Since the 1979 dawn of Thatcherism, the state has sold 10% of Britain’s land, and 50% of its public land. Why is no one scandalised?
Will Self – Thu 6 Dec 2018
If you’re someone who’s interested in Britain – and I mean Britain tout court: the whole 80,823 square miles of its physical existence – then this is a book you must read. If, further, you’re any kind of student of the nation (its politics, its social forms, its economic particularities) then Brett Christophers’ painstaking survey of land privatisation since the Thatcher era will tell you many things you already know. But it will also reveal how all these things you already know are, in fact, underpinned by a single terra incognita – in this case a literal one. For, after painstakingly scrutinising the evidence, and crunching the numbers, Christophers arrives at this extraordinary estimate: since 1979, no less than 10% of the land area of Britain has been sold by the state – in all its various guises and incarnations – to the private sector.
What land exactly are we talking about here? There’s certainly been a great deal of Forestry Commission land shed (at its peak, in 1981, it’s estimated that some 10% of Scotland was owned by the commission), although not as much as you might expect. And there is the land associated with the formerly nationalised industries – railways, coal, steel, water etc. Local authorities have notably allowed schools to build on their playing fields, and allotments to be concreted over, while the NHS, since the establishment of the so-called internal market, has disbursed itself of great swatches of the green and pleasant stuff, together with assorted buildings. As a result, some trusts now find themselves in the invidious position of having to buy back land to build hospitals on. As do some of those councils with the temerity to start building social housing again, because, of course, the land beneath the properties Margaret Thatcher gave their tenants the “right to buy” has been flogged off as well. So has a lot of the Ministry of Defence’s estate – old aerodromes and redundant firing ranges – but Christophers devotes considerable space to the utter fiasco attending the sell-off by the MoD of its residential properties. I could go on: suffice to say we’re talking billions of pounds here, approximately 400 of them. Christophers estimates total land privatisation sales to exceed the government’s bail out of RBS by a factor of 12.
This is the “new enclosure” of Christophers’ title: a transfer of rights to land comparable to the great centuries-long alienation of the so-called “commons” that constituted – for Marx at least – the “primary accumulation” of capitalism. We’re all familiar with the narratives associated with these original enclosures. For boosters, civilisation as we know it was born out of putting up the fences and stopping the peasantry from grazing their livestock. Christophers is at pains to distinguish between the alienation of rights involved in these historical enclosures (which didn’t necessarily entail transfer of title), and the new ones, where ownership is of the essence. In both instances, however, the rationale has been increased efficiency of resource exploitation.
The grand narrative of liberal progress, from improved agriculture, to investment in new industrial processes, to the giddy elevation of the City’s glassy epitomes of purely financial capitalism, arguably rests on this very prosaic footprint: land. As for neoliberalism, Christophers, after considering the available options, plumps for privatisation itself as its defining element. If privatisation, he writes, “is indeed the cardinal feature of British neoliberalism, then the biggest privatisation of them all, that of land, is arguably the country’s seminal political-economic development over the past four decades”. Why then, do we know so little about it – especially given we Britons are currently going through such a grand public convulsion regarding our sovereignty?
Christophers acknowledges the pioneering work of the late Doreen Massey (to whom his book is dedicated), whose analysis of land tenure in the period immediately preceding Thatcher’s privatisation drive sets the scene for what ensued. Massey was quick to understand that land was becoming “financialised” before the term was even coined – quick, also, to grasp its implications for both the commonwealth and individual rights.
That her initial work wasn’t taken further – or was developed only sporadically – is in large part, Christophers suggests, due to secrecy. The parties involved in the land privatisations have made no effort to publicise them. What’s more, while a vast array of state organisations have been charged with selling off their land to the private sector few have kept comprehensive records. This, perhaps, shouldn’t surprise us. The underlying pattern of land ownership in Britain has always been weirdly opaque, with no mandatory and centralised registration of title as there is in other countries. You don’t have to be a conspiracy theorist to see something sinister in this: Britain’s landlords are blatantly accorded more political power than the dispossessed. Christophers estimates that a quarter of currently sitting MPs are landlords of one sort or another, and avers that the most radical measure introduced by the Blair government was undoubtedly the abolition of the hereditary peers’ right to sit in the House of Lords, because this represented the last overt linkage between ownership and suffrage. But then casting a vote isn’t the only way of making the political weather – Christophers tellingly observes: “There is a clear symmetry or alignment between input (lobbying) and output (land privatisation and its beneficiaries) that is impossible to ignore or dispute.”
