Exit to private funds

The large U.S. REIT AIMCO gave a shocking example how these investors

treat tenants.

* Video on forced evictions by AIMCO at Lincoln Place

Although negative consequences in the USA, Canada and elsewhere are obvious, the introduction of REITs in most of the countries took place without protests and even without critical debate. They just happened in the extra-democratic spaces where financial lobbyists make their deals with governments.

HOW DO REITS WORK?

Lots of small investors can take part by owning shares in the Trust which owns the buildings. This means they can buy or sell their shares in the trust easily whenever they like exposing homes to the volatility of speculative markets. No tax is paid by the Trust; tax is only paid by the shareholder, with their dividend income return added to their annual taxable income. If the shareholder is a charity (such as a housing association which has a charitable arm), the shareholder may be exempt from paying any tax at all.

‘In the United States and France, REITs have lead to higher rents and to asset stripping; where the most profitable housing has been enhanced at increased rents, whilst the rest has been left to decay or emptied for redevelopment or demolition.’ From London Tenants.org

There are several different types of REITs available on the market:

[1] Equity REITs own and operate income producing real estate, such as apartments, warehouses, office buildings, hotels, and shopping centres.

[2] Specialized REITs focus on a particular type of property, such as shopping centres or health care facilities.

[3] Geographically-focused REITs specialize in a single region or metropolitan area, while others try to acquire properties throughout the country. Mortgage REITs lend money to real estate owners and operators, and raise income from the interest payments on the mortgages.

4] Hybrid REITs own properties and provide loans to real estate owners.

FINANCIAL MARKETS: ASYLUM FOR CAPITAL

Taken from FROM CRISIS TO CRASH

Ref: www.beigewum.at
The financial markets prove to be an ideal place of refuge for anxious owners of capital. They are flexible and global. An IBM stock can be exchanged in a few moments for a Yen credit or a government bond. For big customers, the expenses are trifling. State incursions like taxes and restrictions tend to zero.

Profits were and are now gained from shares (dividend distributions based on business profits), national debts (compound interest financed by taxes), credits (interest payments from private or state debtors), organisation of firm takeovers or the purchase and sale of securities at the right moment. The latter is a very popular option since it requires the least waiting-time. Through deregulation and internationalisation, getting into and out of investments as fast as lightning is increasingly possible.

With this flexibility, pressure is exerted on everything that does not bow to the desires of investors. This structure is the central lever for the restructuring and realisation of better profit conditions for capital in general, not only the much reviled ‘speculators’.

Landworkers’ Alliance crowdfunder to lobby for small scale, traditional family farms & ecological farming for the UK’s post-brexit agricultural policy

The Landworkers’ Alliance launched a Crowdfunder, aiming to raise £25k to get their policies into a post-Brexit agricultural policy. The crowd funder has less than one more week to go in case anyone wants to make a donation to support the orientation towards a just and sustainable agricultural policy after Brexit.

Go to the crowdfunder page here: https://tinyurl.com/yanu8rpc to make a donation that will help the Landworkers’ Alliance defend small-scale family farms, and try to build a future where farmers and new entrants can make a decent livelihood producing good food.

Who are the Landworkers’ Alliance? The Landworkers’ Alliance is a grassroots union of farmers, growers and land-based workers from across the whole of the U.K. They are a member led organisation campaigning for the rights of small-scale producers and a better food system for everyone.

More farmers, Better Food The Landworkers’ Alliance launch crowdfunding campaign to change the future of agricultural policy and they need your support.
In Spring 2018 the government will outline a new UK post-Brexit farming policy. This is the most significant moment in generations for those who want to see a socially just and environmentally sustainable food system. The Landworkers’ Alliance are seeking to defend the needs of small-scale and ecological farmers against agri-business interests. They launched a nationwide funding campaign ‘More Farmers, Better Food’ on 23rd December 2017 to influence post-Brexit agricultural policy, aiming to raise £25k through public donations to support their work campaigning and lobbying for a policy that will guarantee a fair future for farmers in the UK.

The future of our food and farming depends on this policy; it is the most significant moment in generations – they need your support to reach the target and make sure the voices of small-scale and ecological farmers against agri-business interests are heard.

Why do we need to be part of shaping a post-Brexit Agriculture Policy? (with reference to multi-pronged list of objectives outlined by the Landworkers’ Alliance):

    • So that the voices of small-scale and ecological farmers are heard instead of only those of agri-business interests who usually assume the voice of the UK farming lobby (usually represented by the National Farmers’ Union and Country Land & Business Association – my insert)
    • In the 10 years following the implementation of the 2003 Common Agricultural Policy reform, 35,000 farms left the land in the UK; most of these were small-scale and family farms. The Landworkers’ Alliance assert that we need to ensure that British Agricultural policy will not repeat the same mistakes of previous agricultural reforms. On the contrary, reforming the CAP within the EU should have been focused upon one of the original tenets of the Treaty of Rome to “ensure the optimum utilisation of the factors of production, in particular, labour”. For a post-brexit UK outside the CAP as well as for countries remaining in the CAP, maximising the utilisation of agricultural labour should mean properly rewarding that labour – a skill set which in certain areas of agriculture such as the uplands is fast dying out. And yet, working in the food and farming sector is characterised by insecure, precarious and unpredictable labour conditions. 64% of farmers earn less than £10,000 a year, 8 supermarkets control almost 95% of the food retail market, and farmers receive less than 10% of the value of their produce sold in supermarkets. Meanwhile, there is hardly any support for new entrant farms or funding for farmers producing on less than 5 hectares (12 acres) of land.
    • The UK has one the highest levels of concentrated land ownership in the world, and the price of land has trebled in just over 10 years. In 2015, just 100 landowners received a combined total of £87.9m in agricultural subsidies, of which £61.2m came from the single payment scheme. This is more than the combined total paid to the bottom 55, 119 recipients in the single payment scheme over the same period.
    • The UK is the 6th largest economy in the world and yet in 2014, over 8.4 million people living in a UK household reported having insufficient food.

    The Landworkers’ Alliance have developed a range of policy proposals aimed at protecting small scale, traditional and family farms, creating more environmental farming systems without losing sight of production, and giving new entrants more support to set up and scale up.

