The poorest taxpayers are subsidising the richest people in Europe: and this spending will remain uncut until at least 2020.
What would you do with £245? Would you a. use it to buy food for the next five weeks?, b. put it towards a family holiday?, c. use it to double your annual savings?, or d. give it to the Duke of Westminster?
Let me make the case for option d. This year he was plunged into relative poverty. Relative, that is, to the three parvenus who have displaced him from the top of the UK rich list(1). (Admittedly he’s not so badly off in absolute terms: the value of his properties rose last year, to £7bn). He’s the highest ranked of the British-born people on the list, and we surely have a patriotic duty to keep him there. And he’s a splendid example of British enterprise, being enterprising enough to have inherited his land and income from his father.
Well there must be a reason, mustn’t there? Why else would households be paying this money – equivalent to five weeks’ average spending on food and almost their average annual savings (£296)(2) – to some of the richest men and women in the UK? Why else would this 21st Century tithe, this back-to-front Robin Hood tax, be levied?
I’m talking about the payments we make to Big Farmer through the Common Agricultural Policy. They swallow €55bn (£47bn) a year, or 43% of the European budget(3). Despite the spending crisis raging through Europe, the policy remains intact. Worse, governments intend to sustain this level of spending throughout the next budget period, from 2014-2020(4).
Of all perverse public spending in the rich nations, farm subsidies must be among the most regressive. In the European Union you are paid according to the size of your lands: the greater the area, the more you get. Except in Spain, nowhere is the subsidy system more injust than in the United Kingdom. According to Kevin Cahill, author of Who Owns Britain, 69% of the land here is owned by 0.6% of the population(5). It is this group which takes the major pay-outs. The entire budget, according to the government’s database, is shared between just 16,000 people or businesses(6)*. Let me give you some examples, beginning with a few old friends.
As chairman of Northern Rock, Matt Ridley oversaw the first run on a British bank since 1878, and helped precipitate the economic crisis which has impoverished so many. This champion of free market economics and his family received £205,000 from the taxpayer last year for owning their appropriately-named Blagdon Estate(7). That falls a little shy of the public beneficence extended to Prince Bandar, the Saudi Arabian fixer at the centre of the Al-Yamamah corruption scandal. In 2007 the Guardian discovered that he had received a payment of up to £1bn from the weapons manufacturer BAE(8). He used his hard-earned wealth to buy the Glympton Estate in Oxfordshire(9). For this public service we pay him £270,000 a year(10). Much obliged to you guv’nor, I’m sure.
But it’s the true captains of British enterprise – the aristocrats and the utility companies, equally deserving of their good fortune – who really clean up. The Duke of Devonshire gets £390,000(11), the Duke of Buucleuch £405,000(12), the Earl of Plymouth £560,000(13), the Earl of Moray £770,000(14), the Duke of Westminster £820,000(15). The Vestey family takes £1.2m(16). You’ll be pleased to hear that the previous owner of their Thurlow estate, Edmund Vestey, who died in 2008, managed his tax affairs so efficiently that in one year his businesses paid just £10. Asked to comment on his contribution to the public good, he explained, “we’re all tax dodgers, aren’t we?”(17).
British households, who try so hard to keep the water companies in the style to which they’re accustomed, have been blessed with another means of supporting this deserving cause. Yorkshire water takes £290,000 in farm subsidies, Welsh Water £330,000, Severn Trent, £650,000, United Utilities, £1.3m. Serco, one of the largest recipients of another form of corporate welfare – the private finance initiative – gets a further £2m for owning farmland(18).
Among the top blaggers are some voluntary bodies. The RSPB gets £4.8m, the National Trust £8m, the various wildlife trusts a total of £8.5m(19). I don’t have a problem with these bodies receiving public money. I do have a problem with their receipt of public money through a channel as undemocratic and unaccountable as this. I have an even bigger problem with their use of money with these strings attached. For the past year, while researching my book about rewilding, I’ve been puzzling over why these bodies fetishise degraded farmland ecosystems and are so reluctant to allow their estates to revert to nature. Now it seems obvious. To receive these subsidies, you must farm the land(20).
As for the biggest beneficiary, it is shrouded in mystery. It’s a company based in France called Syral UK Ltd. Its website describes it as a producer of industrial starch, alcohol and proteins, but says nothing about owning or farming any land(21). Yet it receives £18.7m from the taxpayer. It has not yet answered my questions about how this has happened, but my guess is that the money might take the form of export subsidies: the kind of payments which have done so much to damage the livelihoods of poor farmers in the developing world.
In one respect the government of this country has got it right. It has lobbied the European Commission, so far unsuccessfully, for “a very substantial cut to the CAP budget”(22). But hold the enthusiasm. It has also demanded that the EC drop the only sensible proposal in the draft now being negotiated by member states: that there should be a limit to the amount that a landowner can receive(23). Our government warns that capping the payments “would impede consolidation” of landholdings(24). It seems that 0.6% of the population owning 69% of the land isn’t inequitable enough.