Land and power have been inextricably bound up with each other throughout British history, certainly since William of Normandy claimed ownership of the entire landmass by right of conquest. We can see the attenuation of monarchical and aristocratic power writ into law in the form of successive Reform Acts, which lowered the property requirement for suffrage – see it also in the large scale acquisitions of public land that began with the first world war, then continued throughout the 20th century, up until the Thatcherite climacteric.
If their justification for the big sell‑off was to invoke the “hidden hand” of the market as an agent of greater efficiency – both as an exploiter of the land’s resources, and as a means of signalling optimal investment opportunities – then the Thatcherites really didn’t know their Adam Smith. Christopher’s, by contrast, quotes gleefully from The Wealth of Nations: “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where never they sowed, and demand a rent even for its natural produce.”
An arch-liberal of the 19th century, John Stuart Mill, was yet more pointed: the landlords “grow richer, as it were, in their sleep, without working, risking or economising. What claim have they, on the general principle of social justice, to this accession of riches?”
So acute was Smith’s diagnosis of the problems associated with a market in land – namely, monopoly practices, followed inevitability by price volatility – that Christophers observes there could have been no Marx without him. (And it’s worth recalling that the first demand made in The Communist Manifesto is for the nationalisation of all land.) Far from private landowners utilising land more efficiently, and thereby boosting the overall economy, Christophers demonstrates that privatisation leads to the inversion of the so-called “tragedy of the commons” (the idea that if a community shares the ownership of something, nobody bothers to maintain it), because in their pursuit of the highest possible rents they restrict everyone else’s opportunity to enjoy social amenities. Taking the long view, it’s easy to see that the privatisation of public land since 1979 has heralded the beginning of the end of public space itself – if by that is meant the civic and rural spaces enjoyed by a notional “public”.
Christophers isn’t the only one to have addressed these troubling developments – more than a decade ago, Anna Minton’s Ground Control offered a prescient view of the impact of neoliberalism on urban space; and the sell-off of Britain’s once enviable stock of public housing has been well catalogued by James Meek in Private Island. Christophers points out that the most valuable element of a council property is usually the ground it stands on – as it is with many other properties: and this is because permission to build remains extant. There were measures in the past to ensure that the increased value of land zoned for construction would be shared by all – the so-called “betterment” levy, enshrined in the 1947 Planning Act – but the landlord interest soon saw to its abolition. In its place we have instead the land-banking practised by the so-called “big six” British house builders, as they drip-feed the market with a view to maximising their shareholders’ profits.
A rentier economy (Christophers uses the term unapologetically) is driven by profits, which have increased in real terms as the poor have been denied social housing and instead compelled to pay increased rates for ageing private stock. Setting to one side the scandal involved in quite so much land being shed – and often at prices well below market rates, given that if a seller is compelled, they’re hardly in a position to haggle – this transformation of the national wealth struck me as at once utterly bizarre, and strangely predictable. It’s a rule of contemporary economics that the sort of annual growth rates historically required to make Britain great were in the region of 6-7%; in the past we managed these mostly by ripping off stuff belonging to poorer people in other parts of the world, or by selling them stuff we’d made using equipment they didn’t have. But nowadays such comparative “advantages” no longer obtain, while the stock market has continued to decline, as have the bond yields of chronically indebted western nations. So it seems that in order to maintain the necessary returns on capital, we’ve resorted to a weird form of auto-cannibalisation: forcing our least advantaged to pay rents that, serendipitously, have increased by 6-7% per annum since 1979. Meanwhile, the rentier class keep right on reaping where never they sowed.
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The collapse in public ownership of land
NOVEMBER 8, 2018 By: Brett Christophers
In this guest post, Brett Christophers, professor in the Department of Social and Economic Geography at Uppsala University in Sweden, outlines the recent history of land privatisation in the UK. His latest book, “The New Enclosure: The Appropriation of Public Land in Neoliberal Britain” was published by Verso Books on 6 November 2018.
It is an oddity of political discourse in Britain that far-and-away the biggest privatisation also happens to be the one about which least is known.
This is the privatisation of land. Since 1979, when Margaret Thatcher entered Downing Street, approximately 2 million hectares of land — or 10 per cent of Britain — has disappeared from public hands, the vast bulk of which has entered private, as opposed to charity or community, ownership.