    All of their policies and representation comes from their members who are farmers, growers and land-based workers who have direct experience of the issues they campaign on. They will use the crowdfunding campaign to fund 5 key areas of work:

      1. To deliver political training sessions, that will equip members with the skills and confidence to advocate for a better food system.
      2. To send representatives to Westminster on a regular basis to make sure we have a place at the table.
      3. To write, print and get our post-Brexit Agriculture policy proposals into the hands of political decision makers.
      4. To organise stunts and actions that ensure our voices are heard.
      5. To highlight our issues by organising study tours of innovative farms, direct marketing and new entrant initiatives for MPs and civil servants.

    Their crowdfunding campaign More Farmers, Better Food intends to fund their work lobbying and campaigning to influence the policy making process. It will support them to ensure the future of the UK food system guarantees farmers and food workers are able to work with dignity and earn a decent living, and everybody is able to access nutritious and affordable food.

    Now more then ever the future of our farms, our land, our food is in our hands. Let’s put control over the food system back into the hands of our communities!

    With just less than one week left to go on our crowdfunder – please support the campaign today!
    https://tinyurl.com/yanu8rpc

    Post-Brexit farming funding set out by Michael Gove

    Contrary to BBC Radio-4 and BBC TV News bulletins, the following BBC News Online report doesn’t mention that Michael Gove announced that a future post-brexit UK Agricultural subsidy system will support provision by landowners for public access as well as environmental measures which it does cite below such as farmers rewarded for planting woodland, boosting wildlife, improving water quality and recreating wildflower meadows.


    Post-Brexit farming funding set out by Michael Gove
    by Roger Harrabin, environment analyst
    4/1/2018, BBC News
    Ref: http://www.bbc.co.uk/news/uk-politics-42559845

    Plans for the way farming subsidies will be dealt with after Brexit have been set out by Michael Gove.

    Farmers will receive payments for “public goods”, such as access to the countryside and planting meadows.

    The environment secretary told farmers the government would guarantee subsidies at the current EU level until the 2022 election. There would then be a “transitional period” in England.

    The National Farmers Union said it was time for “a new deal” for the UK.

    Fergus Ewing, the Scottish rural economy secretary, said Mr Gove had left “too many questions unanswered”.

    Meanwhile, a report warns Brexit trade deals could threaten UK food security.

    MPs and peers in the All-Party Parliamentary Group on Agroecology (APPGA) say ministers must ensure farmers are not undermined by future trade deals which permit imports of food produced with lower welfare or environmental standards.

    • Farm subsidies ‘must be earned’ – Gove
    • Countryside faces ‘damaging uncertainty’
    • Five times food fights have had an impact on trade talks

    Mr Gove, who has promised that standards will not be compromised after Brexit, addressed two farmers’ conferences in Oxford on Thursday.

    His speeches came ahead of the government’s agriculture plans being published this spring.

    The current payment system – £3bn a year to UK farmers – is based on the amount of land farmers own.

    Detailing how the European Union’s Common Agricultural Policy (CAP) will be replaced after Brexit, Mr Gove said the CAP was “unjust” and “doesn’t really reward efficiency”.

    The government has agreed to maintain current subsidies for three years after Brexit, until 2022, and Mr Gove said the payments could continue until 2024 but the length of time would be down to “consultation”.

    Mr Gove said during that time he aimed to reduce the largest subsidies, with a maximum cap or a sliding scale of reductions.

    He said there should be a “smooth path” towards a new way of paying farmers when EU subsidies ended and that a new method would “use public money for public goods”.

    The plans would see farmers rewarded for planting woodland, boosting wildlife, improving water quality and recreating wildflower meadows.

    Speech ‘no comfort’

    The environment secretary said he was “confident” about the future of British farming and that Brexit would allow the UK to “leverage” the advantages of Britain producing “the best food in the world” and “some of the most innovative farmers in the world”.

    New trade deals with other countries outside the EU would provide new markets for the “superb food” Britain’s farmers produce, Mr Gove said.

    Minette Batters, deputy president of the National Farmers Union, welcomed incentives to protect the environment but said her key concern was over future trade deals.

    She said: “We’re very proud of our high standards of environmental protection, of welfare, in the UK and we want those to be respected in any trade negotiation and we do not want to see cheaper food produced to lower standards.”

    Mr Gove’s counterpart in Scotland, Mr Ewing, said Mr Gove’s speech “leaves far too many questions unanswered for any comfort to be taken“.

    He said it did “not cover a whole variety of vital support schemes“, such as environmental programmes, “which are crucial to ensure the continued economic well-being of all of Scotland’s rural communities“.

    For many years the government has argued that EU farm policy is wasteful and bad for the environment.

    It has driven birds out of the countryside, led to soil erosion, and caused the loss of woodlands and wildflower meadows.

    Over many years, attempts to reform the policy have been resisted by farm unions, especially in France.

    But Brexit has given Mr Gove the opportunity to produce a farm policy made in Britain.

    His changes will alarm those farmers who will need to change their whole business model to get subsidies after Brexit.

    It will be welcomed by some efficient modern farmers who have already accepted that being paid by the public for owning land can’t be justified.

    The changes will impact on the countryside and food production.

    It’s too soon to tell exactly how.

    ‘Best possible deal’

    Mr Gove’s speech comes as the APPGA report says post-Brexit trade deals could pose the biggest peacetime threat to the UK’s food security.

    According to the group, the import of cheaper foods that are produced to lower safety and welfare standards could place UK farmers at a disadvantage.

    To compete with these lower prices, domestic farmers could seek to tighten their margins and therefore cut corners with regards to environmental regulations,” the AAPG said.

    If the UK is unable to protect its farmers from being undermined by lower welfare imports, farmers are likely to resist improvements and may even press for UK standards to be lowered

    introducing “Ourfield” – a cooperative co-farming/crop share investment collective grains movement

    OurField is a co-op grains movement that will change the way we grow grains forever, which has started in one field #OurFieldWeston collectively farmed by 40 people, on Cherry farm, in Hertfordshire.

