The Man of Property and the Owl of Minerva
Minerva is a property investment and development company whose principal strategy is to create shareholder wealth through investment in property.
THE row over "New Labour"'s turn to old capitalist ways, with party Treasurer Jack Dromey revealing that neither he nor anyone on the Party's National Executive Committee was told about £14 million in loans from fat cat friends, has dragged the party and government into wider and deeper mire.
The affair of Culture Minister Tessa Jowell, separating from her lawyer husband David Mills after insisting she knew nothing about money from Italian prime minister Silvio Berlusconi channeled through offshore trusts to pay their mortgage, is starting to look like an amusing tit-bit, just a taster for the main course.
The device of taking loans rather than donations was a way of evading laws requiring political parties to reveal the sources of finances. It turns out that Tony Blair knew the identity of the lenders who contributed £14million before the last election, money brought in care of his confidente and roving Middle East envoy Lord Levy. Blair then nominated these generous individuals for peerages.
This is the Labour leader who boasted that he would not be beholden to the trade unions which founded the Labour Party, dismissing them as "sectional interests". New Labour is a party for the millionaires, not the millions.
Blair's deputy prime minister, Environment Secretary John Prescott, the one-time seafarers' union activist whom he relied upon to keep union leaders happy while reforming the Party, has been caught up in an embarassing disclosure that he approved planning decisions benefitting those who lent money to the Party.
A report in the Sunday Times by Gareth Walsh and Robert Winnett, ("Prescott Caught in Loans Row" , March 26) says: "JOHN PRESCOTT made planning decisions in favour of two property developers who had given secret loans and a donation to the Labour party, it emerged this weekend. The deputy prime minister gave his backing to a controversial £600m scheme proposed by Andrew Rosenfeld, chairman of the Minerva property company, only months after Rosenfeld had secretly loaned Labour £1m last year.
"It was the second time Prescott had favoured the company. In 2003 he approved planning permission for a controversial skyscraper in London.
At that time the chairman of the company was Sir David Garrard, who had only months earlier given Labour £200,000. Garrard went on to lend the party £2.3m last year and was nominated for a peerage.
"Given the company’s links with the Labour party, critics say Prescott should have stood aside because of the potential conflicts of interest. Prescott, however, insists that he did not know about the secret loans and that he was following his planning inspectors’ advice.
"Minerva has been chaired by Rosenfeld since April last year, after Garrard stepped down. Six months later — and after Rosenfeld had loaned Labour £1m — Prescott made his decision in favour of Minerva’s plans for Park Place, a 1m sq ft US-style shopping mall in Croydon, south London. The £600m mall had previously been granted planning permission but the development was at risk from a rival scheme, a proposed extension to a nearby existing shopping centre which, if allowed to go ahead, would have scuppered Minerva’s project.
Prescott killed the rival scheme, put forward by a consortium called Whitgift, by rejecting its appeal against an earlier refusal by inspectors to give it planning permission.
"Before the decision, Minerva had suffered heavy losses. Days after Prescott’s announcement, shares rallied, boosting the value of Rosenfeld’s personal shareholding by £4m.
"Park Place was the second of the company’s developments to benefit from a Prescott decision following cash support for Labour from a Minerva chairman. Prescott decided not to “call in” for further scrutiny plans for the 50- storey Minerva tower, due to become the tallest building in the City of London — despite intervening in two similar developments by other companies.
Prescott was asked to decide the fate of the £500m tower six months after a £200,000 donation to Labour in June 2003 by Garrard, then chairman of Minerva.
Garrard later gave his loan of £2.3m to Labour, although by the time of Prescott’s announcement on the Croydon scheme he had stepped down as chairman and sold his shares in the company.
News of the link between Minerva bosses and Labour has attracted particular attention from teachers and trade unionists, including Labour Party members, in the London Borough of Brent. On 15 November last year the Labour-run council in this north-west London borough officially announced plans for a second City Academy, on a site near Wembley Stadium.
"Brent Council is proposing to launch the borough's first school to meet the educational needs of three to eighteen-year-olds on one site in September 2009. The council's Executive last night approved a recommendation to submit an expression of interest to the DfES to create a new academy in partnership with sponsor Andrew Rosenfeld, who would provide £2m towards the capital costs. It also agreed, in principle, to buy a site for the proposed academy at Wembley Park Sports Ground, adjacent to Wembley Park tube station, from Transport for London (TfL).A second academy is needed in the borough to meet the acute demand for extra school and nursery places in the borough, the council believes. A comprehensive report that it commissioned earlier this year has estimated that an additional 2,100 secondary school places alone will be needed in Brent by 2014 as the number of young people living in the borough increases. "Our proposal is to create an academy that sets the highest standards of aspiration and achievement for its students," says Councillor Michael Lyon, Brent Council's Lead Member for Children and Families.
