Profit and Somers Town’s loss

Thursday, 29th October 2020 — By John Gulliver

Brill Place tower

Brill Place tower

IT’S probably one of the most congested areas in north London. Open space is at a premium.

Developers nibble away at every inch of land that can be built on.

It’s been a bit like that for years for Somers Town – the forgotten part of the borough.

But somehow it’s all on a different scale now as the new King’s Cross mega-city of Google, Facebook, the biomedical research Crick Institute, and now the British Library with its plans to build another great extension, looks down, as it were, on the old tired streets of Somers Town, partly neglected over the years by the local authority.

Last week we published a pained cry of protest by Slaney Devlin – she helps to run a revitalised Somers Town Neighbour­hood Forum with Diana Foster – who wrote a letter setting out with bullet-point accuracy how local residents were denied the green public spaces they are entitled to. In an angry tone, she wrote that she thought the council should consider supplying Somers Town residents with free vitamin D supplements during the pandemic.

Who cares? Well, there’s a lot of high talking sounds from the Town Hall – bang in the middle of this new mega-city, oddly enough – about the need to “green” and “renew” Camden.

A few weeks ago a new political star came on the local firmament grandly called the Renewal Commission. It is headed by council leader Georgia Gould and, quite unmistakably, one of the country’s leading economists, Professor Mariana Mazzucato of London University, whose publisher has stamped her as the kind of economist who believes in “public sector investment” by the government and, in turn, “sound” governance in the public interest.

A collection of academics, businessmen, campaigners and artists are named as members of the commission in a council press release and it looks as if they were “appointed”, not elected. Appointed by whom? That’s not clear.

Mariana Mazzucato

But markedly absent is any involvement of local Somers Town campaigners who appear to have been ignored by Town hall officials.

I have tried to arrange an interview with Professor Mazzucato as I am fascinated by her views but her PA says she is too busy to be able to talk to me at the moment. I am left hanging on a bit admittedly because I am aware that many economists – and certainly an entrenched wing of Conservative think-tanks as well as, here and there, parts of Labour thinking – are not happy with too much state intervention, if any, in the economy.

She couldn’t have made her views clearer than in a 10-minute CNN interview the other week when she praised the success of the Indian state of Kerala and Vietnam in tackling the dreaded Covid virus – all achieved, not by a “miracle”, she stressed – but by long-term public investment in public health.

Something clearly lacking here in Britain, she implied.

Then there was a remark about tax dodging developers whose investments are safely lodged in registered offices hidden away in tax havens. She referred to steps taken by one of the EU governments to extract some sort of special subsidy for the privilege of allowing them to conduct business in their territories.

Here, I thought of all the deals the council engage in with overseas developers – some of which are based in tax havens.

Cllr Georgia Gould

Of course, there’s the controversial development in Talacre Park – exposed in this column through the research of a retired forensic accountant, Nick Harding – which allowed a foreign investor to buy a piece of public land, for a giveaway price of just over £300,000. This enabled him to build a tall block of private flats – and move on after making a handsome profit of millions, all untaxed in this country.

That happened 17 years ago – and is only now coming to light through the determination of Mr Harding.

But, in Somers Town of all places, a similar business deal is taking shape with the sale of public land in Brill Place – it adjoins the shiny new Crick Institute – to an overseas investor.

Now there was a kind of “subsidy” demanded of the developers, Brill Place, who are based in the tax haven, Jersey. In return for being allowed to build a 25-storey block of flats – one of the tallest towers in central London – the overseas company agreed to spend several million on refurbishing a new school as well as providing a limited number of “affordable” flats.

In addition, it apparently agreed to make a kind of cash payment of more than £3million pounds to the Town Hall as part of what it known in planning terms as a Section 106 agreement.

So, perhaps Professor Mazzucato may believe this wasn’t such a bad deal, according to her belief that such global companies should be willing to fork out “subsidies” – but isn’t there a moral question here?

Should Labour Camden be willing to do business with overseas companies knowing that whatever profit they make from their developments none of it will be taxed in Britain?

The net profit for the Jersey-based company responsible for the tower block may well run into several million pounds –the flats in the tower block of the height and size that will soon be built in Somers Town will probably altogether fetch anything up to £40million, handing the company a very profitable return.

And not one penny of that will ever be taxed by Inland Revenue – which, in my opinion, opens up a moral question.

Related Articles