    Ref: http://www.ourfieldproject.org/

    Do you dare to crop share? #OurField grows
    by Tessa Tricks on 7 December, 2017
    Ref: http://sustainablefoodtrust.org/articles/12271/

    This past spring, I joined 41 others in the project #OurField, co-invest in a crop. Together with a farmer, we decided what to grow, how to grow it and what we would do with the crop. #OurField is a co-operative grains movement seeking to shift our relationship with food and its production, and working to make the food system a fairer place for farmers.

    The financial and emotional support of investment allows farmers to experiment with different growing methods, learn about new opportunities and better understand public perspectives. At the same time the investors share the farmer’s risks and challenges. It’s as much about empathy and sharing the experience, as it is learning about food production.

    Much has happened since I last wrote about the collective. We’ve chosen a crop, disputed how organically to grow it and grappled with taking it to market. Anyone can peer into the window of the collective decision-making process by visiting Loomio, the online platform that helped the geographically and ideologically disparate investors in #OurField, reach consensus.

    In the grand scheme of our decision making, crop choice was relatively straight forward.

    On the first vote we agreed that we would grow spelt with a companion crop which would not be harvested but instead act as a weed suppressant and help to build soil fertility.

    Things got tricky when we had to decide on whether to add nitrogen fertiliser to the crop. In the words of one co-investor ”The first decision helped give the project a bit of an identity, a face (or crop) to a name. [But] the second decision could have a big impact on the end-result of our experiment.” The vote was close with many on the fence wrestling with the sheer number of factors at play – you can find them outlined in detail on the Loomio site and in this blog from the our field team.

    At the last minute the vote swung towards the decision not to use nitrogen fertiliser on the crop.

    I am very pleased that a high degree of respect was maintained during all discussions online, despite differing opinions. I think everyone has found it a learning journey. So many variables come up about every decision, it constantly brings you down to earth, and we are reminded how big the task at hand is when growing 20 acres of cereals.
    Abby Rose, Our Field Co-ordinator

    As one of the investors with the least experience in the field, I found the urgency as well as the complexity of the decisions we had to make, a challenge. The crop doesn’t stop growing just because our lives are busy. You can’t ask the ripe field of spelt for an extension to read up on the pros and cons of different agricultural techniques. I don’t think I was the only one that struggled to keep up at times. The number of people involved in coming to the decision dwindling as the project progressed. Less than half have actively participated in discussions since the first vote, and half of that again have been proactive in driving the discussion. I caught up with a number of the co-op investors to see how they were finding the experience and how it faired alongside their expectations.

    Urban grower and self- identified tech geek, Darren was keen to see how the online platform could be used to make it easier for people to participate in the governance of community supported agriculture. “At times I’ve found it slightly frustrating, wanting to know more, or be more involved, but there is so much to be done, and so much to understand, in both the farming process and running a project like this, transmitting all information is impossible. Considering everything, I think the team have been doing a great job.

    When asked what advice he would give to new investors, Darren declares, “Go for it. Even if you don’t think you have much time to be involved, you will learn loads about how your food is produced and will be helping to support a new, hopefully better way of organising our food production.

    Christine, like Darren has been one of the more vocal contributors. She joined due to her interest in micro-bakeries and has found that the project helped her to learn a huge amount about the supply system. “I am horrified that the value of the crop is so low and by the risks farmers have to take. I now want to know much more about farming subsidies and how that system works and how a ‘crop to mill’ cooperative could work.

    She’s struggled with the shifts in the group’s energy and the time that she’s been able to contribute and warns future potential investors “not to underestimate the amount of work needed to keep the momentum going, it shouldn’t fall to just a few”.

    Many of the co-investors appreciate that consensus-making with a group of forty was always going to be a challenge and they have been prepared to take a back seat, investing their money, but not their time. “I knew from the beginning that this was a project I was intrigued by and keen to support, without it being one that I would necessarily dedicate myself to, beyond paying and trying to stay up to date.” Others struggled with the remote nature of the task, “I would have stayed more engaged if the key decision-making discussions took place face to face. If you hadn’t looked at Loomio for a while, it seemed too daunting to catch up.”

    Unanimous among the group is that much has been learnt and the pressures upon the farmer are many and far ranging. Albeit brief, a stint in his shoes has been eye-opening and rewarding for all.

    John Cherry, our innovative farmer has also learnt a lot, taking risks that he wouldn’t have afforded otherwise and great joy in the process, he says.

    I have particularly enjoyed growing a spelt crop without any inputs – something I like the idea of, but left to my own devices, I couldn’t have resisted spraying most of the weeds out and giving it a dollop of fertiliser. It was a disappointing year for spring crops with the long dry periods and poor growing conditions, so quite possibly the no input regime was the best thing we could have done!

    It is a fairly pain-free way of trying something new, …it’s not your decision so you don’t kick yourself for mistakes, and financially you are sharing the risk with [more than] 40 other people. More importantly it is fun and educational…having to explain what we do to such a clever bunch of people helps us see things through the eyes of others. Farmers don’t get out very often…”

    This month the group will decide where to sell the spelt, which unfortunately wasn’t of a high enough Hagberg number to be milled for bread flour, we are assessing options such as beer, gin, animal feed and biscuit grain. We will also have to decide how to proceed in the year ahead. Will John keep us on for another year, and will any of the collective cash out? Keep an eye on Loomio for final updates and watch this space for a handbook so you can start your own #OurField project anywhere in the world.

    How the Aristocracy Preserved Their Power, by Chris Bryant (source: The Guardian)

    How the aristocracy preserved their power

    After democracy finally shunted aside hereditary lords, they found new means to protect their extravagant riches. For all the modern tales of noble poverty and leaking ancestral homes, their private wealth and influence remain phenomenal
    by Chris Bryant
    7th Sept 2017
    The Guardian
    Ref: https://www.theguardian.com/news/2017/sep/07/how-the-aristocracy-preserved-their-power
    On 11 January this year, Charlie, the genial 3rd Baron Lyell, died aged 77 in Dundee after a short illness. He had inherited his title and the 10,000-acre Kinnordy estate, in Angus, when he was just four years old. After Eton, Christ Church and the Scots Guards, he spent nearly 47 years in the Lords, serving as a Conservative minister from 1979 to 1989. He never married and his title died with him, but under the byzantine rules drawn up when the majority of hereditary peers were excluded from the Lords in 1999, his seat was contested in a byelection in which 27 hereditary peers stood.

