Manchester is a great city that sold itself for Emirati money

The Guardian newspaper published an article by journalist Aditya Chakraborty in which he said that London is witnessing a huge silent drama this summer. Just look at the politicians and journalists, eager for excitement, and the political negotiation over who will be the next president of the Conservatives. But if you want the truth about how influence and money work in the UK today, leave Rishi Sunak and Liz Truss behind. [المتنافسان على قيادة حزب المحافظين ورئاسة الوزراء], bound for Manchester; The regenerative city that replaced textile mills with skyscrapers is now being praised by the Financial Times and George Osborne. The city that taught the world so much about industrial capitalism 200 years ago now offers another harsh lesson about financial capitalism for the 21st century.

A few minutes east of the city centre, walk from New Islington to Ancots. Built block after block of newly built or converted apartments and houses, many next to a beautiful marina that sparkles in the Tammuz sun. You can rent or buy these places for now, as long as you don’t mind that some of them look like stacked student boxes and are expensive. This is what post-industrial innovation looks like. But nearly 1,500 of these homes come from just one developer, and therein lies a serious story.

Launched in 2014, Manchester Lay was billed as a “£1bn deal” between the city council and Abu Dhabi-based owner Manchester City Football Club. The local authority has set aside parts of land for construction and Sheikh Mansour, the club’s owner, is one of the richest men on the planet. By working together, the result will be homes for the people who need them most and the money. The council’s then president, Richard Less, promised a “world-class innovation model”.

At the same time, human rights groups warned Manchester Council about its powerful new business partner. The Abu Dhabi United Group investment fund is officially separate from the state, but its owner Sheikh Mansour is the deputy prime minister of the United Arab Emirates and brother of the crown prince of Abu Dhabi.

In April, journalists in Der Spiegel published documents indicating that the Abu Dhabi state facilitated payments to Manchester City. The investment fund is at least closely related to what Amnesty International has described as “one of the most brutal police states in the Middle East”. Dissent in the UAE means rot in prison, in a system with proportionally more political prisoners than anywhere else in the world. Human Rights Watch says that low-paid migrant janitors or builders are “forced labor.” However, such facts did not prevent the leadership of the workers’ council from moving forward.

It was a major breakthrough for Sheikh Mansour who bought a struggling football club only half a decade ago, in 2008. Now his investment fund was entering into a joint venture with the British state (albeit at a local level), taking possession of prime real estate and shaping the geography of the city itself. Those of the oligarchs under Vladimir Putin who bought parts of London could never dream of such a glamorous price.

As one of the rulers of a totalitarian kingdom with a terrible reputation for oppression and addiction to oil revenue, Sheikh Mansour stood to gain a lot from this partnership. It was the council that held almost all the cards: hectares of state-owned land, the planning system and public subsidies. However, according to new research shared exclusively with the Guardian today and written by academics at the University of Sheffield, it was Sheikh Mansour who made almost all the gains. The report says nine Sheikh plots were sold at a fraction of their value, far less than what other nearby plots achieved (the council says it used independent experts using standard valuations, although it gave no further details). These lands were leased for 999 years, which is far above the norm. The fund transferred public assets to companies registered in Jersey.

Also read: A British man reveals the details of his “unfair” 19-month prison sentence in the UAE

This route along the canal from New Islington to Ancots passes through swaths of privatized land owned in an offshore tax haven, yielding millions to a key member of the wealthy elite who run a watchdog state on the other side of the world. One of the world’s largest cities has sold itself to a celebrity in brutal authoritarianism – and cheaply, too.

This is the devastating effect of the first comprehensive study of the Manchester Life scheme, the product of months of research into the company’s accounts and license applications. And the city council has sometimes been keen to criticize its critics rather than hear what they have to say: Richard Less, the council’s leader for 25 years until 2021, responded to those demanding affordable housing with “middle-class idiots and I hate them”. So let’s put aside any personal attacks: The experts have all lived in the city for decades, and I’m one of the independent, unpaid advisers on the advisory committee, and this is a report squarely in the public interest.

And in a government that is still working on how to strike some kind of balance [بين المناطق الفقيرة والغنية] Manchester is celebrated as a pioneer, Conservative administrations have praised Manchester’s Labor leadership, while Osborne has described its chief executive, Sir Howard Bernstein, as “the star of British local government”.

Bernstein ran the board for nearly two decades until 2017, and sat on the Manchester Live board. However, its success came at a high price for the poor of the city. Not only were the assets they owned sold cheaply, but they made very little money. The nine developed sites do not contain social or affordable housing, which council planners have justified with statements such as: “There is already a high level of affordable housing in the area.” The same council admitted earlier this year that nearly 4,000 city children sleep in temporary housing every night.

At the Manchester Life flats, a two-bedroom flat is a bargain at £369,000 – a price that puts it out of bounds for full-time couples on an average salary. As for the taxes, the amounts paid to the treasury seem ridiculous. One of the main subsidiaries earned more than £26m in the five years to 2021, but the researchers found it paid less than £10,000 in tax – at a rate of just four pence on every £100 of income. Manchester Live told me that its subsidiaries “pay all UK corporation or income tax on rental income and dividends”. However, it will not reveal how much tax you pay or how much income you have.

It is true that the areas of New Islington and Uncoats are much happier than they were five years ago – but the big question is who has benefited from the redevelopment and who has lost. Putting hard numbers on it is difficult when so much information about Manchester Life – a business using public assets and public support with public authority – is kept strictly confidential.

I asked the report writers to calculate how much the board could have earned from this deal. Looking at examples of land deals and other local councils, their conservative estimate is £33m, plus up to £1.7m a year in rent. Both the board and the joint venture described this amount as “speculative”. The board also said it expected more money through a surplus or profit-sharing arrangement, although it did not provide details of this agreement and it was not recorded in public records. But by comparison, £33m is more than the city pays in one year to accommodate families in temporary housing.

Presumably Sheikh Mansour knows exactly how much Manchester Life makes – and can look forward to 10 centuries of rental income from land in this great city. He seems pleased with the arrangement. A few months after Bernstein stepped down from the board, he was appointed senior strategic adviser to City Football Group, owned by Sheikh Mansour. I asked the board what procedures it followed in the subsequent appointment of Bernstein with such an important business partner, but received no response.

Perhaps Manchester Life’s most beautiful development is the Morris Mill, the conversion of one of the world’s first steam-powered textile mills into flats. It is located in the heart of Ankots, along Bengal Street. My family is originally from Bengal, a region that once wove the finest textiles in the world, and muslin is so soft that the French adored the fabric that was the East India Company’s gateway to the riches of South Asia.

To look at these names engraved on the bricks is to remember how Manchester and Britain achieved its industrial wealth and its global supremacy, from slave-picked cotton and through the destruction of foreign industrial competition, to the criminalization of the selling Indian textiles. But today it symbolizes something else: a country that celebrates its receipt of capital from other countries under the strictest terms as a victory.

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