Disproportionate presence of Conservative Party donors and supporters

Disproportionate presence of Conservative Party donors and supporters

11:08 AM, 25th November 2016, About 5 years ago 122

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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

by terry sullivan

12:47 PM, 12th December 2016, About 5 years ago

Reply to the comment left by "Lindsey " at "27/11/2016 - 10:28":

i resigned when boydave was appointed leader

by Grumpy Doug

15:30 PM, 12th December 2016, About 5 years ago

Full details of the Treasury Select Committee (Housing Policy) that Pam refers to is here:

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/treasury-committee/housing-policy/oral/44218.html

Stephen Hammond is available at stephen.hammond.mp@parliament.uk

I have likewise sent him an email ...

by Pamela Potter

19:02 PM, 12th December 2016, About 5 years ago

I wrote to Stephen Hammond about his question to Dame Kate Barker about Corporates stepping in when Private Landlords are selling off their stock (Q46) and received the following response:

"I asked the question because as we reduce the benefits to BTL there is likely to be a glut of properties on the market.

As I firmly believe we need a private rental sector, I was asking pursuing who or what entity might buy these properties. The point Prof Barker failed to grasp was that if BTL convert themselves into small corporate entities they would continue to enjoy the interest relief.

Therefore BTL may choose this option and I was trying to get her to express a view on this option".

Jay Crush | Senior Parliamentary Assistant
Stephen Hammond MP
Member of Parliament for Wimbledon

I responded thusly:

Dear Jay

"Thank you for your reply on behalf of Mr Hammond.

Whilst Mr Hammond is right about the possible tax benefits of moving properties into small corporate entities what he seems to have failed to grasp is that, in order to do this, Landlords must effectively sell their own properties to themselves and, as such, will potentially incur the following costs:

1. Capital Gains Tax - although in certain circumstances this can be deferred until the properties are sold.
2. Stamp Duty Land Tax - in my own personal case this would be £58,700.00.
3. Early Redemption Fees on mortgages as properties are sold into the limited company - my total bill at this present time would be in the region of £153,000.00.

So, unless Mr Hammond has a spare £211,000.00 knocking around that he can lend me I'm wondering how he imagines I might do this?

Mr Hammond's thoughts on a possible solution would be most welcome as we landlords are completely lost as to a logical explanation for this approach"

I hold out no hope of getting a response that actually responds the content of my email. Why start now? I have also copied every member of the Select Committee, Dame Kate Barker, The Chancellor of the Exchequer and my own constituency MP and I shall continue to do so every time I write. I'm just going to make myself a pain in the proverbial about the whole thing. It may not change anything but it makes me feel better trying.

And if anybody else thinks it's a good strategy then here are the email addresses for the Select Committee on Housing:

stephen.hammond.mp@parliament.uk
andrew.tyrie.mp@parliament.uk
kit.malthouse.mp@parliament.uk
john.mann.mp@parliament.uk

And the Chancellor too:

hammondp@parliament.uk

And if you're feeling particularly lucky:

mayt@parliament.uk

You never know!!

Pam

by Dr Rosalind Beck

19:29 PM, 12th December 2016, About 5 years ago

Reply to the comment left by "Pamela Potter" at "12/12/2016 - 19:02":

Hi Pamela. That is a truly excellent piece of work. You are a woman after my own heart - as you say, when you act you feel better about the whole thing, because you're not just sitting and accepting your fate. I teach my kids that as long as they do their best they have nothing to reproach themselves over; it is the same for us. Thank you for your efforts.

by Pamela Potter

19:40 PM, 12th December 2016, About 5 years ago

I have also written to my local Housing Department explaining exactly why I will not now be joining the RAP Scheme which has prompted an emergency meeting at the Council, clearly nobody had bothered to tell them in Gosport about Section 24.

And I am about to ask all of my tenants to write to our constituency MP demanding to know what measures are being put in place over the next two years to address their impending homelessness.

I think the more tenants that make noise about this the better. Thanks to Charles Dickens the private sector landlord is an easy target for accusations of wrong doing and greed but I think they'd struggle to find a good enough answer when faced with the realities of vast numbers of potential homeless people.

Pam

by NW Landlord

19:43 PM, 12th December 2016, About 5 years ago

Excuse my ignorance what is the RAP scheme ?

by Pamela Potter

19:47 PM, 12th December 2016, About 5 years ago

RAPS Scheme is: RENTED ACCOMMODATION IN THE PRIVATE SECTOR

I live in Gosport and the current monthly rental is £624.99 per month. I should imagine it changes from council to council.

Gosport are also currently offering £1,000 incentive to private landlords to join the scheme.

Hope this helps.

Pam

by NW Landlord

19:50 PM, 12th December 2016, About 5 years ago

Thanks it's madness that around the country councils are desperate for housing so what does the government do choke off supply deter future investment and tries to destroy PRS u couldn't make it up

by David Price

19:54 PM, 12th December 2016, About 5 years ago

Reply to the comment left by "NW Landlord" at "12/12/2016 - 19:50":

Unless you were a politician.

by terry sullivan

20:49 PM, 12th December 2016, About 5 years ago

Reply to the comment left by "Pamela Potter" at "12/12/2016 - 19:47":

i assume you will increase rents-nb hb is fully paid by central govt? it certainly used to be

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