    In the short statement required of them, most of the candidates emphasized their career and credentials, but Hugh Crossley, the 45-year-old 4th Baron Somerleyton, went straight for the ideological jugular: “I think the hereditary peerage worth preserving and its principle creates a sense of innate commitment to the welfare of the nation,” he wrote.

    It is not difficult to understand why Crossley would think that way. He was born in, owns, lives in and runs Somerleyton Hall near Lowestoft, Suffolk, which was bought by his carpet-manufacturer ancestor Sir Francis Crossley in 1863. It is palatial, with elaborate Italianate features, a maze, an aviary, a pergola 300ft long, a marina, a 12-acre garden and a 5,000-acre estate. His own publicity material claims that “a trip to Somerleyton is an experience of historical opulence”. Of course he believes in the hereditary principle and his own entitlement.

    For most of the 20th century, the aristocracy showed itself remarkably indifferent to the welfare of the nation, if attendance in the upper house is any indication. Debates in the Lords were cursory and poorly attended. Peers had a short week – rarely sitting on a Monday or Friday – and short days, starting at 3.45pm or 4.15pm. During the second world war, there were rarely more than two dozen peers in attendance, and in the postwar years the trend was accentuated. The tedious business of daily attendance no longer interested their lordships, but when their personal interest was at stake or their hackles were raised, they would turn up in force. This became evident in 1956 when the Commons carried a private member’s bill to abolish the death penalty and the Lords voted it down by a resounding 238 votes to 95.

    Today, of course, we are accustomed to thinking of Britain’s aristocracy as a quaint historical curiosity. Under Tony Blair’s first government, most hereditary peers were removed from the Lords. Some might think this a fall from grace, but the very fact that 92 hereditaries were to remain (a larger number than had attended most debates over the previous eight decades) was a victory that proved their enduring strength. They had not just delayed but prevented democratic reform of the Lords, and they had entrenched their reactionary presence.
    By the 1990s, politics had become a minority interest for the aristocracy, yet for those who chose to exercise their parliamentary rights, the Lords gave them safe passage into government. John Major appointed a string of hereditary peers to his government. The leader of the House of Lords was Viscount Cranborne, heir to the 6th Marquess of Salisbury, and among the ministers were seven earls, four viscounts and five hereditary barons. Even the administration formed by Theresa May in June 2017 included one earl, one viscount and three hereditary barons.

    Behind the beauty of the British aristocracy’s stately homes and the sometimes romantic and eventful lives they led, lies a darker story: a legacy of theft, violence and unrepentant greed.

    Historically, the British aristocracy’s defining feature was not a noble aspiration to serve the common weal but a desperate desire for self-advancement. They stole land under the pretence of piety in the early middle ages, they seized it by conquest, they expropriated it from the monasteries and they enclosed it for their private use under the pretence of efficiency. They grasped wealth, corruptly carved out their niche at the pinnacle of society and held on to it with a vice-like grip. They endlessly reinforced their own status and enforced deference on others through ostentatiously exorbitant expenditure on palaces, clothing and jewellery. They laid down a strict set of rules for the rest of society, but lived by a different standard.

    Such was their sense of entitlement that they believed – and persuaded others to believe – that a hierarchical society with them placed firmly and unassailably at the top was the natural order of things. Even to suggest otherwise, they implied, was to shake the foundations of morality.

    They were shocked and angered when others sought to deprive or degrade them. They clung tenaciously to their position. They developed ever more specious arguments to defend their privileges. They eulogised themselves and built great temples to their greatness. They jealously guarded access to their hallowed halls. And when democracy finally and rudely shunted them aside, they found new means of preserving their extravagant riches without the tedium of pretending they sought the common interest. Far from dying away, they remain very much alive.

    For all the tales of noble poverty and leaking ancestral homes, the private wealth of Britain’s aristocracy remains phenomenal. According to a 2010 report for Country Life, a third of Britain’s land still belongs to the aristocracy.

    Notwithstanding the extinction of some titles and the sales of land early in the 20th century, the lists of major aristocratic landowners in 1872 and in 2001 remain remarkably similar. Some of the oldest families have survived in the rudest financial health. In one analysis, the aristocratic descendants of the Plantagenet kings were worth £4bn in 2001, owning 700,000 acres, and 42 of them were members of the Lords up to 1999, including the dukes of Northumberland, Bedford, Beaufort and Norfolk.

    The figures for Scotland are even more striking. Nearly half the land is in the hands of 432 private individuals and companies. More than a quarter of all Scottish estates of more than 5,000 acres are held by a list of aristocratic families. In total they hold some 2.24m acres, largely in the Lowlands.
    Many noble landholdings are among the most prestigious and valuable in the world. In addition to his 96,000-acre Reay Forest, the 23,500-acre Abbeystead estate in Lancashire and the 11,500-acre Eaton estate in Cheshire, the Duke of Westminster owns large chunks of Mayfair and Belgravia in London. Earl Cadogan owns parts of Cadogan Square, Sloane Street and the Kings Road, the Marquess of Northampton owns 260 acres in Clerkenwell and Canonbury, and the Baroness Howard de Walden holds most of Harley Street and Marylebone High Street. These holdings attract some of the highest rental values in the world. Little has changed since 1925, when the journalist WB Northrop published a postcard portraying the octopus of “landlordism” with its tentacles spread across London, charging the aristocracy with pauperising the peasantry, paralysing the building trade and sucking the lifeblood of the people.
    One legal provision unique to England and Wales has been of particular importance to these aristocratic landlords: over the centuries they built many millions of houses, mansion blocks and flats, which they sold on a leasehold rather than freehold basis. This meant that purchasers are not buying the property outright, but merely a time-limited interest in it, so even the “owners” of multimillion-pound residences have to pay ground rent to the owner of the freehold, to whom the property reverts when their leases (which in some areas of central London are for no more than 35 years) run out. This is unearned income par excellence.

