Why take a tenant if you cannot evict them?
Why do people let houses? Because they hope to make money by doing so. In most circumstances, the profits are not large, because the costs are high, but it is worth doing because the house owned is a store of value and a hedge against inflation. What will landlords do if the opportunity for profit disappears? They will stop offering houses for rent if they possibly can. New landlords will not come forward to replace them.
Yet the Government is toying with the idea of getting rid of Section 21 of the 1988 Housing Property Act. This section allows a landlord to ask a sitting tenant to quit at the end of an agreed period. If it is abolished, so that no notice to quit can ever be issued to a tenant, the incentive to let disappears. The value of the property thus encumbered drops, sometimes halves. Besides, sitting tenancies require rent controls to work, so the landlord will be stuck, not only with the tenant, but with every prospect of lower returns as time passes.
The effect on small-scale landlords, most of them natural Tories, could be dire. Would their mortgages any longer meet the banks’ loan-to-value criteria? What would happen to them if the banks demanded repayment? Similar damage would be done to the small builders who look after such properties and are just the sort of aspirant, practical people the country needs.
Poorer people certainly suffer greatly from the housing shortage. If it could be shown that sitting tenancies would increase the number of cheap rented homes, then a price to landlords might be worth paying. But in fact the opposite is the case. An unmovable tenant creates, over time, an unworkable business. Some ministers may see this as “levelling up”. Actually, it is more like closing down.
When vested interests defend themselves, they love preposterous exaggeration. More than 30 years ago, the government introduced a modest reform which would allow solicitors the same “rights of audience” as barristers. The then Lord Chief Justice described the green paper on the reforms as “one of the most sinister documents ever to emanate from government”. I still laugh whenever I remember this.
The distinguished, recently retired broadcaster David Dimbleby describes the present Government’s idea of decriminalising non-payment of the BBC licence fee as “pernicious”. Again, one can only laugh.
There are some respectable arguments for the licence fee, but is there any other poll tax bearing most heavily on the poorest and bringing roughly 200,000 people a year before the courts against which Mr Dimbleby thinks it would be “pernicious” to campaign?
The Dimblebys earned a regular living from the BBC from 1936, when David’s famous father Richard joined, until last year, when David stood down from Question Time and his brother Jonathan from Any Questions? All three were very good at their jobs. To them, it must be axiomatic that the BBC is so virtuous that refusing to pay for it is a criminal offence. For growing millions, however, that logic is elusive.
The Confederation of British Industry – the CBI – is another vested interest which, like the BBC, seemed to lose its reason, and certainly its fairness, during the Brexit wars. Yesterday, its director-general, Dame Carolyn Fairbairn, reluctantly admitted that she had not been invited to the Prime Minister’s Brexit trade speech at Greenwich on February 3.
Dame Carolyn is polite these days, trying to get her organisation back in the game. But before the general election she was vehement and highly political, first against Brexit, then against no deal, and also against Boris Johnson, stating that the CBI viewed his premiership (before he had attained it) with “deep concern”.
The CBI is an important industry body, entitled to its voice; but such bodies cannot expect to be close to government policy if they have pitted themselves against the main aims and personnel of that government.
Dame Carolyn and her followers are like the trade union barons after Mrs
Thatcher came into office in May 1979. The union leaders had tried to run the country before, and they had failed. Mrs Thatcher therefore stopped the custom of giving them “beer and sandwiches at Number Ten”.
Over the weekend, two groups of very different persuasions have come to similar conclusions about carbon net zero by 2050, to which the Government is committed. The Global Warming Policy Foundation (on whose board I sit) is sceptical about many policy prescriptions to halt climate change. The Green New Deal Group is run by Leftists and Greens who want to “pull the world back from economic and environmental meltdown”. But they are close to agreement on costs. The GWPF’S new study puts the figures at £100 billion per year (on average) between now and 2050. The Green New Deal agrees on the £100 billion per year figure, but projects that cost over only 20 years.
The sum of £100 billion is more than our entire annual spending on education and is two and a half times our annual defence budget. Yet the advisory Committee on Climate Change calls the cost “manageable” and avoids trying to work it out accurately. Whatever your view, isn’t it time the Government admitted the scale of spending and tried to explain why it is needed and how it will be paid for?