Disproportionate presence of Conservative Party donors and supporters

by Jacob Rowntree

11:08 AM, 25th November 2016
About 2 years ago

Disproportionate presence of Conservative Party donors and supporters

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Disproportionate presence of Conservative Party donors and supporters

While Section 24 of the Finance Act 2015-16 remains set to restrict the mortgage tax allowance of individual landlords to a mere 20%, thereby forcing many of them to raise rents or evict their tenants and sell-up, the tax-adjustment places no such restriction upon corporate landlords and property rental companies. Corporate letters therefore remain able to deduct 100% of mortgage costs from their tax liability, and by definition are able to operate at a distinct, state-engineered, fiscal and competitive advantage over their smaller rivals in the market place.conservatives

Below are a number of examples, indicating the disproportionate presence of Conservative Party donors and supporters within what has become a fiscally-favoured, corporate residential sector:

  • Berkeley Group

Founder of Berkeley Group, Anthony William “Tony” Pidgley, has donated £2’000 to the Conservative Party (http://www.telegraph.co.uk/news/9769966/New-Year-Honours-List-2013-Tory-donors-get-gongs.html) and was appointed “Commander of the Order of the British Empire” by the Queen “on advice of the British Government” on 28th December 2012 (https://en.wikipedia.org/wiki/2013_New_Year_Honours). To Conservative Member of Parliament and London Mayor, Boris Johnson, Mr Pidgley has gifted a glass paperweight, engraved trowel worth £500, and tickets to the Berkeley ball (http://www.theguardian.com/politics/ng-interactive/2015/apr/01/tory-100-industry-captains-party-donors-tax-avoiders).

  • Canary Wharf Group

The £6.2 billion group is also reviewing the mix of the 566 flats in the Newfoundland tower on Canary Wharf, with a view to converting some or all of the 58 floors to rental units. During a presentation to City analysts, the group’s finance director Peter Anderson stated that Canary Wharf planned to hold a significant portfolio of private rented sector (PRS) units. (http://www.standard.co.uk/business/markets/peter-bill-canary-wharf-group-flocking-towards-rental-flats-9798016.html)

“Canary Wharf Group will be investing hundreds of millions in PRS because returns beat those from offices, says the firm. Rental income of around £2500 a month for a typical two-bed flat is the equivalent of £50 per square foot of office space, they say. This is about £10 more than the net income from renting offices.”

Since the 2010 General Election, Canary Wharf Group has donated £135,200 to the Conservative Party, £40,000 to Labour and £14,000 to the Liberal Democrats. In 2011, Chairman and CEO of Canary Wharf Group plc, George Iacobescu, was knighted (http://www.theguardian.com/politics/ng-interactive/2015/apr/01/tory-100-industry-captains-party-donors-tax-avoiders).

  • Residential Land Ltd

This company has been on an “acquisition spree” since securing further backing from Canadian pension fund giant Ivanhoé Cambridge. In September 2015 the company agreed to buy the 95,000 sq ft Hamlet Gardens development in London’s Hammersmith from Swedish investor Akelius for around £95m. In June, it snapped up Chase New Homes’ residential scheme at Palace Wharf in Fulham at £1,250/sq ft – in a deal worth approximately £37m – as well as a luxury 60-flat scheme at 4b Merchant Square, Paddington, for £60m from Native Land and Malaysian investor Amcorp (http://www.residentialland.com/blog/index.php/category/company-news/)

Residential Land’s joint-owners, Bruce and Shadi Ritchie, have donated a combined total of £165,000 to the Conservative Party since 2013. The holding company of Residential Land has also given a further £64,000 to the Conservatives since February 2012 (http://www.independent.co.uk/news/uk/politics/party-funding-tory-coffers-benefit-from-fear-of-labour-mansion-tax-9716614.html)