    Built property aside, land ownership itself is still the source of exorbitant wealth, as agricultural land has increased in value. According to the 2016 Sunday Times Rich List, 30 peers are each worth £100m or more.

    Many aspects of those peers’ lives have barely changed over the centuries. Edward William Fitzalan-Howard, the 18th Duke of Norfolk, is still the premier duke of England, as well as being the Earl Marshal, the Hereditary Marshal of England, a member of the Lords and the holder of nine other titles. His landholdings are obscure, but, as he (under-)stated in his maiden (and only) speech in the Lords: “I farm in West Sussex and own moorland in North Yorkshire”, and he still lives at Arundel Castle. Many of those who have ceded their homes to the National Trust or to a charitable trust of their own devising (with all the concomitant tax advantages) still occupy their ancestral pads, with the added benefit of modern plumbing and wiring. The Dowager Countess of Cawdor still lives in her son’s castle thanks to a tax exemption, the Marquess of Curzon still lives and shoots at Kedleston, Derbyshire, thanks to the National Heritage Memorial Fund (NHMF), and the Duke of Marlborough still dines in the saloon at Blenheim, which charges a £24.90-a-head entry fee for visitors.

    The country-house business is in fine fettle. True, the owners of lesser homes face significant challenges and a few peers have decided to downsize. In 2005 Lord Hesketh sold Easton Neston – designed by Nicholas Hawksmoor – in Northamptonshire (but kept Towcester racecourse). The 7th marquess of Bute offered Dumfries House to the National Trust for Scotland, and when they refused it Prince Charles stepped in with a consortium that found £45m to purchase the house and its contents in 2007, and endow it for the future. (It got £7 million from the NHMF.)

    Grand homes such as Chatsworth, Woburn and Longleat attract many thousands of visitors, while the stately homes that survived in private hands up until 1960 are virtually all still in the same private hands today, and many peers continue their annual peregrination from one well-appointed palace to another. The Buccleuchs, for instance, have the rose-coloured sandstone palace of Drumlanrig, in Dumfries and Galloway, as their main home, but they spend winter months at the much-enlarged hunting lodge, Bowhill, in the Borders, and at Boughton in Northamptonshire, an 11,000-acre estate that includes five villages and a stately home that hosts artworks by Van Dyck, El Greco and Gainsborough. When the previous duke made this journey, he would be accompanied by Leonardo da Vinci’s Madonna of the Yarnwinder – the only Leonardo in private hands – until it was stolen in 2003.

    Habits and obsessions have barely changed. Of today’s 24 non-royal dukes, half went to Eton. Twenty-first-century aristocrats still belong to the same clubs their ancestors frequented: Brooks’s, Boodle’s, Pratt’s and White’s. Like Nancy Mitford in 1955, they entertain themselves distinguishing between U terms, as used by the upper classes (“napkins”, “false teeth”, “spectacles” and “vegetables”), and Non-U, or middle-class, ones (“serviettes”, “dentures”, “glasses” and “greens”). They play polo and love guns, horses and hounds. The 12th Duke of Devonshire has been the queen’s representative at Ascot, senior steward of the Jockey Club and a prominent buyer and seller of fine art (in 2012 he sold a Raphael for £29.7m). The 10th Duke of Beaufort was master of his eponymous hunt for 60 years and the hunt still meets regularly at Badminton, Gloucestershire. Emma, Duchess of Rutland, hostess of the Belvoir hunt and countless shooting parties, is so committed to making shooting a central attraction at Belvoir that she toured all the best shoots in the land and published her rhapsody to hunting in Shooting: A Season of Discovery.

    How have the aristocracy achieved such a remarkable recovery of their fortunes? First, in common with their ancestors, they have systematically, repeatedly and successfully sought to avoid tax. The 18th-century satirist Charles Churchill wrote words that might have been the common motto of the aristocracy:

    What is’t to us, if taxes rise or fall,
    Thanks to our fortune, we pay none at all.

    Thus, when the 2nd Duke of Westminster deliberately paid his gardeners in a way that obviated any tax liability and was challenged in court, the judge, Lord Tomlin, ruled in 1936 that: “Every man is entitled, if he can, to order his affairs so that the tax attracted under the appropriate act is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax.”

    His fellow peers took this principle to heart. William and Edmund Vestey, the meat-packing businessmen who in 1922 bought themselves a peerage and a baronetcy from the prime minister, David Lloyd George, for £20,000, regularly begged to be excused income tax, went into tax exile in Argentina and settled their finances in a trust based in Paris, whose accounts were filed in Uruguay that saved the family £88m in tax. In 1980, Samuel, the 3rd Baron Vestey, and his cousin, Edmund, were found to have paid just £10 in tax on the family business’s £2.3m profit. When they were challenged, Edmund shrugged his shoulders and said: “Let’s face it. Nobody pays more tax than they have to. We’re all tax dodgers, aren’t we?”

    When the trustees of Castle Howard, a stately home in North Yorkshire, sold Joshua Reynolds’s painting Omai for £9.4m to pay for its aristocratic occupant Simon Howard’s divorce in 2001, they argued they should not have to pay capital gains tax on it as it was part of the fabric of the castle, and therefore a “wasting asset”, which was exempt. Extraordinarily, in 2014 the Court of Appeal agreed. This tax loophole was closed in the 2015 budget.

    The primary means of squirrelling away substantial assets so as to preserve them intact and deliver a healthy income for aristocratic descendants without bothering the taxman is the trust. Countless peers with major landholdings and stately homes have put all their assets into discretionary trusts, thereby evading both public scrutiny and inheritance tax. This is the case with the Duke of Westminster’s Grosvenor estates, whose trustees, chaired by the duke, dole out benefits and payments to members of the family while keeping the assets separate from any individual’s estate. Her Majesty’s Revenue and Customs is entitled to a percentage of the value of the trust fund every 10th anniversary of its creation, but after exemptions for farms and businesses have been taken into consideration, the Revenue is left virtually empty-handed.
    Income is subject to tax, but the patrimonial asset remains intact. In 1995, the 9th Duke of Buccleuch complained that the Sunday Times Rich List had overestimated his worth at £200m, as he owned “no shares in Buccleuch Estates Ltd”. Legally, he was quite correct. Despite being a parent company for a string of valuable joint ventures and property holdings, the company is vested in four Edinburgh shareholder lawyers at a total value of £4. Since today’s directors are the 10th duke, the duchess, their heir, the Earl of Dalkeith, and the duke’s two brothers, John and Damian, it is difficult not to conclude that the Buccleuchs are in reality the beneficial owners.

