Most people know about how, since the 1980s, Britain’s former nationalised industries and utilities have been sold off on the cheap to profit-hungry speculators. British Steel, British Gas and British Rail were just a few of the many industries and services that were thrown to the City of London sharks. But less is known about the largest privatisation of all: that of Britain’s publicly owned land.
Since 1979, when Margaret Thatcher came to power, approximately 2 million hectares of land have been sold off. This amounts to half of the formerly publicly-owned stock of land, which once accounted for 20% of Britain.
Nobody knows exactly how much this land was worth, but the government values the remaining 10% of land still publicly-owned at £420bn. In reality, the 10% already sold would have been worth much more, as the most valuable sites have been favoured for sale.
In total, the value of privatised land therefore dwarfs that of any other privatisation in British history. To put this in perspective, British Gas was sold for £5.4bn, British Steel for £2.5bn, and British Airways for £900m. Even the state’s £24bn stake in the bailed-out Royal Bank of Scotland - set to be the most valuable privatised asset when handed back to the market in 2019 - pales in comparison with the overall sale of public land.
That so much land has been privatised is a case of death by ten thousands of cuts. Nobody knows how many individual plots of land have been sold by the 1,000-or-so different public bodies that own land in Britain. The figure is at least in the tens of thousands. More than 10,000 local authority-owned school playing fields have be sold off alone! Everything has been sold, from former local authority car parks, to Forestry Commission-owned woodlands.
The government cites solving the housing crisis as one of the main reasons for the sell off. Since Thatcher implemented the “Right to Buy” in 1980, local authorities have been forced to use the proceeds of any sales to pay off debts, rather than re-invest in building new homes. Hence the building of new council housing since then has all but collapsed.
Instead, the building of new homes has been left to the “efficiency” of the market. In reality this means the efficiency of massive property development companies to channel billions in profits to their shareholders.
When investment is dictated by profit and nothing else, of course these companies will favour the building of luxury homes. At the same time, it is in their interest to keep the supply of affordable housing low, in order to keep prices high.
Despite the property tycoons praising the wonders of the market, a little intervention by their friends in government doesn’t go amiss. Hence local authorities and government bodies have been forced to sell off some of their most valuable land to developers, often at a discount. In many cases the sales are not even forced, but are actively encouraged by rotten councillors.
For example, the large Heygate estate in Southwark, London, which contained 1,200 council flats, was sold to developer Lend Lease for “re-generation”. The site was sold for only £50m, despite the land previously being valued at £150m.
The council went to extraordinary lengths to facilitate this loss, having spent £44m to evict their tenants, and £21.5m on planning the “re-development”. Lend Lease then built 2,469 homes on the site, of which only 82 are offered at “social rents”. The average price of a new flat on the estate is between £790,000 to £1.5 million. As a result, Lend Lease is estimated to have pocketed at least £200m in profits.
Similar scandals are to be found all over the country: expropriation of working-class homes, so as to “re-generate” developers’ balance sheets.
With funding cut to the bone since 2010, cash strapped local authorities have desperately sought to plug budget deficits by selling off valuable land (aka. “dipping into reserves”). Yet since developers are not obliged to actually build on land purchased from public authorities, much of this land has simply been “banked”. This is where land is left undeveloped, in order to keep the supply of homes short.
As a result, Britain’s 10 biggest housebuilders have increased the amount of land they own with planning permission by a fifth over the last decade – enough to build almost 400,000 homes. Yet according to the Campaign to Protect Rural England, the number of homes built by the same companies fell by 13% during the same period.
Such is the severity of the housing crisis, that according to housing charity Shelter, one in 200 people in Britain are officially homeless.
It’s not bad for everyone though. In 2017, the top 20 house-building companies in Britain alone made a combined profit of £6 billion, following their fifth year of growth. Whilst millions struggle to pay their rent, the CEO at developer Persimmon raked in a £75m bonus last year, making him the highest paid boss in Britain.
Nationalise the land!
The only beneficiaries to this privatisation of land have been the shareholders of the big building companies and their bosses. It is clear that this land sell-off must not just be stopped - it must be reversed!
The housing crisis in Britain could be easily solved if the long-term empty properties were expropriated and allocated on the basis of need. The Right to Buy must be ended. The large house building companies, along with their gigantic landbanks, must be nationalised and put under democratic workers control.
If combined with nationalisation of the banks and other construction companies, a massive programme of council-house building could be implemented, with genuinely affordable rents.