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While You Were Sleeping

June 14, 2011

Never let it be said that this is not a populist blog. After a brief spat with the BBC, I am deeply repentant. I know what the nation wants and I plan to give it to you. So, without further ado, let me inform you of what is going on in the news.

Kate Middleton went somewhere. In an outfit. Airbus is building a transparent plane – just like Wonder Woman’s. Prince Philip, that paragon of virtue and progressive thinking, has celebrated a birthday. Kate Middleton attended. In an outfit. Psychic Sally Morgan has told Katie Price that Leandro is “the one”. Finally, David Cameron re-re-launched something. I missed it, but I will try to catch it when he re-re-re-launches it again on BBC Parliament +1week.

Good. Now that we’re done with real news, a lighter item to cheer you up. Many of you may have missed this heart-rending story of public/private collaboration, buried as it was under more shocking items about five-year-old documents that revealed that – shock! horror! – labour politicians are ambitious.

The Government is selling off £10bn worth of public land. Well… not exactly selling it. “Releasing” it, was the word used by Housing Minister Grant Shapps. They are giving the land to private investors and developers on “Build Now, Pay Later” deals. Actually, “Sell First, Pay Later” would be a more accurate description.

“I can confirm an ambitious challenge across Government to release enough land from Whitehall’s grip for 100,000 new homes across the country.” Like a baby Peregrine chick, nurtured but eventually released into the wild. Out of the insane ‘grip’ of Whitehall idiots who may have thought that, at a time when we are being told again and again that we are nearly bankrupt, giving away the nation’s assets for free may be a bad idea.

Still, needs must. There is a housing shortage at the moment. Presumably this land will be transformed into affordable housing. Let me scan the press release again. Nope. No mention of affordable housing. Never mind. I am certain, absolutely certain, that New Covent Garden Market (one such site released from civil servants’ maniacal “grip”), right by the river, Zone 1, overlooking the Houses of Parliament, will not be turned into luxury apartments.

I take comfort in the fact that Danny Alexander, who has a proven track record of constraining the Tories in their dogmatic, market-obssessed agenda as a valiant and outspoken LibDem partner, has said: “This is a double dose of good news, creating and sustaining thousands of jobs by boosting housebuilders while also creating thousands of new homes for people to live in.”

Everyone clear? The giving away of public assets to private companies is not just good news. It is a double dose thereof.

And if you cynical lot needed more convincing, then listen to what Mark Clare, Chief Executive of Barratt Developments PLC, said: “This is a big step in the right direction. The rapid release of publicly owned land has the potential to be an effective catalyst for increasing the supply of land for new homes in this country during the next few years.” This is the same Barratt Homes that were criticised 18 months ago by the Commission on Architecture and The Built Environment as leading the trend in building homes which are too small for human occupation. With partners like this, how can we fail?

So, let me ask the obvious and perhaps stupid question: If we, as a nation, are strapped for cash and there is a housing shortage and we own all this land and there is profit to be made out of building houses on it and jobs in the construction industry to be created, why the Dickens doesn’t the state do it? The denial of such opportunities and the handing over of public assets for a pittance is not only reminiscent but also symptomatic of a Thatcherite ethos at work. We have already sold the “family silver” and are now in the process of selling the “family land”, but are still refusing to regulate the financial sector. What will we sell next time their greed brings about an economic Armageddon?

But not to worry. In charge of the whole operation is none other than Captain of Industry and regular Mother Theresa, Francis Maude. Apparently, Francis “will go through each department’s plans with a fine tooth comb, to make sure every possible site is made available for housebuilding”. Which translates into: if it isn’t nailed down, it is for sale – no, not sale. That would imply some consideration in exchange. It will be “released”.

I guess, in the final analysis, it will all be worth it, if it works. But is it working? Well, this is what Robert Chote, Chairman of the Office for Budget Responsibility said in the closing remarks of his speech at the University of York, yesterday (13/6):

“The budget deficit has barely fallen from its post war high, the economy is still struggling for momentum, there is significant uncertainty about our medium‐term growth prospects, and there is considerable disagreement about the appropriate path of fiscal policy. But it is not for us to complain.”

Nor is it for me or you to complain.

And now back to our regular programme with news that Kate Middleton watched a Polo match. In another outfit. Sleep well.


											
18 Comments leave one →
  1. June 14, 2011 2:35 pm

    Nice article. I’m amazed that the government haven’t guaranteed, that a certain percentage of the properties built on this land, will be affordable housing. At least 33-50% would seem reasonable. However, when you say ‘why doesn’t the state do it?’ you answer your question in the first part of the sentence, because ‘we as a nation are trapped for cash’.

