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How developers bought the Tory party The two sectors that have benefited most from land privatisation are among the Conservative Party's biggest donors

Credit: Fiona Goodall/Getty

January 15, 2019   5 mins

In 2018, Sir Oliver Letwin led a government-commissioned review into slow rates of housebuilding by UK property developers on land with planning permission, a large proportion of which in recent years has been acquired from public-sector bodies. Finally, it seemed, the Government was set to address a longstanding problem: land banking. Indeed, even the Conservative government’s own housing minister, Sajid Javid, as if pre-empting Letwin’s findings, conceded in January 2018 that there “is definitely some hoarding of land by developers”. 

But when Letwin delivered his final report in the autumn, it was a major disappointment to critics of the property sector. There was seemingly no evidence of hoarding after all. “How can anybody come up with the idea that build-out rates are not slow, and that they are not tied to the monetary return to developers?”, one exasperated observer, a Labour councillor in Leeds, demanded to know. 

If critical observers were deflated, they should not have been surprised. Vigorously lobbied and generously funded by the property sector, the Conservative Party has long shied away from meaningful confrontation with this constituency; if it has occasionally talked the talk, it has invariably declined to walk the walk.

Nowhere is this symbiotic, money-mediated relationship between the Conservatives and the property sector clearer than in regard to the ex-public land that today fills out UK developers’ land banks. Since Margaret Thatcher’s accession to power in 1979, the Tories and the property sector have been the core pillars of what the academic Philip Kivell 30 years ago described as a “coalition of interests” ranged against public landownership that also included private landowners, financial institutions, private industrialists and the growing population of homeowners. 

This coalition has in recent decades presided over a profoundly significant and undemocratic phenomenon that has been largely hidden from the public eye. On the one hand, the property sector has channelled money the Conservatives’ way, while repeatedly calling for the government to “release” more public land to the private sector. On the other hand, successive Conservative administrations have succeeded in pressuring public-sector bodies across local and central government alike to give vast amounts of their land to those developers – usually in return for monetary compensation, but sometimes literally as a gift. Public land was sold when New Labour were in power, too, but in nothing like the same volumes.

This is land that was owned by the public, but which the public at large has never consented to relinquish; indeed, it has never been asked. 

Plenty has been written and said over the years about the “revolving door” between the property sector and UK local authorities, and about how this local nexus smooths the planning process, facilitating the granting of permission for what are often deeply contentious developments. But the nexus between the property sector and central government has been equally pernicious, if not more important: the impetus (sometimes compulsion) to dispose of public land has consistently come from Whitehall. This nexus has not been properly investigated. Its workings have eluded critical commentary. 

Is money the only explanation for the zeal with which governments of the past four decades have pursued land privatisation? Almost certainly not. The trailblazers of such privatisation have believed in it, often passionately. Land, they have maintained, is simply better off in private-sector hands, where it will allegedly be managed more efficiently and – through market mechanisms – allocated more productively.  

But it is scarcely credible that money has not played a significant role. It is unlikely to be a coincidence for example that the two sectors that have long been the biggest buyers of disposed public land and that have therefore benefited most from land privatisation – the property sector and financial institutions – have also long numbered among the Conservative Party’s biggest donors, and in fact have been the very biggest two since 2015, during which time the pace of land privatisation has accelerated. ‘Follow the money’ is ever a reliable adage in the world of politics and policy. 

In 2011 it was revealed that property firms had given over £3 million to the Conservative Party over the previous three years, “including large gifts from companies seeking to develop rural land”. Developers were also paying for access to senior Tories through the Conservative Property Forum, “a club of elite donors which sets up ‘breakfast meetings’ to discuss planning and property issues”. In early 2010, the forum had met with Grant Shapps; a year later, Shapps, by this time the housing minister, launched the government’s flagship programme to release to developers by 2015 enough central government land across England to build up to 100,000 new homes.

Yes, the country has a housing shortage, and yes, the public sector owned plenty of developable land. But by Shapps’s own admission, the private sector – placed under no comparable obligation to release such land to developers – owned much more. And the idea that large swathes of public-sector land were (and are) sitting idle, being wasted, is simply a myth.

Money, it is clear, talks. 

And it carried on talking. In 2014 it was reported that a property developer that boasted of boosting its profits through land banking had donated in the region of £300,000 to the Conservative Party since 2010. Numerous comparable revelations have followed. In 2018 alone, the Conservatives received at least £1.3m in donations from individuals and companies linked to the property sector.

Part of the reason that the property sector’s lobbying of government has been so effective in precipitating the privatisation of public land is that its money has bought it a seat at the decision-making table. It has increasingly been the property sector itself that advises Whitehall on its strategy vis-à-vis public land. 

The most egregious instance of the fox being ushered into the henhouse concerns the so-called Expert Advisory Panel commissioned in February 2012 to advise the government on delivering new homes through the disposal of “surplus” public-sector sites. The person appointed as chairman of this esteemed panel was Tony Pidgley, founder and chairman of Berkeley Group Holdings, one of the UK’s largest property developers, and, needless to say, a personal Tory party donor. 

Fast forward to November of the same year and the publication of the Panel’s final report. The report contained three case study examples of “land that has previously been released from the public sector and which has successfully delivered new housing”; the Panel had “considered what lessons can be learned” from these. One, notably, was the Woodberry Down estate in London. There, in the face of community protest, some 2,000 council houses have been demolished, to be replaced eventually by over 4,000 new homes, some for “affordable” rental and some for private purchase. Crucially, upon completion, the land occupied by the private properties will be retained by the site developer. This developer, it turned out, was none other than Berkeley Group. 

How much had Berkeley paid for this land? Nothing. The local authority provided the land “at nil cost”. Little wonder perhaps that by 2014, Berkeley’s profits had surged sufficiently to pay Pidgley (by now the recipient of a CBE for “services to the housing sector”) £23.2m in cash and shares. In any event, Woodberry Down was one of the three “successful” cases from which the Panel – led by Pidgley – had learned lessons about public land disposal and proceeded to advise the Government. 

None of this should be acceptable in a professedly democratic polity. The government should not be taking advice from those with such obvious vested interests. It should have, and use, its own experts. Nor should the government be receiving donations from the same people who advise them. If money continues to pollute the politics of land in the way it currently does, we can only expect undemocratic outcomes to continue to ensue.

Brett Christophers is professor of social and economic geography at Uppsala University, Sweden. His latest book, The New Enclosure: The Appropriation of Public Land in Neoliberal Britain is published by Verso


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