Starmer's Big Lie: Every "Investment" Announcement Is Britain Being Sold to the Epstein Class
The Investment Lie: How Britain Is Selling Its Future to Pay Its Rent & That Includes Our Wildlife
Every few months, the prime minister or minister steps
up to a podium and announces, with great fanfare, that billions of pounds of
“investment” are flowing into Britain. Into communities. Into nature. Into
housing. Into our future. The numbers are always impressive. The press releases
are always confident. The backdrops are always carefully chosen: a construction
site, a wind farm, a rewilded hillside, a smiling family outside a new home.
And it is, almost entirely, a lie.
Not a lie in the technical sense that the money does not
exist, or that nothing will be built. Something will indeed be built. Some
trees will be planted. Some houses will go up. Some wetlands will be restored.
The lie is in the word “investment” itself, and in the silence about who ends
up owning what, and on what terms the rest of us get to use it.
What Investment Actually Means
Investment, in the honest economic sense, means deploying
capital to create productive capacity that generates returns through
production, value added, goods made, services rendered. A factory is an
investment. A skilled workforce is an investment. A new drug that cures a
disease is an investment. These things create wealth by combining labour and
resources to produce something that did not previously exist.
What the British government keeps announcing is something
quite different. It is the purchase of assets, by private parties, which those
private parties then rent back to us. It is the acquisition of land, housing,
infrastructure and natural resources by funds and firms, which then extract a
stream of income from the people who depend on those assets to live and work.
This is not investment. It is rent-seeking. And the two
things are, in the deepest economic sense, opposites.
The Scottish Nature Deal: A Perfect Illustration
This week brought a sharp and instructive example. The
Guardian has revealed that a deal to raise £100 million from private investors
for urgent nature restoration in Scotland has collapsed. Aberdeen, the
investment firm, quietly withdrew from its partnership with NatureScot late
last year. Scottish government ministers did not tell parliament. When a Labour
MSP asked for an update, the SNP agriculture minister responded only that
NatureScot “continues to engage with a range of investors.” The collapse was concealed,
apparently to spare embarrassment ahead of an election.
This was not some minor administrative hiccup. The
programme, originally unveiled in 2023 with promises of generating up to £2
billion in private financing for native tree planting and peatland restoration,
was the flagship model for how Scotland’s environmental targets would be
delivered. The model was simple: nature would be restored, but the costs and
ownership would sit with private capital, which would earn returns through
carbon credits, biodiversity credits, and the sale of ecosystem services.
In other words: the land, the trees, the peat, the carbon
they sequester, the credits those generate, would be controlled by private
funds. The public would pay for the access, the offsets, the credits, through
higher costs passed on by the businesses buying them, or through a government
that spends public money purchasing those credits to meet its own net zero
targets. Nature would be restored, yes. But nature, in a very real sense, would
no longer belong to us.
Nature finance expert Tom Gegg, formerly of Palladium,
estimated a £6.6 billion gap between public funding and restoration costs by
2040. He argued that UK state-owned investment banks should simply take over,
noting plainly that growing trees is a slow way to make money, and that private
capital will always prefer faster returns. Laurie Macfarlane of Future Economy
Scotland added that the lack of transparency surrounding the collapse is deeply
concerning, since there is now no credible plan for how net zero targets will
be delivered.
But the story of the collapse is less important than the
story of the model. Because the nature deal is not an aberration. It is a
template. It is how the British state, across both Conservative and Labour
governments, now plans to fund almost everything.
And it is failing for a reason that no minister will say out
loud. These so-called investors are not primarily interested in trees or
peatland or net zero targets. They are interested in land values. The return
they are banking on is not the slow drip of carbon credits from a hillside
plantation. It is the capital gain from owning land in a market they expect to
keep rising. Plant some trees, call it carbon capture, hold the asset, sell at
a profit. That is the model.