    Dozens of the old nobility have done the same, meaning that the family trust can quietly provide a house, an income, a lifestyle (and, if required, a divorce settlement) to any number of beneficiaries without fearing inheritance tax or the prying eyes of the public.

    Aristocrats may not like paying tax, but they don’t object to taking handouts from the taxpayer. The landed aristocracy has benefited to an extraordinary degree from payments under the EU’s common agricultural policy. The figures are staggering. At least one in five of the UK’s top 100 single-payment recipients in 2015/16 was aristocratic.

    The richest have carried off the most. The Duke of Westminster’s Grosvenor Farms estate received £913,517, the Duke of Northumberland’s Percy Farms took £1,010,672, the Duke of Marlborough’s Blenheim Farms got £823,055 and Lord Rothschild’s Waddesdon estates received £708,919. This is all in a single year. Multiplied across the years, the payments from the EU have benefited the British aristocracy to the tune of many millions of pounds.

    Exploiting the system is second nature to the landowning class. The 11th Duke and Duchess of Beaufort, the owners of Badminton House, have benefited handsomely from their property rights. Their company, Swangrove Estates Ltd, whose directors are the duke and duchess; their son, the Marquess of Worcester; and grandson, the Earl of Glamorgan, received £456,810 from the CAP in 2014/15, and in 2009 it was discovered that the duke had exercised his ancestral rights over the riverbed in Swansea by charging the council £281,431 to build a bridge across the river from a shopping centre to Swansea FC’s Liberty Stadium. With the help of the taxpayer – and no little ingenuity of his own – the duke has secured a fortune reckoned to be about £135m.

    The EU is not their only source of financial assistance. Charles Chetwynd-Talbot, 22nd Earl of Shrewsbury, who lives at the 17th-century manor house of Wanfield Hall in Shropshire and is president of the Gun Trade Association, has auctioned off a number of feudal titles, including that of High Steward of Ireland, a practice that has helped keep several other peers in the style to which their families had become accustomed. In April 2015, the earl put the lordship of Whitchurch up for sale; in 1996 Earl Spencer sold the lordship of the manor of Wimbledon for $250,000; and at the time of writing Manorial Auctioneers Ltd claim to be auctioning lordships of the manor, a seignory in Jersey and a feudal barony in Ireland on the instructions of “members of the aristocracy”.

    Attendance in the House of Lords brings in an income, too, although peers are keen to state that it is not a salary. When life peerages were introduced in 1958, the Marquess of Salisbury was quick to point out the three guineas a day they were paid did not represent “any additional remuneration; it is merely repayment for expenditure which has already been incurred by noble lords in the performance of their duties”. So too, today peers may claim £300 a day if the Lords records show that they attended a sitting of the house, or £150 a day if they undertook qualifying work away from Westminster.
    In March 2016, when the Lords sat for 15 days, 16 earls were paid £52,650 between them in tax-free attendance allowance, plus travel costs, and 13 viscounts received £43,050. The Duke of Somerset claimed £3,600, and the Duke of Montrose was paid £2,750 plus £1,570 in travel costs: £76 for the use of his car, £258 for train tickets, £1,087 for air tickets and £149 for taxis and parking costs. The duke spoke in debate or in grand committee just twice in the whole parliamentary session, and not at all that March.

    The secret to the survival of the old aristocracy through the centuries was the mystique of grandeur they cultivated. They dressed, decorated and built to impress, so that nobody dared question their right to rule. The secret of their modern existence is their sheer invisibility. As the Daily Mail commented when Tatler magazine gathered a table of 10 dukes together in 2009: “Once, the holders of these titles would have been the A-list celebrities of their time. Today, most people would be pushed to name a single one of them.”

    That is no accident. British laws on land tenure, inheritance tax, corporate governance and discretionary trusts still make it easy to hide wealth from public view. Land is subsidised, and taxed more lightly than residential property. Unearned income bears less of a burden than earned income. All this quietly underpins the continued power of the aristocracy, wrapped in the old aura of entitlement, counting its blessings and hoping that nobody notices.

    Curiously enough, Nancy Mitford, that sceptical daughter of the preposterously rightwing 2nd Baron Redesdale, was probably right: “It may well be that he who, for a thousand years has weathered so many a storm, religious, dynastic and political, is taking cover in order to weather yet one more.”

    Entitled: “A Critical History of the British Aristocracy”, by Chris Bryant is published today by Doubleday, priced £25. To order a copy for £21.25, go to bookshop.theguardian.com or call 0330 333 6846. Free UK p&p over £10, online orders only. Phone orders min p&p of £1.99

    European Parliament approves ban on pesticides in environmentally-sensitive areas

    The European Parliament on 14 June 2017 endorsed a ban on the use of pesticides on environmental sensitive areas.

    Ban on pesticides on sensitive areas
    by John Swire on June 15, 2017
    Source: FarmBusiness.co.uk
    Ref: http://www.farmbusiness.co.uk/business/politics/ban-on-pesticides-on-sensitive-areas.html

    A group of MEPs in the European Parliament failed to block a European Commission proposal to ban the use of pesticides on ecological focus areas.

    Under the approved legislation, farmers who receive subsidies from the bloc’s Common Agricultural Policy (CAP) for improving biodiversity on land set aside for nature conservation will no longer be allowed to spray pesticides there.

    Farmers with arable land exceeding 15 hectares must ensure that at least 5% of their land is set aside for nature improvement. This includes measures that affect biodiversity such as field margins, fallow land, buffer strips and hedges and trees.

