In January 2020 Robert Jenrick, Secretary of State for Housing, Communities and Local Government, fast-tracked approval for a controversial housing development in East London in exchange for a bung to the Conservative Party. His actions deprived the local council of millions of pounds earmarked for community infrastructure. Jenrick was forced to rescind the approval in May, ostensibly to avoid any ‘perception of bias’. In June, Labour tabled a motion forcing all communications between Jenrick and the developer of the Westferry Printworks project, billionaire media tycoon and former purveyor of topshelf pornography Richard Desmond, to be made public. The whole sleazy saga exemplifies the unholy alliance between government and the bedrock of British capitalism that is the property sector.
On 15 January 2020, the planning application for a £1bn 1,524-unit housing development on the Isle of Dogs was rushed through by Jenrick just 24 hours before Desmond’s property company, Northern and Shell, would have become liable for a £40m Community Infrastructure Levy to Tower Hamlets council. The council had repeatedly refused planning permission on the basis that the 15-acre scheme did not include an adequate percentage of ‘affordable’ housing. Jenrick, it emerged, had sat with Desmond, Northern and Shell directors and senior figures from construction partners Mace at a £900-a-head Conservative Party fundraising jamboree in November 2019, at which he was shown a promotional video for the project on Desmond’s phone. The next day, Desmond texted Jenrick to finalise plans for a personal visit to the site. Jenrick demurred, texting back that it might be better not to ‘give the appearance of being influenced’ so soon before a general election. So on 13 December, the day after the Conservative landslide, Desmond again contacted Jenrick: ‘Fantastic day!’ he texted, and suggested Jenrick visit the following week. The same day, Jenrick instructed staff that the Westferry application was to be prioritised and he would handle it himself. Desmond stressed that approval was needed before 16 January, to avoid paying the council millions of pounds. He added: ‘We don’t want to give the Marxists loads of doe [sic] for nothing’. Tower Hamlets has the highest level of child poverty in the country. Two weeks later, Desmond donated a rather miserly £12,000 to the Conservative Party.
Where there’s brass, there’s muck
Robert Jenrick
Rather than sack Jenrick, Prime Minister Boris Johson declared the matter ‘closed’. We should not be surprised: Johnson himself, as Mayor of London, in 2014 signed off on the £1bn development of the former Mount Pleasant mail sorting office, against local council objections and despite it containing almost no affordable housing. Royal Mail made a profit of £164m on the sale. In 2016, Johnson ruled that developers David and Simon Reuben – the second richest family in Britain – need not pay any of a £57m contribution for affordable housing in their development of Millbank Tower (Guardian 28 June 2020); soon after the Reuben brothers made a £50,000 donation to the Conservative Party. In January another major developer, Delancey, made a £100,000 donation, having met Johnson or his deputy Sir Edward Lister several times between 2014 and 2019 to discuss Delancey’s bid to develop the East London Olympic Village in partnership with a Qatari firm and its plans to redevelop Elephant and Castle shopping centre in south London. And so it goes on. In 2011, the Telegraph reported that over the previous three years the Conservative Party had received £3.3m from property developers who stood to benefit from Conservative planning reforms. Many senior MPs – including the former Chancellor Philip Hammond and former Foreign Secretary Jeremy Hunt – are themselves keen property speculators. Others act as consultants to property companies, or are significant landowners in their own right.
This cosy relationship is not confined to the Conservative government. Local authorities, including Labour-run councils, are complicit in helping property developers maintain their profit margins. For example, in 2017, the Australian giant Lendlease raked in £70m from its 37-storey development ‘One the Elephant’, having persuaded Southwark Labour council it could not viably provide ‘affordable’ housing of any description on the site. The same year Lendlease paid for then Southwark leader Peter John to attend the MIPIM property trade show in Cannes, shelling out £1,250 for his trip, before buying up the council’s Heygate estate for just £50m with a loss of more than a thousand council homes.
The priority for developers and housebuilders in Britain is to sustain guaranteed profits of at least 20% – higher than most other parts of the economy. Local authority planning obligations, especially those for ‘affordable’ (ie below market price) accommodation, building regulations and sustainability demands constitute a drain on profits. There is a whole industry devoted to helping developers use ‘viability studies’ to avoid such obligations. They are helped by a well-oiled ‘revolving door’ between the property sector and government at both national and local level. Last year a Guardian investigation revealed that almost one in ten local councillors in London work for property companies or have received gifts or hospitality from them.
This rotten symbiosis is the inevitable result of what the housing commentator Bob Colenutt has called ‘the finance-property complex’ – the ever-close merger between City of London finance and property, with international capital pouring into land as a long-term and highly profitable investment. The British Property Federation estimates the market value of the country’s real estate at £1,662bn, representing 21% of total net wealth and contributing £101.2bn to the economy – 7% of GDP. No wonder the ruling class will sweep aside all constraints on the sector’s profitability. Land and property are the go-to repository for international corporations, banks, pension funds and insurance companies. The housebuilding sector is enshrined within the City of London. This merger between finance capital and land ownership is at the core of British capitalism.
Far from sacking Jenrick, Johnson has given him the green light for more deregulation, opening up a bonanza for developers and housebuilders that will only bring more housing misery for the working class. Plans include the creation of special development zones, in which private developers will play an expanded role. Jenrick has promised to ‘speed up and simplify this country’s overly bureaucratic planning process’ – taking away even the limited constraints imposed by local authority planners. So-called ‘Project Speed’ will expand ‘permitted development rights’, hastening the conversion of office blocks into cramped, poor quality homes and fuelling the rise of a new slum tenure for the poorest sections of the working class.
Cat Wiener