If subsidies have any remaining purpose it is surely to protect the smallest, most vulnerable farmers. The UK government’s proposals would ensure that the budget continues to be hogged by the biggest landlords. As for payments for protecting the environment, this looks to me like the option you’re left with when you refuse to regulate. The rest of us don’t get paid for not mugging old ladies. Why should farmers be paid for not trashing the biosphere? Why should they not be legally bound to protect it, as other businesses are?
In the midst of economic crisis, European governments intend to keep the ultra-rich in vintage port and racehorses at least until 2020. While inflicting the harshest of free market economics upon everyone else, they will oblige us to support a parasitic class of tax avoiders and hedgerow-grubbers, who engorge themselves on the benefactions of the poor.
*UPDATE: It’s just dawned on me that the government’s list must be incomplete. It says it covers all “legal persons”, but it seems that legal persons excludes actual persons, as opposed to companies, partnerships, trusts etc. It would be fascinating to discover whose subsidies have not being listed.
References:
1. http://www.therichest.org/nation/sunday-times-rich-list-2011/
2. The average UK household contribution to the CAP is £245 (DEFRA, by email). Average household weekly expenditure on food and drink is £52.20. Average household weekly savings and investments is £5.70.
Office of National Statistics, 2010. Family Spending 2010 Edition. Table A1: Components of Household Expenditure 2009. http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-225698
3. DEFRA, by email.
4. European Commission, 19th October 2011. Regulation Establishing Rules for Direct Payments to Farmers Under Support Schemes Within the Framework of the Common Agricultural Policy. COM(2011) 625 final/2 2011/0280 (COD). http://ec.europa.eu/agriculture/cap-post-2013/legal-proposals/com625/625_en.pdf
5. I wanted to go to source on this, but the copies available online are amazingly expensive (there’s an irony here, but I can’t quite put my finger on it). So I’ve relied on a report of the contents of his book: http://www.newstatesman.com/society/2010/10/land-tax-labour-britain
6. The database is here: http://www.cap-payments.defra.gov.uk/Download.aspx DEFRA’s database search facility isn’t working – http://www.cap-payments.defra.gov.uk/Search.aspx – so you’ll have to go through the spreadsheets yourself.
7. The entry in the database is for Blagdon Farming Ltd. I checked online: this is one of the properties of the Blagdon Estate. http://www.blagdonestate.co.uk/theblagdonhomefarm.htm , http://www.192.com/atoz/business/newcastle-upon-tyne-ne13/farming-mixed/blagdon-farming-ltd/292e5a6d3883fe2f4a207c94d6c41e61747a8b50/ml/ and http://www.misterwhat.co.uk/company/384132-blagdon-farming-ltd-newcastle-upon-tyne
8. http://www.guardian.co.uk/world/2007/jun/07/bae1
http://www.guardian.co.uk/world/2007/jun/09/bae.foreignpolicy
9. http://www.guardian.co.uk/baefiles/page/0,,2095831,00.html
10. The payment is listed as Glympton Farms Ltd. I rang them – they confirmed that Glympton Farms belongs to the estate.
11. Listed as Chatsworth Settlement Trustees. This page identifies the owners: http://www.boltonabbey.com/welcome_trustees.htm
12. Listed as Buccleuch Estates Ltd
13. Listed as Earl of Plymouth Estates Ltd.
14. Listed as Moray Estates Development Co.
15. Listed as Grosvenor Farms Limited. See http://www.grosvenorestate.com/Business/Grosvenor+Farms.htm
16. Listed as Thurlow Estate Farms Ltd. See http://www.telegraph.co.uk/news/obituaries/1570710/Edmund-Vestey.html and http://www.independent.co.uk/news/uk/home-news/fat-cats-benefit-from-eu-farming-subsidies-780192.html
17. http://www.guardian.co.uk/business/2008/dec/07/edmund-vestey-tax-will
18. All these utility companies are listed under their own names.
19. I stopped adding the wildlife trust payments shortly after getting down to the £100,000 level, so it is probably a little more than this.
20. The CAP’s Good Agricultural and Environmental Condition rules (an Orwellian term if ever there was one) forbid what they disparagingly call “land abandonment”.
21. http://www.tereos-syral.com/web/syral_web.nsf/Home/index.htm
22. DEFRA, January 2011. UK response to the Commission communication and consultation:
“The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future”. http://archive.defra.gov.uk/foodfarm/policy/capreform/documents/110128-uk-cap-response.pdf
23. European Commission, 19th October 2011, as above.
24. DEFRA, January 2011, as above.
By George Monbiot. Published in the Guardian 29th November 2011.
28 November 2011