    It is up to national governments to draw up a list of ecological focus areas, based on a common EU definition, and taking national circumstances into account.

    Before the final vote in parliament, 363 MEPs had backed a resolution seeking to dismiss the pesticide ban, just 13 short of the 376 required for a majority.

    Peoples’ Food Policy – www.peoplesfoodpolicy.org

    This policy may been seen as being especially useful at a time when there is a pretty blank slate in front of us post-brexit, which big business will be ready to take over if we are not. The preparation of this originally came out of the food sovereignty gathering in Hebden Bridge in Nov 2015, and was subsequently developed by a team. There was a web-based invitation for anyone to run workshops, according to a framework and to upload what came from them.

    Now the policy has been produced as a 53 page doc. www.peoplesfoodpolicy.org

    Note that the name of this initiative was changed from ‘national food policy’ to ‘people’s food policy’.

    __._,_.___

    Defra secretary Michael Gove indicates departure from largess of subsidies to large landowners & refocus on environment & countryside stewardship in post-brexit UK farm subsidy system

    …a flurry of sweeteners for those of us who cast a critical glance on social and environmental justice and sovereignty issues (Gove has even mooted the end of live animal export). We will assuredly hear avowed assurances on how post-brexit the UK will protect our food and animal welfare standards to extinguish any notion that the UK will capitulate to the lower environmental standards of the USA in any future trade deal, but brace yourself for a more subtle and insidious outline of his views on Agricultural-technology and “innovation” in tandem with Liam Fox’s preparations for new international trade deals across the world, with biotech an essential component of that.

    The Royal Norfolk Show 2017: Defra secretary Michael Gove hears Brexit priorities from East Anglian farmers
    by Chris Hill
    PUBLISHED: 28 June 2017
    Source: The East Anglian Daily Times
    Ref: http://www.eadt.co.uk/news/the-royal-norfolk-show-2017-defra-secretary-michael-gove-hears-brexit-priorities-from-east-anglian-farmers-1-5082801

    Environment secretary Michael Gove said he was in “listening mode” to understand the Brexit concerns of East Anglia’s farming community during his visit to the Royal Norfolk Show.

    The cabinet minister acknowledged he is “new to the world of farming”, but keen to hear the views of farmers as he was shown the region’s latest agri-tech and science developments at the Innovation Hub, and met local producers in the food hall.

    Many of the issues discussed revolved around the nation’s looming departure from the EU and its Common Agricultural Policy (CAP), which will demand new policies to be written which will dictate farmers’ ability to trade and compete, the degree to which they are financially supported, and their ability to recruit seasonal migrant workers.

    “I’m listening,” he said. “The single most important thing I can do at this stage is to listen so I can be an effective advocate for farming in government.

    “The first thing to say is I have friends in Norfolk. I have a friend who farms just outside Great Yarmouth and a friend who farms near King’s Lynn. So I already have some familiarity with the issues.

    “The other great thing is that people have been completely candid with me today and I think that their concerns and hopes boil down to a number of specific areas.

    “One is what would be the nature of subsidy and support in the future, and as we leave the CAP and as the CAP changes itself, will money be there for environmental support and countryside stewardship? And, if so, what will the criteria be, and will there be other ways that farmers are supported in the valuable work they do? So money is ‘issue one’.

    “Issue two is labour. People want a guarantee that they will be able to secure the labour they need in order to make sure our rural economy keeps going.

    “One of the things I am determined to do as we fashion a new migration policy, is to ensure the needs of agriculture and the rural economy are at the heart of it.

    “I think the third thing I would mention is the opportunities presented by our new trading arrangements. Farmers recognise that as we leave the EU there are opportunities because of the high quality produce that the UK is famous for, and Norfolk in particular is noted for, there is an opportunity to sell more abroad – but we also need to make sure that as we do sell abroad that we do not compromise our high environmental and animal welfare standards.”

    Mr Gove, a key architect of the “Leave” campaign during last year’s EU referendum, said Brexit represented a “huge opportunity for British agriculture”, opening up new markets overseas and freeing farmers from the “onerous bureaucracy” of the EU.

    He also reaffirmed the government’s commitment to maintain current subsidy payments at their current level until at least 2022, and whatever happened beyond that, he was determined to ensure farmers could compete in international markets.

    “Subsidy, if it is applied in the wrong way, can actually make farmers less productive,” he said. “So just because some other countries have subsidies it does not mean they are as productive as we can be.

    “We can compete best on quality. The critical thing about British farm produce is that in a world where provenance matters more, where people want to know the journey from farm to fork in intimate detail, Britain is in a very strong position because of the high environmental and animal welfare standards that we maintain.”

    Among the farming industry representatives who spoke to Mr Gove were Jon Duffy, chief executive of Anglia Farmers, who said: “I am impressed that he is here in the first place, and that he wants to go out and take soundings on people’s views. He asked questions rather than telling us what would happen.

    “I said I would like to see agriculture further up the agenda within Defra, and Defra further up the agenda in Brexit. He listened, and he understood that.”

    Shipdham dairy farmer Ken Proctor, Norfolk’s county delegate for the National Farmers’ Union (NFU) also spoke to the Defra minister. He said: “I was impressed that he listened to the subjects we were portraying, he took evidence and asked questions, which showed the message was received loud and clear.

    “He was saying that Defra is going to be a much more important department in the government now and after Brexit, and I think that is very important.”

    See also: The problem with the EU Common Agricultural Policy – TLIO information briefing

    Economic analysis of the Common Agricultural Policy: The CAP – cap it or scrap it?

    30 Country estates given £4million subsidy in 2014 for grouse-shooting

    Duke of Westminster given millions in public cash for grouse moor: investigation
    Published: 28 Oct, 2016
    https://www.rt.com/uk/364569-grouse-moor-public-subsidy/
    English grouse moors, including one owned by royalty, have been shored up with millions of pounds in public money despite the climate of austerity.
    Thirty of the estates where the birds are raised and shot received £4 million (US$4.85 million) in public cash in 2014, including one owned by the Duke of Westminster.
    The duke is the richest landowner in the UK and is worth an estimated £9 billion.
    The investigation carried out by Friends of the Earth supports an argument by campaigners who say that grouse farming is damaging to the environment and uses far too much space.
    MPs are due to debate the issue on Monday after 120,000 people signed a petition to ban the most common form of grouse shooting……..