  • Delancey & DV4 Limited

East Village is perhaps the highest profile Build to Rent scheme in the UK. Converted from the London 2012 Athletes’ Village, it now provides 1,439 rental homes in London E20 http://www.bpf.org.uk/sites/default/files/resources/BPF-Build-to-Rent-Welcome-to-the-UKs-newest-housing-sector.pdf). This project was a £181 million joint venture between Quatari Diar and DV4 Limited, advised by Delancey (https://www.gov.uk/government/publications/build-to-rent-round-2-allocations/build-to-rent-round-2-signed-contracts)

James Ritblat is the founder, chairman and chief executive of Delancey (https://en.wikipedia.org/wiki/Jamie_Ritblat) and was the first director of DV4 Limited. James Ritblat is also the son of John Ritblat, former chairman and CEO of the British Land Company PLC, and Chairman of the Conservative Party’s Olympics Oversight Committee: an item of particular relevance given East Village’s development from the London 2012 Athletes’ Village.

Shortly before the property consortium’s purchase of the Athlete’s Village site, Delancey made a £50’000 donation to the Conservative Party (http://www.dailymail.co.uk/news/article-2041229/Tory-donor-Jamie-Ritblat-snaps-Olympic-Village-knock-price–costing-275m.html).

In the above cited article in the Daily Mail, Val Shawcross, a Labour member of the Greater London Authority, said: “This transaction needs to be closely looked at. In public life the appearance as much as the reality needs to be considered. The public need to know that this was an honest deal and if or to what extent donations to the Tories affected it.” Cllr Jenny Jones, chairman of the GLA’s planning and housing committee, added: “On the face of it this needs to be stopped. I’m going to call for an immediate investigation and will be raising this matter with Mayor Boris Johnson as a matter of urgency.”

  • David and Simon Reuben

The billionaire corporate landlords and owners of Millbank Tower in Westminster have given almost £500,000 to the Conservative Party over the past decade (http://www.telegraph.co.uk/news/earth/hands-off-our-land/8754027/Conservatives-given-millions-by-property-developers.html).

  • Terence Cole

The London-based developer has donated almost £300,000 to the Conservative Party (http://www.telegraph.co.uk/news/earth/hands-off-our-land/8754027/Conservatives-given-millions-by-property-developers.html).

  • IM Properties

This company has given around £1 million to the Conservative Party since 2009 (http://www.telegraph.co.uk/news/earth/hands-off-our-land/8754027/Conservatives-given-millions-by-property-developers.html).

  • Argent Group Plc

Richard Meier is a partner in Argent (Property Development) Services LLP (http://www.argentllp.co.uk/the-partners). At 10:52 on 04/03/16, Meier was interviewed by Samantha Washington of Sky News. He was participating in his capacity as Chairman of the Urban Land Institute Residential Council, to announce the publication of its guide. During the interview Meier alluded to the majority of landlords being rogues, describing how the rental accommodation provided by institutions will be purpose-built for long-term rental, providing professional service. He continued, with a grin, “It’s a very different piece to your rogue landlord, your buy-to-let landlord, who owns one or two properties”. The interviewer, Samantha Washington said “It sounds good.”

During the above mentioned interview, Richard Meier publicly slandered Argent’s competition: the vast majority of landlords owning one or two properties.

Michael Freeman is the co-founder of property developers Argent Group plc. Mr Freeman has donated £457,900 to the Conservative Party since June 2006 (http://www.bbc.co.uk/news/uk-politics-17512814).

  • Helical Bar & The Conservative Planning Forum

The Conservative Planing Forum raises around £150,000 a year for the Party and charges members £2,500 to meet senior MPs to discuss policy and planning issues. Mike Slade, the forum’s chairman, has given more than £300,000 over the past decade, individually and through his property firm, Helical Bar (http://www.telegraph.co.uk/news/earth/hands-off-our-land/8754027/Conservatives-given-millions-by-property-developers.html).

