At yacht parties in Cannes, councils have been selling our homes from under us

Property developers wining and dining town hall executives - it’s a jaunt so lavish as to be almost comic

• 
• • Aditya Chakrabortty
  • The Guardian, Tuesday 14 October 2014

The Mpim conference in Cannes has been wining and dining town hall executives for 25 years with intentions on the national silver. Photograph: Jean-Paul Pelissier/Reuters

Starting this Wednesday, 4,000 men (and, yes, they’ll mainly be men) will gather in a giant hall in London. Among them will be major property developers, billionaire investors and officials of your local council or one nearby. And what they’ll discuss will be the sale of public real estate, prime land already owned by you and me, to the private sector. The marketing people brand this a property trade show, but let’s drop the euphemisms and call it the sales fair to flog off Britain.

For the past 25 years, this conference – Mipim for short – has been held in Cannes. It’s a jaunt so lavish as to be almost comic – where big money developers invite town hall executives for secret discussions aboard private yachts, and whose regulars boast that they get through more champagne than all the liggers at the film festival.

Suitably oiled-up, local officials open talks with multinational developers to sell council housing estates and other sites. All this networking is so lucrative for the builders that they even fly over council staff. Last year, Australia’s Lend Lease paid for Southwark’s boss, Peter John, to attend Cannes. This is the same Lend Lease to which Southwark sold the giant Heygate estate at a knockdown price: 1,100 council flats in inner London to be demolished and replaced with 2,500 units, of which only 79 will be for “social rent”.

Events such as Mipim raise the flag on the land grab that eventually leads to thousands of people being kicked out of their homes – and in many cases out of London. It is a forum that relies on invitation-only lunches, secret talks and the public being kept well away. In a shamefully undemocratic development system, this is one of the most untransparent forums of the lot.

You might think that seven years after the collapse of an economic system built on property speculation and amid a historic housing crisis, Mipim would have no place in the UK. You’d be wrong. When it opens this week it will be to a welcome address from that loveable friend of big money, Boris Johnson. Even with 344,000 households in London awaiting a council home, the mayor is cheering on their flogging off and replacement with unaffordable luxury flats. Joining him will be Conservative ministers, senior civil servants and council delegations from Glasgow through Leeds and Liverpool and down to Croydon.

Many of these councils are coming because they have no other means of raising serious cash: three decades after Thatcher’s rate caps, and four years into the most painful cuts faced by local government, they are flat broke. Some council leaders will admit as much privately. But in all cases, the strong scent of neediness comes off their planned Mipim session titles (“Croydon: the economic powerhouse of the south-east”) – and forces them into the kind of rotten deals that jeopardise the livelihoods of their residents.

On Sunday afternoon, a group of about 40 Londoners convened in a Pimlico community centre. A greater contrast with the hangars of Mipim can hardly be imagined: no lavish buffet, just a kettle and some instant coffee; no PowerPoint slides but a dungareed bloke scribbling on a flipchart. But the people here knew about the property fest: they live on the council estates about to be demolished to make way for private developers. They reeled off where they were from: Chelsea, Elephant and Castle, Haringey, Barnet. Some had already been handed their court orders and were unsure if they’d even be in London next month. One woman, who had bought her Southwark council flat as Thatcher and Blair encouraged her to, had been offered a risible sum to get out. As the group planned meetings and demonstrations before Christmas, she kept repeating: “I might be homeless by then.” The first couple of times, she even managed to smile.

These people live in public housing built with public money on public land. And soon, their homes will be someone else’s speculative asset. The British Property Federation (BPF) published a report last year which showed that of London’s newly built homes, only 39% were bought to live in. The vast majority – 61% – were taken by investors. After the meeting broke up, a resident of Churchill Gardens in Pimlico walked me around her estate and pointed out the old people’s home and lovely modernist low-rise block that was earmarked for the wrecking ball. It faced out on to the Thames; on the other side was Battersea power station, being turned by Malaysian investors into luxury flats. In this part of London, that same BPF report found, 49% of new-build homes were bought by overseas investors.

Against that backdrop even the smallest victory looks historic. Up on the northwestern perimeter of London, in West Hendon, other council residents are fighting the borough of Barnet over the redevelopment of their estate on terms that suit the developer, Barratt Developments, not locals. Just under 700 homes are to be smashed up to make way for 2,000 new units. Just under 1,500 will be sold privately: the rest will be “affordable”, which in the doublespeak of housing means unaffordable.

The council cannot say how many social-rental homes will be provided, but it is clear that whatever provision there is will be grudging. With a quick Google you’ll find a video of the chair of Barnet’s housing committee, Tom Davey, claiming that his council is providing affordable housing because people are buying them. An objector points out that only the wealthy can afford them and the young Conservative thumps the desk and says: “Those are the people we want.”

