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The Economics of Britain's Public-Housing Criminal Underworld

Britain's council estates have gone from being homes for war heroes and the dignified poor into a giant safe house for organized crime.

by Graham Johnson
Dec 11 2014, 5:30pm


​ A pop-up petrol station in the Greater London area, where cat litter is used to remove the government's tell-tale red dye. Photos by Will Fairman

This post originally appeared on VICE UK​

The going rate for the rent on a criminal-run council house (what public housing is called in the UK) is equivalent to:

  • Three grams of cocaine
  • Ninety minutes of sex in a tower block brothel, including two blow jobs and unlimited "come"
  • One-hundred-fifty liters of untaxed diesel from an illegal "pop-up" petrol station
  • One bud in a cannabis factory
  • Seven-and-a-half counterfeit Puma sneakers
  • Forty man-hours from an immigrant slave laborer
  • A re-activated gun, or 12 DIY bullets
  • A fake passport or a couple of dodgy driving licenses
  • Half of an illegal devil dog​

Each one of these various vices is worth $230. That's the weekly backhander you'll get off a local gangster if you allow him to take over your council flat to use as​ a "trap house"—an underworld retail unit used for any or all of the above. You'll have to move out and find another pad while they crack on with their graft, but that's OK, because the villains will school you in how to blag another one off the council. For example, by arranging a fake marriage breakdown or making up mental health problems.

How do I know this? For the past year, I have been making a documentary with VICE about Britain's housing crisis. In the documentary I investigate the appropriation of the nation's scarce public housing stock by multibillion-pound criminal groups, which leads to longer waiting lists for homeless families, pushing out the old and vulnerable into hostels and on to the streets. It is what one gangster, known as P, refers to as "the hidden housing market."

P is a convicted career cocaine dealer, who illegally sublets a two-bedroom flat overlooking the River Thames. "This bag of cocaine," he boasts, holding up a quarter-ounce of powder in a resealable sachet, "is worth a lot more than a family getting housed. This is my welfare. My greed for money is much more powerful than someone being homeless. I'm not being funny, but fuck them as well. Straight—I'm after my money."

That's the fundamental problem with villains: rapacious self-interest. Half-entertaining on the silver screen they may be, but they don't give a fuck about the 4.5 million people who want to put their trap houses to good use.

On the kitchen floor of P's pad, strewn amongst the borough council's Tenants Welcome Pack, is a recently executed Metropolitan Police search warrant, which, of course, failed to find P's gear. Punishment for the misuse of council property is rarely administered. The officers left empty-handed, powerless to get rid of him.

"My greed for money is much more powerful than someone being homeless. I'm not being funny, but fuck them as well."

P machine-guns his words into the camera: "The registered owner lives with his wife and they had a fake breakup, so he gets another flat by the local borough. I pay one of these, and this is the rent, a quarter of an ounce, which is worth £600 ($940)—a month's rent to sell drugs here. In this area, there are five or six flats for the same purposes, and it's the tenants who are renting the flats out."

In fact, in the concrete favelas that surround P's drug den, our investigation uncovered 23 brothels, an estimated 50 to 100 cannabis farms, three pop-up petrol stations selling illegal diesel, around ten crack houses, and a dozen or so makeshift fraud factories—compelling evidence that Britain's post-war dream council estates have gone from homes for heroes and the dignified poor into a giant safe house for organized crime. 

P agreed that there were more crime-commandeered council houses on his manor than the total number of social houses (220) built in the whole of the UK every three months. Of those, just 20 were in London, even though the capital is facing one of the worst housing shortages in the country.

Crusading for truth and justice, I visit five council house brothels within a stone's throw of P's operation, pretending to be a john and armed with a covert camera. A middle-aged Thai-Malaysian hooker who called herself M offers a range of sex services in a prefabricated 60s tower block straight out of A Clockwork Orange. She greets me at the end of a low-rise walkway, wearing a tight black top and pink pajamas. "It's £60 ($90) per half hour," is her opening line. "Take it all off and we start with a massage first."