The problem is that the model has hit a wall. Britain has
been in an 18-year land value cycle, the rhythm that has driven every boom and
bust in the economy since the enclosures, and the evidence of the last few
months suggests we have reached the peak. Land values are turning. When they
fall, as they now will, the arithmetic of private nature finance collapses
entirely. No fund is going to lock up capital on a Scottish hillside for thirty
years of modest carbon credits when the underlying asset is losing value. The
deals will not just slow down. They will fall away. And the politicians who
built their entire environmental strategy on the assumption that private
capital would keep pouring in will have nothing left but the announcements they
already made and the targets they can no longer meet.
The Pattern Behind the Announcements
Look at what has been announced as “investment” in Britain
in recent years. Billions in private financing for housing, leveraged through
Homes England’s National Housing Bank, which will use guarantees, debt, equity
and what its own December 2025 roadmap describes as being positioned “in the
capital stack” to attract over £50 billion of additional private investment.
Hundreds of millions for green infrastructure, structured through carbon and
biodiversity markets where private funds own the underlying assets. Private
finance initiatives for schools, hospitals, roads and railways where the state
pays rent on its own infrastructure for thirty years or more. Build-to-rent
schemes where institutional investors own entire housing estates and the
families living in them pay rent for life, building no equity, accumulating no
asset.
Every one of these is announced as investment. Every one of
them is, in practice, the transfer of an asset or a future income stream to a
private fund, in exchange for upfront capital that allows the government to
point at something built and claim credit.
The private credit market in Britain grew from nothing in
2013 to £59.5 billion by 2024. Private equity, shadow banking and alternative
investment vehicles have expanded at extraordinary speed. These are not
productive enterprises. They are, in the main, vehicles for owning assets and
extracting income from them.
And the assets they are buying, with the enthusiastic
facilitation of the British state, are the foundations of ordinary life. Land.
Homes. Infrastructure. Nature. The things that people need to live, and from
which they can therefore be charged indefinitely.
The Shift from Production to Extraction
Britain’s economic decline over the past four decades is not
simply a story of deindustrialisation. It is a story of a deliberate and
systematic shift from an economy that makes things to an economy that owns
things and charges people to use them.
The political economy of this transition is not complicated.
It was, from the perspective of those with capital, entirely rational. If you
own a factory, your returns depend on what the factory produces, on the skill
of the workers, on competition, on innovation, on customers wanting what you
make. You can lose. You have to keep investing in the productive process.
If you own land, or housing, or an essential piece of
infrastructure, your returns depend on people needing to live and move and
work. You cannot lose, or at least not in the same way. Demand is captive. The
people cannot choose not to live somewhere. They cannot choose not to commute.
They cannot choose not to breathe. So the rent just keeps coming.
As successive governments opened up land and housing to
financialisation, cut credit controls, encouraged buy-to-let, failed to build
enough homes, privatised utilities and infrastructure, and replaced grants with
privately financed initiatives, capital migrated rationally from production to
extraction. Britain now has a financial sector that is among the largest in the
world, and a manufacturing sector that has shrunk to a fraction of what it was.
It has rising rents, stagnant wages, crumbling public services, and a housing
crisis that is now generational.
The people who made these choices were not stupid. They
were, from a narrow class perspective, very effective. The owners of assets
have seen extraordinary wealth gains. The value of land and housing in Britain
has increased by multiples in real terms since the 1980s. That increase
represents an enormous transfer of wealth from the young, the poor and the
productive to the old, the wealthy and the extractive.
And now the children of that extraction face a Britain in
which they cannot afford to buy a home, cannot afford the rent on a home, work
in a country with weak productivity growth, and are asked to service debts
accumulated in their name to fund public services that used to be funded from a
productive tax base, but are now starved because the economy that would fund
them has been hollowed out.
We are, not to put too fine a point on it, eating our own
children. We are consuming their future to sustain the income streams of the
rent-seekers who bought the present.
The Foreign Shadow Banking Dimension
There is a specific and underreported dimension to all of
this that deserves naming directly. A significant and growing proportion of the
“private investment” that British politicians celebrate is not British. It is
foreign institutional capital, often structured through shadow banking
vehicles, often domiciled in low-tax jurisdictions, often operating through
layers of holding companies that make it difficult to trace where the money
ultimately flows.