Whatever the propaganda, when I turn up at West Hendon, I meet a telecoms worker and a full-time carer. I also meet a woman in her 60s who hasn’t had a good night’s sleep in years, and a man facing homelessness and suffering depression.

About a third of the estate’s residents have already been bounced from regeneration to regeneration. They have no idea where they’ll go when they’re moved out. Others are leaseholders who can’t afford to buy anywhere in London on the £165,000 offered by the council. The majority of the tenants will be moved to what was formerly a car park, surrounded by busy roads.

“A giant traffic island” is how it is described by Jasmin Parsons, who’s lived on the estate for over 30 years. From there, she and her neighbours can look at their old homes, which are now off-limits to them and their children. Their faces won’t fit the area, you see, and their bank balances certainly don’t go far enough. They’ll be barely tolerated trespassers on yet another private development.

Maybe there’s a metaphor in there for all of us.

Property, theft and how we must breach this sacred line

The 'private good, public bad' madness sees a bedroom tax foisted on the poor while the rich amass vast property wealth

• 
• • George Monbiot
  • The Guardian, Monday 25 March 2013 20.30 GMT

'By focusing on income rather than property we have gravely underestimated the extent of inequality.' Illustration: Daniel Pudles for the Guardian

On Easter Monday, in the wake of a festival of resurrection and redemption, between 600,000 and 900,000 households will either have to move out of their homes or have their benefits cut. The reason is that they are deemed to be under-occupying their property: in other words they have one or more spare rooms. The bedroom tax will hit some of the poorest people in Britain.

Two years ago I proposed something similar. Nearly 8 million homes in England, I found, had two or more spare bedrooms. But only 11% of this under-occupation was in public or social housing. The rapid growth in half-empty homes, according to the government"is entirely due to a large increase within the owner-occupied sector".

Because of the desperate shortage of housing, especially for larger families, I suggested a bedroom tax for owner-occupiers. It was a much gentler measure than next week's tax, as it would apply only to those with at least two spare rooms and would affect only those most able to pay.

The response was an explosion of fury in the rightwing press and blogosphere: the places where the current bedroom tax finds its only supporters. In the Telegraph, Ed West remarked that my idea was "far closer to fascism than the ethno-centric populism of the European radical Right … The state has no business in people's bedrooms – ever." I am still waiting for Ed to denounce the state's intrusion into the bedrooms of the poor.

The difference, of course, is that because housing benefit is paid by the government, the government is deemed to possess the right to withdraw it. But much of the wealth of private householders has also been provided by the state. The value of our homes, for example, has been greatly enhanced by the infrastructure and public services the state provides. Yet the proposal to reclaim some of this unearned wealth through a land value tax is angrily dismissed by the party promoting a bedroom tax for the poor.

Similarly, every year taxpayers in this country spend £3.6bn on farm subsidies. We could by now have bought all the farmland in Britain several times over. But this money has earned us no property rights: farmers still feel entitled to announce at public meetings that "it's my land and I will do what I want with it". Most of the land in this country, if you go back far enough, was seized from other people – often, in the case of the commons, from entire communities. Much of the law we abide by today was drafted to formalise these seizures.

There is a sacred line that divides the world into public and private property. The line is arbitrary and moves every year: ever further across the public realm. But it is policed religiously. As soon as you can bundle the public wealth you've snatched over the line and into the hallowed ground of the private sector, you can claim sanctuary.

Among the Russian government's backers are oligarchs who were enriched by acquiring government assets at a fraction of their value. Their political alliances have ensured that their wealth is neither questioned nor reclaimed by the government. But when the government of Cyprus plans to acquire some of the assets stashed by tax-avoiding oligarchs, the Russian prime minister denounces it as "stealing".

When the threshold is crossed, everything changes. Money spent in the private sector is deemed by politicians and the media to be a good thing. Money spent in the public sector is deemed a bad thing, even though (or perhaps because) it is more effective at distributing wealth. If you are on the right side of the line, the government will deregulate your business. If you are on the wrong side of the line (schools and hospitals, for example), it will subject you to ever more draconian regulation, with cruel and unusual punishments for the slightest resistance to its crazy targets and intrusive inspections.

Gagging clauses in NHS employment contracts are rightly denounced by ministers. But what of the gagging clauses deployed by banks or oil companies or insurance firms, which shield their malpractice from public scrutiny? Where in the media or in government have you heard a call for those to be removed? And why should freedom of information laws stop at the fence marked "private: keep out"? Why, for example, should we not have the right to know what the banks are cooking up?