The bright pink back bedroom in which she plies her trade is a mixture of luminescent colors, stained fabric, and bottles of curdling moisturizer. A sparkly heart is stuck to the ceiling. Multiracial porn grinds out of the telly round the clock. Filthy handwritten post-its peel off the walls, scrawled with self-help messages in green felt-tip. M pulls a bed sheet across the window, lays a towel down on the mattress, and gets the Lidl baby wipes on standby. 


​ P in one of his council properties that he runs as a cocaine dealing location 

​M's sordid menu includes all the usual: full sex, oral sex without a condom, kinky toys, and domination. A dab hand with the old strap-on, the former classroom assistant reveals how some of her customers include young lads from around the estate. Gang members and dial-a-dealers who slip into her cathouse after a shift and pay her to bum them. Homoeroticism and the underworld—that's another story, I tell her.

After admitting her sex shop is council-owned, the mother-of-one gets down to details. "I don't live here, I only work here," she says. "I left Thailand to marry a British man and it didn't work out. I owned a shop over there, now I have to put my son through university. There are no restrictions on where you can do this job. It's not like Holland where there is one street for whores. Normal people live here, and they rent only this room to me. It's good. I can stay here until four o'clock in the morning. It's not a bad area." 

M rents the rooms from the registered council tenant, a British Indian Sikh, whom I'll call PA. "I have lived here for eight years," he says. "It's not too bad living around here, but I'm moving soon."

A few months later, the block is decamped in preparation for the estate's long-awaited demolition. M and her room pimp PA are relocated to a better council house a few streets away and immediately set up shop again. Astonishingly, the couple are promised £4,000 ($6,260) in compensation by the council for the "inconvenience" of allowing their scrofulous block to be leveled and rebuilt to state-of-the-art standards at taxpayers' expense. Even so, PA is quite sniffy about his windfall. " £4,000 is not too bad. These blocks have been up since the 1960s." 

But even before he has spent the money, PA is already scheming to rinse even more dough out of the state. "I want another council flat because I want the right to buy," he whispers. "If I was to buy this flat with the discount, I would get it for about £40,000 ($62,000)." Ironically, the right-to-buy policy—the effective privatization of public housing—is often cited as the beginning of the end for Britain's once-proud estates. Around a third of the council houses in this part of London have been bought by private landlords.


​ ​

Hidden camera footage of a prostitute opening the door to the council property she works from.

​In addition, the social mix of communities was changed in the 1980s, when a policy of moving vulnerable people up the waiting lists was introduced. Working-class families were squeezed out and the urban peasantry moved in, forming ghettos of poverty-stricken unpeople, paving the way for underclass exploitation by organized crime. No surprises that both policies were the brainchild of then prime minister Margaret Thatcher. 

​When asked what the council would do if they found out he had a massage parlor in his flat, PA says, "They'd kick me out." No worries though: PA reveals how he can get off to his second home in Jalandhar, India, bragging that he can still claim his incapacity benefit while chilling out 4,000 miles away. His illegal tenant M laughs contemptuously. "The council gives these people £2,000 to £3,000 ($3,000 to $4,500) to move out. Then, when it's demolished and built again, you can move back," she says. "They're lucky. I couldn't believe it. That's why England's got no money."

I make my excuses and leave. But no matter which way I turn, there are brothels on nearly every block. They're easy to find. Instead of advertising on the net, the hookers outwit council inspectors by using ads in the windows of the local shopping center, leaving no web trail. One such tart card reads: "Honey Sexy massager ( sic)." 

​I ring the number listed and a few minutes later I'm sitting on a bed in a well-appointed council flat with a scantily-clad Ghanian woman, TR, who's wearing a low-cut see-through black negligee trimmed with shocking pink and a matching thong. TR's offer sounds familiar: "It's £60 ($90) for half an hour. You get a massage, a blow job and sex. That's it. I'll give you a good experience." 

