Property Moguls Are Giving Money to the Conservatives
Exploring the rotten relationship between Tories and the people getting rich off the housing crisis.
Richard Harrington MP, who set up a meeting of Britain's richest oligarchs, telling them to oppose the mansion tax by giving money to the Conservatives (Photo by Simon Childs)
The phrase “housing crisis” is now firmly entrenched in the political lexicon. And – unlike "quantitative easing", "rivers of blood" and "I agree with Nick" – it doesn't look it's going away any time soon. As such, politicians of all stripes have started making promises about how they're going to solve the problem if they're voted in at the next general election. But the super-rich property barons of the UK have their own plan, and it sure as fuck doesn't involve getting poorer any time soon. To this end, they've devised numerous methods to keep the government in line and the line on house price graphs surging ever skywards.
One of the main threats to their money at the moment is the prospect of a mansion tax – a tax on homes worth over £2 million, which has been proposed by both Labour and the Lib Dems. The words "mansion tax" sound appealing; it's a phrase clearly designed to appeal to those who like the idea of clobbering old rich people who have a spare floor to turn into a house for their chocolate Labrador. And yet Boris Johnson thinks that this is bullshit, saying, "Labour and the Lib Dems would have you believe that the people they want to hit are oligarchs and international bankers. But the overwhelming majority of victims would be Britons who find themselves living in a house that has nudged over the threshold."
Perhaps he’s right, and a fair few grandparents who have owned houses in Notting Hill since before it was rich would end up getting hit. That said, oligarchs and international bankers are definitely taking an interest in fighting the mansion tax. Last November, Tory MP for Watford, Richard Harrington teamed up with Trevor Abrahamsohn, who is an estate agent to the mega-rich. Together, they gathered “65 of the richest people in the UK – including Russian oligarchs and multi-millionaires from the Middle East” – at a West End restaurant to launch a campaign against the mansion tax, Harrington duly urging the millionaires to “donate to the Conservatives” to kill it.
Abrahamsohn’s own estate agency firm is called Glentree, and it donated £12,000 to the Conservatives in 2013. According to the latest return from the Electoral Commission, another pair of donors were Bruce Ritchie and his wife Shadi Ritchie. Just before Christmas, they each gave £47,500. Bruce Ritchie began building his £200 million-plus fortune with his "London Repossessions List", selling off repossessed houses during the 80s recession. He currently runs property firm Residential Land, which specialises in high-end lettings in London. Whether the Ritchies made their £95,000 donation because of the Anti-Mansion Tax campaign, I don't know. Certainly they made their donation after the campaign started. I called Residential Land to ask, but the company didn't reply.
The good thing about giving money to the Conservatives is that while you get to help them stay in power at the next election, by paying for poster campaigns and leaflets, you also get a chance to shoot the shit with them in the here and now. The Conservatives encourage hefty donations through access to their "donor clubs”. For a mere £25,000 you can join the “Treasurers Group”, who get to meet “senior figures” – usually assumed to include Chancellor George Osborne. The Prime Minister, on the other hand, won't sell his time so cheap. You'll have to stump up £50,000 if you want to be “invited to join David Cameron and other senior figures from the Conservative Party at dinners, drinks receptions” and other events.
The new Battersea Power Station development, where an apartment costs £30 million
What if you don’t want to pay large sums of money to hang out with politicians? You may find it more appealing to hire an ex-politician to work for you, rather than a current one to make small talk with.
Lord Strathclyde – full name the Right Honourable Galloway Dunlop du Roy de Blicquy Galbraith, which is in itself a better joke than I could ever hope to conceive of – was until, January 2013, one of Cameron’s more senior cabinet ministers. Strathclyde was Cameron’s leader in the House of Lords, and had been on the Tory front bench for 25 years, as a minister and opposition spokesman. He left to “take up other threads of my life”, such as his business career.