Take a look at the astonishing chart of property wealth published by the New Economics Foundation and you get an inkling of why attempts to challenge the concentration of private property are denounced as fascism. The graph, using government statistics, suggests that the average property wealth of the top 1% of households is £15m. "The 1% are worth more than the bottom 99% put together." By focusing on income rather than property we have gravely underestimated the extent of inequality.

All this is blasphemy: a trespass into the holy shrine, which has been sanctified by a thousand speeches and editorials. But there is nothing inherently sacred about the veil of the temple that divides the two realms; nothing, as Easter approaches, that must forbid it from being rent in twain.

Borussia Dortmund boss attacks Premier League's oligarch owners

 

• Chief executive says English game is losing its soul
• Germany's cheap tickets and standing areas show the way

• David Conn in Dortmund
• The Guardian, Sunday 2 December 2012 21.00 GMT

Borussia Dortmund's chief executive, Hans-Joachim Watzke, says that links between fans and clubs in Germany are now stronger than they are in England. Photograph: Gary Calton for the Guardian

 

The chief executive of Borussia Dortmund, who play Manchester City in the Champions League on Tuesday, has launched a passionate defence of German football principles and attacked English clubs' ownership by rich men from overseas.

Hans-Joachim Watzke described German football as "romantic" for retaining its "50% plus one" rule, which requires Bundesliga clubs to be owned by their members. He questioned the ethos and sustainability of Premier League clubs' ownership, including City being owned and funded by Sheikh Mansour of Abu Dhabi.

Of City, a club he visited for last month's 1-1 draw in the first match between the two, Watzke said: "I am a little bit romantic, and that is not romantic. In England people seem not to be interested in this – at Liverpool they are fine for the club to belong to an American. But the German is romantic: when there is a club, he wants to have the feeling it is my club, not the club of Qatar or Abu Dhabi."

Watzke was a prominent supporter of the 50% plus one rule when it was challenged last year by Martin Kind, the president of Hannover. Dortmund are floated on the stock market, but the members elect the president and four members of the club's supervisory board – and also vote to decide major issues of club policy.

"I was the biggest opponent of changing the rule," Watzke said in an interview with the Guardian at Dortmund's Signal Iduna stadium in the build-up to the City match. "Germans want to have that sense of belonging. When you give [the supporters] the feeling that they are your customers, you have lost. In Germany, we want everybody to feel it is their club, and that is really important."

All 36 Bundesliga clubs are owned or controlled by their members, except the historic exceptions of Wolfsburg, owned by Volkswagen, Bayer Leverkeusen, owned by the pharmacy giant Bayer, and Hoffenheim, which is now funded by a single very wealthy entrepreneur, Dietmar Hopp.

Apart from those three and Kind's Hannover, the remaining 32 voted to keep the 50% plus one rule, which was introduced in 2001 when the Bundesliga clubs broke away to run the league competition independently from the German Football Association, the DFB.

"In former times in England I think the relationship between the club and supporters was very strong," Watzke argued. "Our people come to the stadium like they are going to their family. Here, the supporters say: it's ours, it's my club."

Watzke, himself a lifelong supporter of Dortmund, who drew 1-1 with runaway Bundesliga leaders Bayern Munich on Saturday, linked the system of member-ownership and control to the maintenance of affordable tickets and standing areas at top flight German football.

At Dortmund, the 25,000 fans who form the famous "Yellow Wall" standing area in the Signal Iduna stadium's south stand pay just €190 (£154) for a season ticket for the 17 home Bundesliga matches. Season tickets that also include entry to the first three Champions League group games cost slightly more at €220, working out at exactly €11 for each match.

"Here, it is our way to have cheap tickets, so young people can come," Watzke said. "We would make €5m more a season if we had seats, but there was no question to do it, because it is our culture. In England it is a lot more expensive. Football is more than a business."

Watzke argued that Dortmund, who top the group of City, Real Madrid and Ajax while the English champions cannot qualify for the knockout stages, have been able to compete with such clubs thanks to sensible management, coaching and player recruitment, despite not having the resources of a rich individual such as Sheikh Mansour backing the club.

"Everybody told me you cannot play in the Champions League against clubs like Manchester, they have more money. But we are trying to do it ourselves, in our way.

"There are a lot of ways to Rome," he said. "Chelsea have won the Champions League. But Chelsea's question is: what happens after [Roman] Abramovich?"

Why can anyone shovel cash into the UK without any enquiry into its provenance?

Mary Dejevsky in the Independent.