  • Regis Group

One of the UK’s biggest residential property rental companies, had by February 2015 and at a cost £8m, extended their rental portfolio to include a further 767 rental properties across northern England. These acquisitions included properties in Manchester, Leeds, and a notable 108 units in Liverpool (http://www.liverpoolecho.co.uk/news/business/residential-property-group-regis-spends-8587047).

In 2008, the Regis Group donated £7,900 to the Conservative Party (http://www.mirror.co.uk/news/ampp3d/tory-mps-donors-taking-millions-5614468)

  • Osborne & Little

The family firm of former Chancellor of the Exchequer, George Osborne, applied for planning permission for around 45 flats and houses at Denning Mews in Clapham. Once given the go-ahead Osborne and Little sold its site to the offshore firm Nightingale Mews Incorporated for £6,088,000. A legal expert shown contracts obtained by Channel 4 News said Osborne & Little must have known the developer was based in the tax-haven of the British Virgin Islands, and had the potential to avoid millions in tax. Nightingale Mews went on to redevelop the site and is estimated to have avoided up to £2 million in tax on its profits.

At the time of the sale, Mr Osborne was the beneficiary of a family trust that owned at least 15% of Osborne and Little, and so would have personally benefitted from the sale (http://www.channel4.com/news/george-osborne-family-business-6m-deal-with-offshore-firm).

On 14th February 2016 it was revealed that despite George Osborne having shared in a £335,000 dividend payout from his family’s profitable wallpaper business, Osborne & Little had not paid any UK corporation tax for the past seven years (http://www.thesundaytimes.co.uk/sto/news/uk_news/article1668208.ece).

  • Richard Benyon

The Conservative MP is both a corporate landlord and Britain’s richest MP (http://www.dailyrecord.co.uk/news/politics/revealed-britains-richest-tory-mp-3177996#5AQH7K9SyJlCldAg.97), with a 2013 yearly revenue stream consisting of £625,000 of housing benefit payments from West Berkshire Council alone. Mr Benyon was the subject of widespread newspaper criticism in November 2014 when, after his having purchased London’s New Era estate as part of a consortium, rents there were raised dramatically and its tenants placed under sudden and extreme financial pressure to leave (http://www.theguardian.com/commentisfree/2014/nov/10/millionaire-tory-mp-tenants-estate-flats-richard-benyon):

An extract from the Guardian describing the predicament of a New Era tenant read “[Lyndsey] Garratt was previously paying about £640 a month for the two-bed she shares with her daughter; when her contract expires in July 2016 residents expect they will be charged around £2,400 a month. For Garratt, a care co-ordinator at the local NHS trust, that is way more than her entire take-home pay.”

  • Legal & General

The concept of Section 24 was proposed by David Kingman, a non-economist, in a report which he wrote in 2013, the year he left university with a degree in – Geography!

In the Summer Budget the Chancellor George Osborne (a graduate in History) implemented a recommendation that was in a report from the Intergenerational Foundation, written by David Kingman.

On his Linkedin profile, David Kingman states: “I was the lead author on a research project looking at the tax treatment of buy-to-let property which led to major policy changes in the 2015 Budget”. At this time David Kingman’s namesake, John Kingman, was also the Treasury’s second most senior civil servant.

John Kingman is now Group Chairman of Legal and General plc, whose website states “In 2015, we partnered with PGGM, one of the largest Dutch pension managers, to form a £600m partnership to develop purpose-built private rental housing across the UK. We expect to play a significant role in this sector to form a new institutional asset class and are seeing a strong pipeline of opportunities. Additional investors will be introduced to the fund generating further fees for LGIM, as our build to rent portfolio grows in 2016 and beyond.” (http://www.legalandgeneralgroup.com/investors/lgc.html)

