Flagship ‘levelling-up’ legislation to re-invigorate disadvantaged parts of the country is attracting concerns that in reality it is a legal framework to enable the transfer of public wealth to the private sector with much of the funding being awarded to already prosperous and mostly Conservative areas.
The levelling up and regeneration bill
The levelling up bill and an accompanying development corporation reform technical consultation document, outline how the country will be divided up into large combined authorities headed by mayors who, if they prefer, can describe themselves as a ‘governor’ or ‘county commissioner’.
These combined authorities will set up mayoral development corporations (MDCs) to oversee much of the levelling-up programme. These, though technically public bodies, will abolish the limit on the number of board members, so the private sector input could be huge, and worryingly, their compulsory purchase powers will be substantially strengthened. What’s more, the Land Compensation Act 1961 will be amended to limit the ‘hope value’ for specific projects. In plain English, land can be compulsory purchased and due compensation to the original landowner can be restricted.
North Yorkshire provides a perfect example. The Tees mayor, Ben Houchen, expects that the area’s new MDC will speed up development across Middlesbrough town centre and Middlehaven. The bulk of the planning powers for the town centre will in future be in the hands of the corporation and it will be able to more easily acquire, develop, and dispose of land.
In the consultation document, concerns were raised that the establishment of this MDC could “have significant implications for Middlesbrough Council including the transfer of assets and the use of income generating powers“.
In the North East, the levelling up secretary Michael Gove has just announced an historic £1.4bn deal. Central powers concerning areas of education, transport and property development are to be devolved to a new mayoral combined authority. This new mayor (or governor etc.), to be elected in 2024, will have authority over the whole of Tyne and Wear, Northumberland and Durham.
The administrative state could thus, in theory, be transferred to the private sector who will not be accountable to what’s left of the elected government, and who will acquire significant economic leverage over the population they govern.
Freeports
In addition to living under a ‘governor’ as described above, you may find that you now live within one of the new sprawling freeports’ outer boundaries. Planning regulations will be considerably lighter-touch than in the rest of the country, environmental concerns may have little outlet, local employment conditions will be different from your neighbours’ outside these zones.
Some of these freeports are managed by DP World, owned by the government of Dubai and the owners of P&O Ferries. P&O ferries received £15mn via Rishi Sunak’s furlough payments scheme. It paid its shareholders £270mn in 2020 but went on to lay off 800 employees shortly after. They replaced this workforce by locating largely foreign labour via an international ferry management agency, paying employees between £5–6 an hour. They admitted to breaking the law to avoid union negotiations, but faced no legal penalities.
They are now set to benefit from at least £50mn of UK Freeport schemes.
20/20 vision
Imagine if you had the outrageous fortune to purchase a strategically placed property within an area designated to play a major role in this new landscape?
Some did.
In December 2020, a company belonging to Lana Fawzi Jamil Saib bought the Chunnel Industrial Estate, a stone’s throw from the land earmarked to become the Sevington inland border facility in Ashford, Kent. This was just days before the EU-UK trade and cooperation agreement was signed. Lana Saib is wife to MP Nadhim Zahawi, who yesterday was sacked as chair of the Conservative Party over his tax affairs.
The Sevington facility was purchased by the Department of Transport under a special development order in July 2020, which means the local residents had no idea and found out by reading the paper. Environmental and residential concerns were totally bypassed.
Another prophetic purchase was made by Reuben Brothers. Indian-born Iraqi billionaires involved in the countertrade of metals and raw materials with Russia in the 1980s and 1990s, the family settled in Britain and have donated huge sums of money to the Conservative Party. They were also lead investors in the launch of Metro Bank, which financed a controversial Zahawi-family property purchase in Oxfordshire in 2018.
Reuben Brothers have acquired 6.7 acres of Newcastle City centre encompassing a large part of Pilgrim Street. In October 2019 they gained approval to build a 14-storey office block on the site of the former Bank of England in this area. In November 2021 this building was selected to be the new home of the HMRC under the levelling up scheme. The building will be leased to the government and the public purse will be covering the cost of any rent paid rent to Reuben Brothers for the next 25 years at least. These Conservative Party donors will be the effective landlord of the Treasury for the next quarter century.
The NRG and the Midlands Industrial Council
Pushing this policy of massive deregulation and regeneration are two right wing pressure groups: the NRG, or Northern Research Group (NRG) and the Midlands Industrial Council (MIC). These are comprised of Conservative MPs and business owners.
The MIC is historically Eurosceptic, secretive about its membership and not keen on EU employment and health and safety laws. Their stated aims are ‘lower taxation and a minimum wage which markets can afford’.
Chaired by Conservative MP Jake Berry, the NRG are modeled on, and share much of its membership with, the 55 Tufton Street linked European Research Group (ERG).
Eclipsing elected government
Whatever the outcome of the next election, certain figures in the current administration and their financial associates may well remain at the political helm, not in Westminster, but in control of new structures and administrative bodies, as government landlords or service providers and decision makers in a new, corporatised Britain, where elected bodies have been replaced by private sector interests and over which central government has diminished control.