"It's £60 for half an hour. You get a massage, a blow job and sex. That's it. I'll give you a good experience."  ​

After making more excuses, I leave for an appointment at another two-bedroom council house on a quiet estate nearby. The 24-year-old management student called J, who claims to work as a child care provider at a church-run after-school club, offered the same deal. The devout evangelical Christian says that the price for one hour was £95 ($150), which included "a blow job without condom."   

J claims she was on benefits, which she bizarrely describes as "help from the white man." Switching on a heater to warm up the bedroom, she says, "I've been in this country for five-plus years. The rent on this is £600 ($940) per month. It's from the council. The white man does help me, but I just can't rely on him. England is nice compared to other countries. This is a nice area."

J agrees that it's easy to get a council flat if you lie, and that many people get them to use as second homes and sex shops, even though there are around 12,000 households waiting for social housing in the immediate vicinity. "You want to get another flat outside your house? Yes, definitely. A lot of people do it. They apply for another council house," she nods. 

​Only one council house swindle dwarves even the vice trade. It's the faithful standard of the rackets, the cottage industry of the underworld. You've guessed it: the cannabis factory. Or "grow," as they are known these days.

​According to veteran weed farmer A-Man, there are at least three in every council block that he knows of around the barrio. A-Man, who's on the run for a violent knife attack back in his homeland, has spent three years converting his local authority flat into a highly sophisticated grow operation. With an incubator in the broom cupboard and a flowering chamber in his front bedroom, looking out on to the communal landing, it's a big operation, but he doesn't care. 

"I'm growing on hydro with 600 high-pressure [600-watt hydroponic grow lights], a cooling system ,and carbon-fiber extractor," he says. Every 13 weeks he harvests three trees, which generate £10,000 ($15,500) in income. "That's 1,500 grams, or one 'box' and a half. One kilo is £7,500 to £10,000. So every two to three months I'm trying to get £10,000 from three trees."

But A-Man is not just in it for the money. A fine wine connoisseur by day, he cares for each plant like a prize-winning orchid, sighing with pleasure as he shows off the wide-ranging varieties in his grow. "Right here, we've got OG Kush, the old one, the old school. Magma—THC and CBD [active ingredient cannabinoids] at the same time—has a nice, citrusy, lemony taste. That's the one I'm smoking. Here's Blue Cheese. Dance. Stinky. Good for the street. This one is Amnesia. This one's Super Cheese. This one's Sativa. 

A-Man is ambivalent about the plight of the family that could be sleeping in his grow room if he shut up shop and moved to a Docklands loft he can well afford.  ​

"I'm a weed connoisseur, not a weed shopper," he says. "I'm trying to look for strains that are eccentric, always chasing exclusivity. I've been doing this business for three to four years. I started from one lamp, then up to three lamps. One plant, then two plants, and so on." 

A-Man is ambivalent about the plight of the family that could be sleeping in his grow room if he shut up shop and moved to a Docklands loft he can well afford. I tell him that any one of 354,000 families on London's council waiting lists would jump at the chance. But he's quick to get street political.

"Growing cannabis is a way of taking our tax back from the system," he says. "In life, you want to share your passion. And if on the side, you make some money... I'm not on benefits. To those who say that a council flat shouldn't be used for growing weed: Every human has the right to live. If you are happy to go for a nine-to-five job, pay your taxes and keep your mouth shut—welcome. But if you're working, even if you live in a council flat, you still pay big bucks to the council." 


Baggies and scales in a council flat flat illegally appropriated by a cocaine dealer in the London area 

Though he might not appreciate his subsidized property, A-Man is prepared to defend it to the death. He explains: "I'm a recent arrival to this country, but I'm clever enough to know that an Englishman's home is his castle. You have to be ready.

