Landed Wealth in British

Kevin Cahill

[An article printed in The Guardian, 20 August, 2003 with the title "Plots of Money."
Reprinted in Land & Liberty, August-November, 2003]

Why are the richest landowners beneficiaries of huge public subsidies? asks Kevin Cahill Wednesday August 20,2003 The Guardian Who Owns Britain by Kevin Cahill is published by Canongate in paperback, priced £16.99

Who owns England and Wales? Does the government know? Does anyone know? And does it really matter if we don't know? To answer these questions, let's start at the land registry, which the two countries share. According to the lord chancellor's office: "The land registry does not possess information about the acreage of England and Wales as it creates each title without recording acreage." The land registry says it knows nothing, also, about the owners of between 35% and 50% of England and Wales, because that amount of land -- more than 13m acres in all -- is not, and has never been, recorded at the land registry. This immediately begs the question of the size of the two countries. Based on a best consensus of various figures from different government departments, England and Wales total about 37.1m acres. An acre is little larger than a football field. About 53m people inhabit those 37.1m acres, giving each of us a notional 0.7 of an acre to ourselves.

Sounds reasonable, until we examine where we live. All except around 400,000 of us live on just 2.2m acres -- about 6% of the total land area, maybe a little more. In that urban plot we live at a high density, with between eight and 10 homes crammed together per acre, soon to rise to 12. At 10 dwellings per acre, that's about 44 of us per acre.

But what of the other 34.9m acres? That divides as follows: about 27m acres are agricultural and are owned by just 134,000 families. At about four persons per family that works out at one person for each 50 acres. The remaining acreage -- about 7.9m -- is mountain, bog, waste, and large variants in government statistics. Excluding the rented portions of the agricultural estate, since most are rented from the 134,000 landowning families, ownership in the agricultural sector confers several benefits as well as lots of space. First, agricultural land is not taxed. It is subsidised in England and Wales, tax breaks included, to the extent of between £3bn and £5bn a year, more if there is a BSE or foot and mouth outbreak. This means that each of the landowning families receive an average of between £22,300 and £37,300 a year from the taxpayer. Meanwhile, back in the crowded urban sector, from whence comes most of this tax largesse, each family pays what amounts to a land tax: the council tax, averaging at £620 a year and yielding the Treasury some £10bn annually. That's for the ownership of a tenth of an acre. But the public subsidy to the rural sector is even more generous than it looks. Among the 134,000 landowners of England and Wales, there are 26,000 who own more than 350 acres and are worth more than £lm each. The exchequer gives these millionaire families a yearly handout from the state for sitting on uneconomic assets -- if they were economic they would not need to be subsidised.

Taken on averages, the concentration of ownership in the rural area does not look too bad, after all it is agricultural. In practice, there is a huge distortion in the distribution of farmland ownership, putting a serious squeeze on small farmers, and absorbing vast amounts of the subsidy.

In England and Wales there are almost 5,000 owned farms with an average size of 1,290 acres, each worth some £4m, and each receiving between £143,000 and £238,000 a year. A further 21,200 farms of an average size of 400 acres, each get between £44,400 and £74,000 a year. This is the highest concentration of its kind anywhere in the EU. And this distortion becomes extraordinary when the really big landowners are taken into account.

The Prince of Wales owns the Duchy of Cornwall, with 141,000 acres in west England, entitling him to at least one of the £lm-plus grants made via the subsidy. But the prince is not the biggest owner. The Crown Estate, of which his mother as Queen is freeholder, runs to almost 400,000 acres. The Duke of Westminster, the richest person in the whole of the UK, owns around 190,000 acres in Britain, with perhaps more than 500,000 acres in Canada and Australia.

Two issues arise. The first is access: the urban hordes are by and large not welcomed on English or Welsh land. The second is housing: the deputy prime minister, John Prescott, is proposing to squash the new housing programme on to mainly brownfield sites at 20 dwellings per acre.

Christine Whitehead, professor of housing at the London School of Economics, recently provided forecasts for the Joseph Rowntree Foundation, suggesting that an extra l.lm homes are needed by 2022. This drew howls of protest from the rural lobby, sitting in their 27m acres of subsidised tranquillity. But were the whole of the projected requirement of housing to be taken out of rural England and Wales, the 27m acres would reduce, over 20 years, by a mere 100,000 acres.

In England and Wales there is not merely near stasis in relation to the land asset but there is a huge subsidy going into keeping it static. The Irish do not have a council tax, something that would become possible in Britain if the subsidy to uneconomic land was ended. The Irish also recently benefited from 10 years of double digit economic growth, thanks ultimately to earlier land redistribution.

Perhaps it's time for the chancellor, Gordon Brown, to switch the subsidy back to those who pay it and end council tax, and with a small bonfire of some planning rules, to get at least enough of our land into economic use to provide the coming generations with something better than Prescott's "little boxes".