Even before the decision was announced, the Wembley academy plan was the subject of fierce controversy, with council leader Ann John determined to push it through. Many opponents are against Labour's whole City Academy policy, which has handed schools over to businessmen and religious outfits and diverted resources away from elected authorities. "They are given £m's of public money to deliver their educational experiments with no accountability to local electors, parents or even Ofsted", says a contributor to Brent Trades Union Council's online discussion.
They are also opposed to the loss of the Wembley site which has been providing sports facilities and other amenities for the community (some sports stars first trained there). What's more, they say a major school by Wembley Park would be a "white elephant", at the wrong end of the borough, and requiring children to bussed to an already busy main road location.
Brent already has the Capital City Academy, formerly Willesden High School, now officially specialising in sport and run by a wealthy sports good manufacturer. Eight out of the 13 governors are appointed by Sir Frank Lowe. The proposed academy at Wembley is to specialise in "family".
When Tony Blair was asked about academies in the North-East which had adopted Creationism (teaching the Bible account in Genesis as literally true, and treating Evolution as "just a theory"), he said he didn't care so long as they gopt good exam results. Well that's not something Brent's academy can claim.
A report in the Times Education Supplement, 'Academies hit rock bottom', by Graeme Paton, published on 18 March 2005, says:
"The Government's city academies have been branded an expensive flop after nearly all were among the worst in the country for key stage 3 test results.
Nine out of 11 academies, independent state schools backed by private sponsors, featured among the bottom 200 schools in England in last year's tests for 14-year-olds, the results of which were published this week.
"The results, in maths, science and English, will raise further questions about the academy programme, which has already been attacked for diverting resources away from other schools and placing too much power in the hands of private sponsors. ....
"Capital City in Brent, north London, was the worst-performing academy, with just 28 per cent of pupils reaching the level expected of 14-year-olds in English, 35 per cent in maths and 23 per cent in science".
Of course, it could be argued that a person ought to be free to fund the party of their choice, or take part in its programmes, without suggestion of undue influence. Until recently Andrew Rosenfeld was not widely known as a Labour supporter. In fact in 2001 he offered his services to be treasurer of the Tory party. Evidently not a man who puts all his eggs in one basket.
Andrew Rosenfeld and Minerva are not newcomers to the education game, though. As the London School of Economics announced three years ago:
" Minerva plc, the FTSE 250 property company, has launched a ground-breaking joint venture with LSE's Cities Programme. The venture will undertake new research into key factors impacting on urban development.
Minerva is making an initial investment of £500,000 in the joint venture project, which will be named The Minerva LSE Research Group. The group will undertake a continuing stream of original research initiatives targeted at addressing the practical issues that will influence development in major urban areas, the arena in which Minerva's development activities focus. The group also aims to enhance the awareness and clarity of the issues that are impacting upon urban areas and, in turn, help shape the future of public policy.
The move represents the first time that a UK property company has independently created an entity dedicated to long-term research into those issues that affect its industry. The results will provide Minerva with an exclusive resource to be considered when formulating future strategy and the findings of the group will constitute a public knowledge base, giving advice on how best to plan cities that will be of value to city governments and mayors on a world-wide basis.
Andrew Rosenfeld, chief executive of Minerva, commented: 'The property industry has for too long made major investment decisions that have enormous impact on our environment and infrastructure that are based on little or no practical research. No other industry makes commercial decisions on this basis. This initiative, conducted with one of the world's leading academic authorities on urban design and regeneration, will go some way towards redressing this and provide Minerva with a platform of considered research which will enhance its performance as one of London's major developers.' .'
This set me wondering. As Minerva's own mission statement says, its prime aim is to "create shareholder wealth through investment in property". Not unreasonable -it is a property company, not a charity. Transport for London has just opened the new rebuilt and expanded Wembley Park station. With the new Wembley Stadium when it eventually opens, expected to bring new business as well as traffic, one could expect a rise in land values.
Brent council is very keen on what it calls the "regeneration of Wembley". It even fancied a big American-financed casino complex near the stadium, and its plans for Wembley Central look like pushing out the Somali cafes and others curently using the run-down shopping plaza. The Owl of Minerva, symbol of wisdom, flies at dusk it has been said. Could it be that having acquired the land next to Wembley Park for development, Brent's second academy might make a moonlit flit to a less potentially profitable site? Perhaps with the row now threatening "New Labour" and its best-laid plans we'll never know what might have been.
Council elections are due in May. Unfortunately the liquidation of the Socialist Alliance, which might have challenged Ann John in her Stonebridge ward seat, means opponents of the City Academy have yet to pack the punch they could be doing.
Labels: Property and Debt