The Gulf sovereign wealth funds that own large parts of
Britain’s infrastructure. The American private equity firms that own chains of
care homes, dental practices and GP surgeries. The Canadian pension funds that
own ports, airports and toll roads. The German and Dutch institutional
investors that own swathes of rental housing. These are not investors in
Britain in any meaningful economic sense. They are owners of Britain’s
productive assets, charging Britain’s citizens to use them.
The returns flow out of Britain, to foreign pension holders,
foreign sovereign wealth funds, foreign shareholders. The ownership of the
assets stays abroad, behind legal structures that minimise UK tax liability.
And the British state, desperate for upfront capital to fund things it no
longer has the tax base to fund directly, keeps facilitating the process, keeps
announcing it as investment, keeps insisting it is good for growth.
It is not good for growth. It is good for the income
statements of foreign asset managers. It is very bad for the long-term
productive capacity of Britain.
What Economic Rent Is, and Why It Matters
To understand why this is so destructive, it helps to
understand the concept of economic rent, which has nothing to do with the rent
you pay your landlord in the ordinary sense, though it is related.
Economic rent, in the classical sense, is the income that
accrues to the owner of a factor of production not because of anything the
owner has done, but because of the scarcity or monopoly quality of the factor
itself. Land is the clearest example. A piece of land in the centre of a
thriving city is valuable not because the landowner built the city, trained the
workers, created the businesses or installed the infrastructure. It is valuable
because of everything that surrounds it: the collective product of generations
of human activity, public investment, social organisation and economic
development.
The landowner did not create that value. They captured it.
The income they extract from it is economic rent: a return on monopoly position
rather than productive contribution.
Adam Smith understood this. David Ricardo built his theory
of political economy around it. John Stuart Mill proposed taxing it. Henry
George made it the centrepiece of his famous argument in Progress and Poverty,
one of the bestselling books of the nineteenth century: that as economies grow
and populations expand, land rents rise, and the owners of land capture an
ever-growing share of the wealth produced by society, leaving less and less for
the workers and entrepreneurs who actually generate it.
The same logic applies to all monopoly-adjacent assets. The
companies that own essential infrastructure, the funds that own large blocks of
rental housing, the firms that control access to nature’s carbon sequestration
services: all of them extract economic rent in this sense. They capture value
created by others, by public investment, by collective effort, by the simple
fact of scarcity, and convert it into private income.
The economic case against this is not sentimental. As Joseph
Stiglitz has argued, a well-designed tax on land values improves the use of
land and redirects investment towards productive, non-rent-seeking activities.
Milton Friedman, no friend of heavy taxation, called the tax on unimproved land
values the “least bad tax,” because unlike taxes on income or production, it
does not reduce economic activity. You cannot produce less land by taxing its
value. You can only induce those who hold it unproductively to either develop
it or sell it.
The deeper point, made forcefully by a recent paper in the
Oxford Review of Economic Policy drawing on Joseph Stiglitz’s work, is that
land speculation and rent-seeking actively crowd out productive investment.
When capital flows into land and asset ownership rather than into factories,
technologies and skills, the economy grows more slowly, wages stagnate, and
future generations are left worse off. Higher taxes on land rent, with proceeds
redistributed to workers or invested in productive public capital, raise the
long-run growth rate. This is not ideology. It is the mainstream conclusion of
serious economic analysis.
Why a Nature Conservationist Is Writing This
You may wonder what any of this has to do with wildlife,
rewilding, or the health of Britain’s ecosystems. The answer is: everything.
Nature does not need saving by the Epstein class. It needs
the people destroying it to be charged properly for doing so.
Think about what actually drives nature loss in Britain. It
is intensive farming on marginal land that would revert to scrub and woodland
the moment the economic pressure to farm it was removed. It is the sprawl of
development onto greenfield land held speculatively for years, released only
when the landowner judges the moment profitable. It is pollution: the nitrogen
runoff, the sewage, the pesticide drift, all of which impose enormous costs on
rivers, soils and air that are currently borne by no one, certainly not by
those responsible. It is the draining of peatlands to make marginal grazing
land viable, destroying some of the most carbon-rich ecosystems in Britain in
order to produce a few sheep that would not survive commercially without
subsidy.