And so in June 2013 he became a "Senior Adviser" to the Battersea Power Station Development Company. This Malaysian-owned development company is turning the iconic London power station into mostly luxury flats. The first flats went on sale for £30 million – in other words, more than you will ever earn in your whole life. In May, the company sold £500 million worth of flats in the development within a matter of days. The cheapest properties were studio flats at £800,000 each. Only a very small number of “affordable homes” will be built, and the first won’t appear until “phase three” of the development some years in the future. Even the Express called Lord Strathclyde’s development a “ghetto for the rich”, attracting the international jetset and “keeping local buyers out”.
Strathclyde’s company’s brochures say, “These are homes unlike any in London – indeed, in the world. Inspired by, and often actually created from, the fabric of the Power Station, they will resonate with its distinctive spirit of bravura innovation offering larger than average unit sizes and high specification interiors. We sum up that spirit in our invitation to ‘Live Original’.”
This year's sales drive was launched with an “inaugural annual party” where, according to the firm, “Elton John dazzled the crowd with a thunderous set” with “Veuve Clicquot and Fiji Water supplying the drinks”, and a galaxy of stars in attendance.
Rob Tincknell, the man in charge of the Battersea Power Station development (Photo via)
Hilariously, the party didn't turn out as planned, as it was sabotaged by a pair of peregrine falcons. The protected birds were nesting in the power station's scaffolding. It was feared that the volume of Elton John's performance would scare them away from their eggs, so developer Rob Tincknell spent £300,000 replanning the party, afraid that he'd face jail if he freaked the birds out. The guests, such as Chris Evans and Jack Whitehall, were forced to listen to Sir Elton through headphones. So, at least the development is sympathetic to some local residents, if not the 4,000 households on the local council house waiting list.
The Battersea Power Station developers put big money into having a presence at last year's party conferences. Just before the last election David Cameron gave a speech warning that “corporate lobbying” was “the next big scandal waiting to happen”. Cameron said that “the ex-ministers and ex-advisors for hire, helping big business find the right way to get its way” were central to this “scandal”. It struck me that Lord Strathclyde's relationship with the Battersea Power Station developers sounded uncannily similar to the scandal that Dave had warned against. When I put that to them, they told me that, “We do not ask Lord Strathclyde to intervene directly on our behalf with Ministers.”
Then I got in touch with Lord Strathclyde himself. "Isn’t it inevitable," I asked, "that if former ministers like yourself end up working in the luxury property business, government policy will be geared towards housing for the rich? Do you think your party has a business interest in being against mansion taxes, but no interest in low-rent, low-cost accommodation?" Not one to shirk a difficult question, he told me – via his PA – that: “post-ministerial appointments have been approved by the Advisory Committee on Business Appointments. They are also fully declared in the Register of Members Interests in the House of Lords."
If you’re not satisfied with a former politician, you may want to hire a current one. Such as Banbury MP Sir Tony Baldry, who has been a member of Parliament for over 30 years and was once a personal assistant to Mrs Thatcher. Baldry has taken a new part-time job for £60,000 a year – almost as much as his MP’s salary – as an “Associate Director” of Werner Capital. This firm offers a “real estate advisory service” to “ultra high net worth individuals”. In other words, it helps rich people buy expensive houses. Baldry’s employer is keen on what they call “prime or improving locations we know well, such as London, and that have significant capital appreciation potential, including United Kingdom”. They promise “a turn-key solution for all phases of real estate transactions, manage developments and property assets and advise on disposals”.
When I phoned Tony up to ask whether his job conflicted with his other job as an MP, he said, “I have been in the House of Commons for over 30 years, and with the exception of the eight years when I was a minister, I have always had outside interests. So there would be absolutely no scintilla of a doubt on this matter, at the last general election I made it very clear on my election address that I had outside interests and would continue to maintain outside interests if I were re-elected to parliament.” I wasn’t sure whether or not having always had conflicts of interest made things any better.
With so many Conservatives – be they former cabinet members or current MPs – finding different ways of getting money out of the people who get rich off the property market, it's not surprising that so little is being done to make sure there are enough homes that normal people can actually afford to live in.
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