"​I have got my security requirements to standard. I've got three swords, ninja stars, kunai knives, serrated gardening tools. A throwing knife, when it gets lodged into your brain, is not funny. That will scare any bad man, trust me. When you come down on someone, trust me, they are going to obey you. Everyone has got blades, this is the shank generation. The shankster. Everyone has access to a gun. We live in London. The two go together. For two or three ounces [of cannabis], I get two guns."

Close by, two prostitutes sell sex for £40 per half-hour out of a two-bedroom flat. In another flat, an African-Italian prostitute flogs it out of her dad's candlelit rear bedroom. T, who claims to be a university student, says, "Blow job with condom, massage, and sex. You can come as many times you want."

The 20-year-old part-time hair stylist opens the front door wearing multicolored leggings, a rock T-shirt and a heavy woolen cardigan. "Yes, this is my house. This is council. I don't pay for the rent, it's my dad's. I have been in the UK for six years," she says. 

​Sex sells, but the mainstay of the council estate black economy is the old-school wheeler-dealer. Meet G, who will vend you anything from a re-chipped Sky box ideal for cut-price satellite TV, counterfeit clothes by the lorry-load, and cheap diesel by the tankerful. He claims to earn between £1,250 and £2,000 ($2,000 and $3,000) per week; he defrauds housing benefit, receives tax credit (thus paying no tax), has a second house with a mortgage and a swimming pool in a posh part of London, and supports two families.

At the bottom of his garden, G demonstrates how to convert road-banned red diesel into legal-looking white fuel, which he sells below petrol-station prices. Low-tax "off-road" red diesel, which is subsidized by the government to boost food production and construction, can pretty much only be used by farm vehicles and diggers. Normal drivers can't use it, and if you're caught, your car will be seized and you'll get a nasty £500 ($780) on-the-spot fine.

That said, for years, spiv launderers have been fiddling red diesel, filtering it through chemicals or acids to remove the government marker, and flogging it from "pop-up" fuel stations, nationally a £1 billion-a-year scam. In February, the government launched the latest crackdown, introducing a hi-tech red dye, invented by the Dow Chemical Company, which they claimed could not be removed.

Within days, G had cracked the chemistry in his back yard and found a secret formula to remove the red dye—cat litter. In a roofless shed, he has patched together a U-bend plastic pipe to a rubber hose: a kind of mini DIY oil refinery, which filters the red diesel through a bag of Sanicat, the only brand which does the job, he claims.

"Look," G says, "it goes in the left side red and comes out the other side white. A big drum of red diesel takes about three hours to absorb all the dye out. I've had five pipes on this wall, so you can do hundreds of liters per day. We've also got a yard which can handle thousands of liters a week, but that's for haulage companies who want to cut their bills."

G's pop-up 24-hour garage is one of around 200 in the UK. He adds, "As the price of regular diesel hits 136p (about $2) a liters, I charge people £1 ($1.50) for my stuff. You can buy in bulk from the big tanker we've got in the back of the van. If you're running a lorry all week, that will save you £400 ($620)."

My journey into the dark heart of Britain's council house netherworld comes to an end. Nostalgically, it took me back to when I was teenager. Most Friday evenings, I would venture into Hartsbourne Heights, a high-rise effigy to the Beveridge Report in south Liverpool, decorated with pop-art tiles in pale blue and yellow. I'd hold the steel-lined lift on the eighth floor by jamming a matchstick into the button while my mate scored a deal off Thomo, a lank-haired local pot distributor, who sported a Harris Tweed jacket.

Bong fumes drifted into the hallway, along with the music and lyrics of Pink Floyd permanently on his hi-fi. One of his favorites was "The Gunner's Dream," a mournful ballad about the promises made to World War Two soldiers returning home to make better lives on the new estates, just like Hartsbourne Heights and all the ones I've visited in a quiet corner of London this year. "A place to stay/ Enough to eat/ Somewhere old heroes shuffle safely down the street." A dream, I would argue, that has turned into a bit of nightmare. 

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