    **************************************************************

    Grouse shooting estates shored up by millions in subsidies
    Common agricultural policy money given to estates in England, including one owned by the Duke of Westminster, Britain’s richest landowner
    by Damian Carrington
    Friday 28 October 2016
    Ref: https://www.theguardian.com/environment/2016/oct/28/grouse-shooting-estates-shored-up-by-millions-in-subsidies

    England’s vast grouse shooting estates receive millions of pounds in public subsidies according to an investigation by Friends of the Earth.
    Thirty of the estates received £4m of taxpayer’s money between them in 2014, the year examined by the pressure group, including one owned by the Duke of Westminster, the richest landowner in Britain with land holdings estimated to be worth £9bn. The campaigners, who argue that grouse moor management harms the environment and wildlife, found the moors cover over half a million acres, an area equivalent to all the land within the M25, Greater London and parts of the home counties.

    The estates are owned by a mixture of lords, dukes, earls and barons as well as bankers, businessmen and firms based in offshore tax havens.
    MPs will debate the issue of grouse shooting on Monday, as the result of an official petition backed by more than 120,000 people which demands a ban on driven shooting, where beaters flush birds towards the guns.

    The petition claims the management of grouse moors leads to the illegal killing of birds of prey such as hen harriers, which prey on grouse, and the legal killing of foxes, stoats and mountain hares. It adds that the heather burning involved could worsen flooding and climate change.
    “These shocking new figures reveal the true, horrifying scale of grouse moors in England and the madness of the current farm payments system that subsidises them”, said Guy Shrubsole of Friends of the Earth.

    “Instead of handing out taxpayers’ money to billionaires and offshore firms to indulge in an elite sport, the government must reform farm payments so public money is spent on public goods – like tree-planting, restoring wildlife habitats, farming sustainably and preventing flooding downstream”, he said. The future of the £3bn a year the UK receives in EU agricultural subsidies is a key part of the Brexit debate.

    Amanda Anderson, director of the Moorland Association, said driven grouse shooting played an important role in conservation: “Almost two-thirds of England’s upland sites of special scientific interest (SSSIs) are managed grouse moors. Management has helped conserve this unique landscape, whereas elsewhere in Britain it has been lost to afforestation, windfarms or overgrazing”. Grouse shooting in England and Wales leads to more than £15m a year being spent in rural areas and supports more than 1,500 jobs, according to Anderson. She said: “There is no place for the illegal killing of any wildlife and no place in the Moorland Association for a grouse moor owner or manager found to have broken the law.”

    The Friends of the Earth investigation took a Moorland Association map showing ‘keepered grouse moors’ in England and compared it with government datasets and satellite images, which show where burning has taken place, to calculate the area. It found 550,000 acres of grouse moor, all in the north of England. FoE then used Land Registry data to identify 30 of the grouse moor estates, which cover 300,000 acres of the total. These estates received £4m of taxpayer subsidies in 2014 via the EU common agricultural policy (CAP).

    The largest subsidy was given to the Lilburn estate in Northumberland, owned by Duncan Davidson, the founder of housebuilding giant Persimmon Homes. In 2014, the estate received £1.6m in CAP subsidy, with another £1.3m in 2015.

    The Abbeystead estate in Lancashire owned by the Duke of Westminster’s Grosvenor estate received £7,200 in farm subsidies in 2014 and £203,000 in 2015. The Grosvenor Estate describes Abbeystead as “one of the premier sporting estates in the UK” and it is reputed to hold the record for most grouse shot in a single day: a total of 2,929 birds killed by eight shooters on 12 August 1915. The Mossdale estate in the Yorkshire Dales, owned by the Van Cutsem family, obtained £54,000 in subsides in 2014 and £170,000 in 2015. In June, the estate resigned from the Moorland Association after a keeper was filmed setting illegal pole traps.
    Records in Companies House show that some of the 30 estates identified by Friends of the Earth are owned by firms registered in offshore tax havens, such as the British Virgin Islands, Liechtenstein, Jersey and Guernsey.

    The Royal Society for the Protection of Birds (RSPB) does not support the petition to ban driven grouse shooting, but argues that new laws are needed. “As currently practised, intensive driven grouse shooting is a negative environmental impact”, said the RSPB’s Jeff Knott. “Grouse shooting can deliver benefits [for some birds], but not enough grouse moors are delivering to the highest standards”. The RSPB wants grouse shoots to require licences, which can be removed if the moors are not managed properly or if wildlife crimes occur. “Voluntary approaches clearly haven’t worked, said Knott. “There is denial that there is any problem and anyone who says otherwise is called anti-shooting.” A spokesperson for the Department of Environment, Food and Rural Affairs said: “We continue to work with conservation groups and landowners to ensure sustainable grouse shooting balances both environmental and economic needs”.

    The UK’s forthcoming departure from the EU has sparked a fierce debate about the future of agricultural subsidies. It was revealed in September that a billionaire Saudi prince received £400,000 a year to subsidise a farm where he breeds racehorses. The National Trust and many green NGOs have argued for a complete overhaul, ending payments for simply owning land and only rewarding farmers who improve the environment and help wildlife. The suggestion is opposed by the National Farmers Union, which says food production is vital.

    Land for What? – a participatory weekend of learning, thinking and planning practical action around land rights, ownership and usage

    An opportunity to take part in a participatory weekend of learning, thinking and planning practical action around land rights, ownership and usage, and how this connects to housing, food, health, nature and community:

    Land for What?

    A weekend of conversations about land hosted by Community Food Growers Network, Just Space, Landworkers’ Alliance, London Quaker Housing, New Economics Foundation, Radical Housing Network, Shared Assets, London Community Neighbourhood Co-operative, Three Acres And A Cow and Ubele

    Resource For London, Holloway, London
    November 12th – 13th 2016
    eventbrite – https://www.eventbrite.co.uk/e/land-for-what-tickets-28307396184
    website – http://landforwhat.org.uk/