Every single one of these activities is, in economic terms,
an unpriced externality or a rent-seeking behaviour dressed up in agricultural
or developmental clothing. And every single one of them persists because it is
cheaper to destroy nature than to leave it alone, because the costs of
destruction are socialised while the gains are privatised.
A proper tax on pollution, on land, and on the economic
rents extracted from the degradation of the natural environment would change
that arithmetic overnight. If you were taxed on the nitrogen you put into a
river, you would stop putting nitrogen into rivers. If you were taxed on the
real value of the land you hold, you could not afford to sit on marginal
farmland waiting for a planning permission while the soil erodes and the
hedgerows come out. If the economic rent from carbon sequestration flowed back
to the public rather than to private funds buying up Scottish hillsides, the
incentive to manufacture credits through managed plantations rather than
genuine wild nature would collapse.
The result would not be a Britain where fund managers fly in
to plant trees according to a biodiversity credit metric audited by a
consultancy that knows nothing of nature. It would be a Britain where the
current economic pressure crushing nature, where taxed into oblivion.
This is what rewilding actually means, at the systemic
level. Not the carefully managed and privately owned nature reserves of the
billionaire conservation class, fenced and ticketed and carbon-credited. Not
the flagship partnership programmes that collapse when the investment firm
decides the returns are too slow. But the quiet, unglamorous, unstoppable
process of natural recovery that happens when you remove the economic
incentives to destroy.
Britain has extraordinary rewilding potential. The uplands
that have been flogged for grouse shooting and subsidised sheep farming would,
left to themselves, begin to develop into diverse woodland and scrub. The river
catchments currently saturated with agricultural chemicals would begin to
recover if the economics of industrial farming were not so heavily skewed by
the under-taxation of land and the externalisation of pollution costs. The
coastal and marine environments strangled by sewage and runoff would begin to
rebuild if the discharging of waste into water carried a genuine economic cost
rather than an occasional fine that amounts to a rounding error in a privatised
utility’s accounts.
We do not need private nature investment vehicles. We do not
need conservation philanthropists whose wealth was built on the same extractive
economy that is destroying the ecosystems they now wish to save. We do not need
biodiversity net gain schemes that allow a developer to pave over an ancient
meadow in Surrey and offset it with a managed grassland in Northumberland. We
need the tax system to stop subsidising destruction and start charging for it.
Tax pollution. Tax the economic rent from land. Tax the
externalities that are currently free to impose on the natural world. Then step
back. Nature will do the rest.
The Epstein class saving Britain’s nature is not a solution.
It is a continuation of the problem by other means: the conversion of what
remains of the natural world into another asset class, another income stream,
another thing to own and charge the rest of us to access. The answer is not to
find cleverer ways to finance nature’s recovery. It is to stop financing
nature’s destruction through a tax system that treats the degradation of land,
water and air as a free good.
The Solution: Reclaiming Publicly Created Value
The solution, when you understand the problem, is not
complicated, even if it is politically difficult.
The value that accrues to land and monopoly-adjacent assets
in Britain is, in the main, publicly created value. It was created by public
investment in transport, in education, in health, in infrastructure. It was
created by the collective activity of the people who live and work in the
places where that value concentrates. It belongs, in a deep moral and economic
sense, to all of us, not to the fortunate holders of title deeds or the funds
that have purchased them.
Reclaiming that value through taxation does not require
expropriation. It does not require the state to become a landlord. It requires
a shift in what we tax, from productive activity towards the extraction of
economic rent.
A properly designed land value tax, levied annually on the
unimproved value of land, would do several things at once. It would make it
very expensive to hold land speculatively, which would bring more land to
productive use and reduce house prices. It would capture for the public the
value that the public created, reducing the need to tax wages and productive
enterprise. It would undermine the business model of the funds that currently
buy up assets and extract rent from them, redirecting capital towards productive
investment. And it would provide a stable, growing revenue base for public
services that does not depend on taxing the incomes that are already being
squeezed by high rents.
