Comment on the General Election

Comment on the General Election

I guess many people will have been surprised at what happened in the general election.

Now Boris Johnson has a mandate to really do pretty much as he pleases.

In terms of the housing sector and the private rented sector in particular, I think one thing we could see, post general election, will be a reduction in some of the top rates of stamp duty land tax and also possibly a reversing of the three per cent extra SDLT premium on buy to let purchases. However, I think we might see Boris bring in a special SDLT rate for overseas purchasers of UK residential property.

I also think that Section 21 may be removed in time and, if it is, fingers crossed, there will be some sort of special housing court that can work to speed up possession claims. (The system that we have now is far too slow and needs to be taken out of the general county court processes).

I actually don’t think landlords have too much to fear from this. Section 21 has been abolished in Scotland for two years now and the Scottish Landlords Association say they are generally rather happy with how the system now works – with possession being granted if a landlord wants to fully refurbish, sell or move back in. Indeed, if there are any complaints about the new system, they tend to be more from tenant groups – who say that the possession reasons are sometimes being abused. After all, who is going round months later to check that the landlord really did refurbish, sell or move back in?

As someone who generally resides on the centre left politically, I’m rather saddened about what has happened to the Labour Party since Momentum took over effective control of policy.

Their targets are often correct and well-meaning but their ways and means for achieving what they want are doomed to fail and simply are too expensive.

Take re nationalisation.

This is hugely expensive and British people rightly balked at the cost.

And it is not necessary.

Why not just up the powers of regulation to make sure that companies who run the utilities and rail services get into line and provide a better standard of service? No cost attaches to that.

But instead, the far left are addicted to this state ownership model as the solution to everything, thinking that “Workers Control” will somehow make us feel permanently good. They thought it was a good message going into the general election.

I was mulling this a few weeks ago when coming home late from a concert where I had drank quite a few beers. Due to failure on the state run line, I had to get change train at Lewisham and get a bus. Despite the trains being scheduled to run for another two hours at that station, the toilets were locked. If the rail station was in private hands I guess I could write to the CEO and complain. Of course, that may not get me anywhere. But given that it is in state hands, what can I do? And does my “worker ownership” help me in this case. Of course not!

Then there was the idea of forcing larger companies to hand over one percent of their equity to “workers” each year for ten years. Now the idea of more worker involvement is a good one and I think we do need more of it, but again, the method is all wrong. And in Labour’s plan, any dividends payable to workers over £500 per annum would be confiscated by the state for social projects. So, in effect, the state is seizing private assets.

A far better way would be to incentivise companies to issue more shares to workers out of their profits (not equity). Really make it worth their while – expand SAYE share schemes further, perhaps with more incentives for companies to issue them and for people, sorry workers, to buy the shares. And yes, why not worker representatives on the larger boards too? The workers would not be in the majority, but their voices would be heard more and their input may well lead to better decisions. It works well in Germany. It would work here.

But seizing private equity! It is bonkers and sounds like something dreamt up in Venezuela or Zimbabwe! New investment in business would be curtailed.

And let’s not forget that, pre-election, Labour had also floated the idea of forcing landlords to sell their houses to their tenants at a discount (that discount was still to be worked out). Again, seizing private assets without fair compensation! Madness. And you can just imagine what all the would-be institutional investors in “build to let” would think of that. Their plans would be chucked in the bin, leading to less housing being built and more homelessness.

The election lessons have not been learnt though. As Labour appear to be hell bent on electing a “Continuity Corbyn” figure, things won’t change at all – and we can actually expect ten years of Conservative rule. Only after another lost general election, will the penny drop and we get another “Kinnock moment” when he famously turned Derek Hatton and Militant at a Labour Party conference.

The wait until the general election of 2029 seems like a very long time.

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