  2. Simon permalink
    June 14, 2011 2:53 pm

    If we wanted to we could do it ourselves (we being the state), and treat it as an ‘investment.’ We could chose to borrow specifically at public sector borrowing rates (i.e better than commercial), build the houses, sell them on at market rate (as a minimum base case that is, leaving aside any affordable housing element) and still be quids in when we have paid back the loan. Perhaps a little simplistic, but don’t forget we would also get tax back through the employment of the builders and companies used to build the said houses, thereby achieving a proper ‘double dose’ of good news.

    Following on from this theme, I’d be really interested to know how the books would look if we took all spending on education, infrastructure and anything else that would add to the growth of country out of the equation and treated them as separate investments which will have a return greater than the initial outlay. Would our income (i.e. taxes) cover our outlay (public sector salaries to deliver services, benefits and other wealth transfer item and all similar cost items)?

    I recall reading in an economic text book that certainly a few years ago, if you did this to the American budget, they would not be in deficit. I’ll try and dig it out as it is an interesting and potentially valuable way to approach the process of national accounts. It stemmed from the idea that lots of businesses would take out a loan to cover capital investment and this would stand outside the usual income / expenditure accounts in terms of judging how healthy a company was doing. I’ll come back and comment if I find it later.

    S

  3. June 14, 2011 2:54 pm

    If you’re referring to Libya, then that conflict will ultimately cost a lot less than it would to build 100,000 affordable houses. If you’re referring to Afghanistan, then I assume that the Coalition would have already factored that conflict into their spending plans.

    • June 14, 2011 3:03 pm

      It may cost less, but it will not yield assets at the other end.

      • June 14, 2011 3:07 pm

        True, but it did prevent thousands of people being massacred in Misrata.

      • June 14, 2011 3:26 pm

        If that were the reason we went to war, we’d be done by now.

  4. African Sunset permalink
    June 14, 2011 2:56 pm

    We can always find money to fight…

    It won’t happen, ‘Call me Dave’ will do another U-Turn when the masses find out. Honestly, can someone tell me of a privatisation where the service or product improved, generated more competition and everyone (other than the shareholders) thought it was a good idea?

    • June 14, 2011 3:02 pm

      Yes, but the masses need to find out! We seem to be mesmerised by nonsense.

  5. June 14, 2011 4:38 pm

    Wow, I wonder why Grant Shapps – who previously took tens of thousands of pounds in donations from people inside the property industry including Charcol, Edeus Creators, Douglas & Gordon, the Sapcote Group and Goldsmith Williams * – would be involved in such a generous deal…

    * http://www.guardian.co.uk/politics/2008/may/16/conservatives

  6. June 14, 2011 5:38 pm

    Just so you know, the Department of Health says that England’s hospitals are worth £24bn.

    For no reason at all, I thought you might like to know that.

  7. cynicalHighlander permalink
    June 14, 2011 9:14 pm

    It’s purely a peaceful way of transferring a countries assets into the the hands of the greedy bankers and should be stopped as no democratic government should have that freedom.
    EU: Politics financialized, economies privatized

    Where has Citizen Smith gone?

  8. June 14, 2011 9:44 pm

    The ‘masses’ have always been mesmerised by nonsense called political claptrap and I for one am heartily fed up to my back teeth with the patronising bull that politicians, towing their propagandist party line, continue to churn out to the public. We live in a age of social media; can’t we get into some serious ‘trending’ on Twitter to simplify the translation of this deceit, at least to start with..?

    Aside: has anyone in Whitehall tried to put a value on a human life yet?

  9. June 15, 2011 4:19 am

    Good post – I am grateful to you for bringing this issue to my attention.

  10. June 15, 2011 7:17 pm

    erm isnt that a small amount ,the lands important though thought youd head 4 summit worth 10 billion to apply your talents 2, like tax evasion all 170 billion quids worth

  11. June 30, 2011 9:34 pm

    Sorry, I can’t quite swallow what you are selling. I have spent two months in Greece every year for a number of years now and see how that society functions compared to Canada and Germany. The number one problem is and will always be tax evasion which is so ingrained in the Greek psyche and will not change. When only 15,000 people admit to earning more than $130,000 a year you know you have issues. How are the buying all those expensive cars and yachts? It is said that you get the government you derseve. If the Greek people keep voting for the same two parties over an over, well what can I say. As an aside, when you borrow money either as a country or personally to finance a certain lifestyle it must be paid back or you declare bankruptcy. Those are your choices. I too know and love people there who have had their pensions cut or wages reduced and I feel for them. I as a tourist have refused the services of both a doctor and a dentist that wanted cash and it behooves Greeks to do likewise. If people stopped paying bribes maybe things can change.

  12. katrin permalink
    July 2, 2011 8:20 am

    Im with you all the time, but most people in my country (czech republic) believe official sources. They say that greece people are lazy. Its because everybody is scared and believe that agreeing with rich causes, that they spare us, which is so stupid thinking.. I look up to yours courage.

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