John Godfrey, former head of corporate affairs at L&G, took over the Downing Street Policy Unit on the appointment of Prime Minister Theresa May. Despite a lack of Whitehall experience, Godfrey boasts stewardship of L&G’s impressive corporate and social responsibility program concerning financial inclusion and housing, two key areas of the new PM’s role. According to The Times “Eyebrows are being raised at the appointment of course, throwing new light on to the extensively growing revolving door between lobbyists and advisers.” (http://www.thetimes.co.uk/article/fight-to-create-a-fairer-britain-will-be-led-by-an-insurance-lobbyist-v77jcf0xw)

Tamasin Cave, head of the Alliance for Lobbying Transparency commented: “If I was L&G I would be rubbing my hands in glee that their man has been taken into the heart of No 10…It’s not too much of a surprise though as this is a government head to toe full of former lobbyists.”

Godfrey was an adviser to Douglas Hurd in the 1980s and even stood in a byelection in Perth and Kinross in 1995, losing to the SNP. In his new position, he will work alongside Fiona Hill and Nick Timothy, two of May’s closest confidents from her time in the Home Office.

We believe that the dramatic favouring of corporate landlords over their individual counterparts by the Treasury, is driven by the aforementioned preponderance of prominent members and financial supporters of the Conservative party within the corporate entities concerned. We believe that Section 24 has been expressly designed to eliminate the competition of individual landlords from the market place – which key affiliates of the Conservative Party would otherwise have faced – thereby allowing the said affiliates and their corporate rental companies to expand their businesses and personal remuneration to a significantly greater degree than under the previous fairer tax arrangements.

The Treasury speaks of “levelling the playing field” between the wealthiest landlords and owner-occupiers, yet has chosen to protect the Conservatives’ own affiliates and Britain’s actual richest landlords from Section 24. We believe that rather than to serve its official purpose, Section 24 is in reality a disguised reward by the Tories for the donations of corporate letters, allowing them to rewrite fiscal policy for the purpose of destroying small and medium sized competitors.

We believe that this government has put corporate vested interests above the ability of Britain’s renters to continue to live within their home at a price they can afford.



Comments

Dr Rosalind Beck

13:41 PM, 25th November 2016
About 2 years ago

It is obviously very disappointing to see that such a conflict of interest is allowed in the UK. I am used to seeing this kind of 'corruption' in other countries but it is terrible to see it operating here.

The Government has also never offered any justification whatsoever for this differential treatment; the reason being that there can be no justification. Sometimes they vaguely imply that these corporate lets will be more 'professional.' If, by that, they mean that they will charge much higher rents than us 'traditional' landlords, then I think that is the kind of 'professionalism' the cash-strapped tenants of this country can do without; especially the students who are going to be increasingly forced to rent from these large corporations as they gain more of a hold because of their favoured fiscal treatment.

In fact, studies show that tenants are more satisfied with us 'traditional' unincorporated landlords, so the whole thing is a complete disgrace.

Chris Clare

14:01 PM, 25th November 2016
About 2 years ago

Well Ros I have already spent £30 on making myself professional (new LTD for my property).

I intend to follow Mark's advice and get everything over to that entity.

I have given up trying to stop the tide coming in, and hate to say it but, if you can't beat them join them.

Quite frankly this is utterly disgraceful but sadly I cannot pay my mortgages and feed my children on what should be right.

Luke P

14:06 PM, 25th November 2016
About 2 years ago

Reply to the comment left by "Chris Clare" at "25/11/2016 - 14:01":

It's only a short leap to include corporates. Corporates with a turnover of less than £XX (so as not to include and upset the 'big boys')...

Chris Clare

14:18 PM, 25th November 2016
About 2 years ago

Reply to the comment left by "Luke P" at "25/11/2016 - 14:06":

Fair point Luke but it would smack as a witch hunt if they started to do that.

Not to mention the other people it would start to effect who have borrowings within company wrappers who may not be large but have otherwise avoided scrutiny.