Today is the day when English justice delivers its verdict on the oligarchs. After seven months spent poring over the evidence, Mrs Justice Gloster returns to London's Commercial Court to hand down her judgment in the case of Berezovsky v Abramovich – Boris Berezovsky being a one-time Kremlin adviser now in exile in Britain; Roman Abramovich being the owner of Chelsea Football Club. Berezovsky claimed Abramovich cheated him in a share deal, and demanded £3bn in damages. Abramovich said he did nothing of the kind.

The huge sums of money, the intricacy of the arguments, and the ever-shifting political context in which the disputed events took place, all make this a landmark case. But there will be many Britons, myself shamefacedly included, who have already given up and pronounced a plague on both their houses. Whoever wins – and having sat in the courtroom a couple of days, I admit to flailing hopelessly in the rights and wrongs of it – here are two men of a certain age and uncertain wealth seeking to settle old scores through the British courts. Which of them emerges victorious troubles me very little.

It may be that one can afford to lose more than the other, and I would hazard who that might be. But each exploited the turmoil of immediate post-Soviet Russia to his own – considerable – advantage. Acumen came into it, but so – I suspect – did bluff, acquired street wisdom and not a little chance. Whether one behaved honourably and one less so, I would hesitate to wager, but the likelihood is of at least 50 shades of grey.

Corruption was endemic in the Soviet Union; it is endemic in Russia today. In between, there was corruption plus chaos. The times were brutal, and I almost doubt that it is worth raking over old coals in any court at all. Let any aggrieved oligarchs fight it out, in the old-fashioned way, and let the cannier, more ruthless man win. If there is blood on the floor, or the doors, or the car bumper, so be it.

The trouble is that Berezovsky v Abramovich, and the parade of other oligarchs resorting to the London courts, says something not just about a very particular period in Russia (which is now gone), but also about Britain today. And I do care about that, as should the UK Government and the country at large. If Russians cannot get it together to run an honest state, then that reflects at least in part their state of development and their chequered history.

It is no good for us to try to impose our civic standards on them, as various do-gooding NGOs have long tried to do. If there is no domestic power or consensus to sustain change, no improvement will last. A quorum of Russians has to demand a less corrupt state, and there are signs – in recent protests and the rise of internet exposés – that they will.

No doubt that is why Berezovsky and his compatriots have petitioned the English courts to rule on events that have only the most tangential connection with this country – a meeting here, a hotel room there. In a way, that shows a flattering confidence in British justice and a distressing lack of faith in Russia's own. But has the arrival of so much Russian money in Britain, with high-profile members of its privilegentsia not far behind, really been an untrammelled good, or even neutral in its effects?

Someone who believes it has a downside is Alexei Navalny, the frontman for Russia's populist anti-corruption campaign. He has speculated that, while much of the Russian money oiling the wheels of London society is honestly acquired, some of it – obviously – is not. And he asked the question that we Britons should have been asking for a decade or more. Why is it so easy for someone with no obvious ties to Britain to set up shop here and shovel in the cash without any enquiries being made into its provenance? The image of a Russian paying for a Mayfair flat with a suitcase of cash became almost a cliché of the late 1990s. But why did we laugh it off, rather than ask how that could be acceptable or even legal?

Navalny notes that all a rich, or even modestly well-off, Russian had to do – if he chose not to invest £2m in a business to acquire a resident's visa – was to buy a flat, produce his ID and a utility bill, and lo he could set up a bank account and start transferring his billions. In his book, the process was too easy. In my book, as a Briton, opening and operating a bank account and transferring money across borders is too difficult. The very same procedures – the address, the ID, the utility bill – that make it so simple for a foreigner to import his ill-gotten gains cause endless hassles for us natives. Plus the UK bank must declare to the taxman outgoing transfers above a certain amount – but not those coming in.

You can only laugh really about error-prone ID checks that cause us untold delays in the name of preventing money-laundering, yet give foreign shysters a fast-track to legitimacy – so long, that is, that any actual fraud has not been committed here. As HSBC's admitted involvement in Mexican drug money-laundering showed, you have to be a big fish not to get caught in the anti-corruption safety net of a British bank.

It is not just Russians, of course, who feed dirty money into Britain. But it is their millions that have had some of the most obviously pernicious consequences. At the less harmful end are those flats paid for in cash and all the "bling"; at the opposite extreme are some mysterious killings and attempted killings. In between is the court time taken up by internal Russian squabbles – how many homegrown cases have to wait? – and the damaging effect on diplomatic relations of the UK's generous political asylum policy towards economic, if not criminal, exiles.

It might be said that every country gets the emigrés it deserves. In being more interested in the money than how it was acquired, we have brought many of these difficulties upon ourselves. But they are not ours alone. We can fulminate against corruption in Russia as we like, but unless the UK does more to stop dubious Russian money coming to London, we need to recognise that our own greed and regulatory laxness have also played their part.