The same principle can be extended beyond land to the other
monopoly positions that have been privatised in Britain: the economic rent in
utility networks, in digital infrastructure, in the carbon and biodiversity
credits that are now being manufactured out of the natural environment. Where a
monopoly position generates income not through productive activity but through
control of a scarce resource, that income can and should be taxed at a high
rate, with the proceeds flowing to the public rather than to foreign asset
managers.
The Henry George Foundation has argued, entirely correctly,
that the most effective way to address Britain’s inequality and stagnation is
to tax land rent more heavily and earnings from productive work less heavily.
Income derived from the extraction of value should be penalised by the tax
system. Income derived from productive work and investment should be rewarded.
This is, at bottom, what a shift from taxing wages and profits to taxing
economic rent would achieve.
Why This Is Not Happening
The reason this is not happening is not that the economics
is wrong. The economics is, on this question, unusually clear. It is that the
people who benefit from the current system are disproportionately represented
in the institutions that make policy.
The financial sector that manages the funds extracting rent
from Britain’s assets is powerful, well-connected and politically influential.
The landowners whose unearned gains would be most affected by a land value tax
are, in Britain, disproportionately the donors, the peers, the former ministers
and the members of the establishment whose networks shape political
possibility. The foreign sovereign wealth funds and private equity firms are
beyond democratic accountability altogether.
So instead, what we get is announcements. Billions in
“investment.” Partnerships with “the private sector.” Innovative new “finance
models” that allow nature, housing and infrastructure to be delivered without
raising taxes. Each announcement is technically true in the narrow sense that
money is being committed. Each announcement is a lie in the deeper sense that
what is being committed is the future income of British people, captured by
those who will own the assets that have been built, extracted indefinitely as
economic rent, and in a growing proportion of cases, sent abroad.
The Cost of Inaction
The trajectory, if nothing changes, is not hard to describe.
Britain continues to transfer its remaining productive assets, most critically
land, to private funds. Rents continue to rise. Wages continue to stagnate
relative to the cost of living. The tax base, built on productive activity that
is being crowded out by rent-seeking, continues to shrink. The government
borrows more to fund services it can no longer afford from its revenue base.
The debt grows. The pressure to cut services increases. Living standards fall.
Each generation inherits a more hollowed-out economy than
the one before. Each new cohort of young people faces higher rents, higher
house prices, lower wages in real terms, and less public service provision. The
dream of home ownership, which was accessible to most working people in Britain
as recently as thirty years ago, becomes the preserve of those who inherited
wealth from parents lucky enough to have owned assets before the great
financialisation.
This is not hyperbole. It is the logical and visible
consequence of the economic model that British governments of both parties have
been pursuing, accelerating and rebranding as “investment” for the past decade.
A Different Announcement
What would it look like if a government stood at a podium
and told the truth?
It might sound something like this: we are going to stop
selling the future to fund the present. We are going to start taxing the value
that you, the public, have collectively created, instead of taxing the labour
and production that drive our prosperity. We are going to make it expensive to
extract economic rent from land and monopoly assets, and cheap to invest in
genuinely productive enterprise. We are going to ensure that the value of
nature, of land, of infrastructure built with public money and sustained by
public effort, flows back to the public rather than to foreign funds. We are
going to build a tax base that grows as the economy grows, rather than one that
shrinks as rent-seeking expands.
It would not be a popular announcement among those who
currently benefit from the arrangement. But it would be an honest one. And it
would, over time, be a far more effective economic policy than anything that
has been announced from that podium in a very long time.
The investment lie has to end. The rent-seeking economy has
to be taxed out of existence. And the value that belongs to all of us has to
come back to all of us.
That is not a radical proposition. It is, by the standards
of serious economics and long historical tradition, a conservative one. The
radical proposition is the one we have been living with for forty years: that
it is acceptable to sell the foundations of ordinary life to the highest
bidder, call it investment, and leave future generations to pay the rent.
Comments
Post a Comment