Adam Hosker

14:41 PM, 25th November 2016
About 2 years ago

You missed my name off the list. Anyone investing in property seeing Socialist Ed Miliband with his rent caps was mad not to help fund the Tories.

Its odd to say after 3% SDLT, Clause 24, Tougher BTL Affordability Calcs, BoE to Regulate BTL, Selective Licensing Expanding, Neutering Possession Orders over none existent "retaliatory eviction" and Universal Credit.

Chances are come next election - I will be Voting for Theresa May over Far-Left Extremist Jeremy Corbyn, giving a few pennies so I can get a new conservative Mug for my Coffee.

Though if you want evidence that institutional investors are spared, whilst "corner shop" landlords are taking a hit:

The new SDLT was supposed to exclude large landlords (it was revised in the end), Clause 24 does not effect institutional Landlords, the Tougher BTL Affordability has to take "Tax" into account which means tougher affordability for personal rather than LTD Co and every time the housing minister talks about Landlords. The word "institutional" tends to be in front of it.

I have majority of my property investments in LTD Companies and they are selling like hot cakes via Bespoke Finance.

Denise G

16:18 PM, 25th November 2016
About 2 years ago

the whole things stinks - at least I can put my hand on my heart and say I've never voted Tory in my life

Mark Alexander

18:08 PM, 25th November 2016
About 2 years ago

I'm pretty sure Legal & General are one of the main sponsors of David Kingman's Inter Generational Foundation too.

I can't help but wonder whether John Kingman is the father of David Kingman and that a deal to screw over private landlords in order to clear the decks was brokered and financed by Legal and General whilst John Kingman was ensconced in Westminster. There are just too many coincidences for this to be a coincidence, especially now we know that John Godfrey left Legal and General to work for the Government.

Let us put this into perspective.

Kingman Jnr writes a report for Inter Generational Foundation, which is funded by Legal and General, to make private investment into residential property less viable for private individuals.

At the same time, Legal and General is putting together a corporate deal to get into residential property investment under the stewardship of Kingman Snr

An educated guess is that John Kingman is the father of David Kingman - I may be wrong, it could just be a coincidence they have the same surname, but I would love to find out. Does anybody know how we could go about this?

Kingman Snr has a position of influence in Government but when he leaves that position he becomes Group Chairman of Legal and General.

The Legal and General head of corporate affairs then finds himself in a position of power within Government.

Have the researchers at Property118 Landlord Group unearthed corruption at the highest level or is this all just a conspiracy theory make up of a string of facts and coincidences?

Will this make the National News?
.

Gareth Wilson

18:56 PM, 25th November 2016
About 2 years ago

Reply to the comment left by "Mark Alexander" at "25/11/2016 - 18:08":

It's interesting that you should mention that Mark...

Take a look at this everyone: http://www.if.org.uk/wp-content/uploads/2016/09/Generations-Apart-Brochure.pdf

The organisation's two respective logos, Legal & General and the Intergenerational Foundation, are side-by-side on page 1.

Googling the names of each organisation together reveals them to be in remarkably close cooperation.

Could it be that Section 24 was conceived by Legal & General?

Anon

19:06 PM, 25th November 2016
About 2 years ago

It disgusts me that Generation Rent, Shelter and other similar groups are being played like pawns in these corporate games. Maybe Legal and General and other corporate conglomerates are funding them too?

The "people" campaigning in favour of Section 24 have clearly been subjected to corporate brainwashing in a very sophisticated way.

Dylan Morris

19:23 PM, 25th November 2016
About 2 years ago

I agree with your point Luke. When there are loads of landlords incorporating and getting round Clause 24 they'll just change the goal posts to include those with just a modest turnover, exempting their "mates" in the larger corporates.

Didn't they do this with the extra Stamp Duty. Companies with 15 properties have to pay the extra 3% but larger concerns with more than 15 properties are excluded from the increase ?

My reoccurring nightmare is Rent Smart England ...... coming to a town near you soon !!

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