Around the same amount of land remains in public ownership today, and the government currently values this estate at £420 billion. Let’s say for the sake of argument that the land that has been sold is worth a similar amount. (In reality, it is probably worth much more: the most valuable parts of the public estate, such as local authority land, have suffered the biggest proportionate reductions; individual public-sector bodies have typically sold their most marketable sites; and much of the disposed land, unlike that remaining in government ownership, had planning permission). By way of comparison, no other UK privatisation has been worth more than a tenth of that sum.
There are many reasons this transfer is scarcely acknowledged in the vast archive of media and scholarly commentary on privatisation. The key one is that this has been a quintessential case of death by a thousand cuts. There are in the region of 1,000 different public bodies in the UK and the vast majority have sold sites, ranging from forest to defence land in the case of central government bodies, and from recreational to farm land in the case of local government bodies.
It is impossible to say with any certainty how many individual pieces of land have been sold in total: record-keeping, at least until recently, has generally been dire. But it is certainly several tens of thousands; there have been over 10,000 sales of local authority-owned school playing-fields alone. And yet because nobody has connected up the dots, land privatisation has essentially been ignored. After all, compared to the privatisation of British Telecom or a regional water utility, the privatisation of one hectare here or two hectares there is all too easy to overlook.
If the realisation of land privatisation has been fragmented, its origination has not. From the start this has been a deliberate program, driven centrally from Whitehall, and pursued with particular gusto during periods of Conservative-led government.
A variety of mechanisms have been employed to get landholding bodies to sell. Whitehall has dangled carrots, sometimes allowing sellers to retain and reinvest (some) disposal proceeds. It has set disposal targets. It has squeezed budgets, more-or-less compelling landholders to liquidate assets. And it has introduced laws preventing landholders from blocking sales, as it did most notably with local authorities and housing land under the Right to Buy.
Given the amount of land that has been sold and the fact that government guidelines stipulate that public bodies should secure market value on disposal, it is perhaps surprising that the UK’s public finances remain in such a parlous state. But the reality is that, very often, market value has not been achieved.
Sometimes this is because public bodies have been forced sellers. Sometimes it is because they have seen fit to ‘de-risk’ sites (read: sell them below market value) to appease developers, who have been the principal buyers of public land. Sometimes it is because discounts have been part of the very policy fabric — Right to Buy is again the best example. And sometimes it appears to have resulted from plain incompetence.
Throughout the past four decades, and especially since the global financial crisis, one of Whitehall’s principal justifications for driving the sale of public land has been to enable the private sector to build new homes on it. But it is increasingly clear that the private sector has under-delivered.
Much of the public land released to developers in recent years has not been built on but has instead simply been added to their already engorged land banks. The average number of years of housing supply sitting in the major UK housebuilders’ ‘current’ banks — those containing land that has, or is close to receiving, planning permission — doubled from around three in 2006 to around six a decade later.
Although Sir Oliver Letwin’s final report into landbanking practices was a damp squib, the letter he wrote to Philip Hammond and Sajid Javid midway through his investigations made clear the issue. When developers bank rather than build on land (including ex-public land) they do so not due to the alleged “web of commercial and industrial constraints” but because building too many homes too soon risks ‘disturbing the market price’ of housing. In other words, it hits profits.
The government bears significant responsibility. Inexcusably, it has consistently failed to impose any requirement that developers actually build houses (still less affordable ones) on land privatised specifically for that purpose.
If it is hard to see any material gains from the history of land privatisation in Britain, examples of disbenefits are hiding in plain sight. Ex-public land fills the land banks that buttress housebuilder share prices that, in turn, determine housebuilder executive remuneration. The £75 million bonus recently ‘earned’ by the former chief executive of the UK builder Persimmon must be understood is this light.
Land privatisation is also intimately linked to the declining capacity of the public sector, especially the local public sector, to continue to provide many of the basic social and environmental infrastructures that it has done historically. Such benefits include affordable housing to allotments, libraries to leisure facilities, and playgrounds to parks, all of which depend on the ready supply of land.
Short of widespread compulsory (re) purchase, which would be inordinately expensive in the absence of reform of the 1961 Land Compensation Act, it is too late to do anything about the 2 million hectares of public land that have been lost to Britain. It is not too late, however, to pause and think carefully and creatively about appropriate ownership and use of the 2 million hectares of public land that remain.
There is no reason to believe that land is always necessarily better off under public than private or community ownership. But nor should privatisation remain the default policy option that it has effectively been since the end of the 1970s.
No, the housing crisis will not be solved by building more homes