10:38 AM, 29th September 2015, About 7 years ago 44
During his first speech as Shadow Chancellor John McDonnell hinted at his views on introducing rent controls and stopping tax breaks for Buy to Let landlords without actually giving much away in detail.
The Labour party have estimated that tax breaks to Buy to Let investors are worth £13billion per annum and it is understood that if they were to get into power they would be looking for the ability of landlords to offset costs against taxable income to be abolished. Thus sending many property investments into a negative cash flow position.
From the transcript of the speech McDonnell said: “There will be cuts to the billion pound tax breaks given to buy to let landlords for repairing their properties, whether they undertake the repairs or not.”
“And cuts to the housing benefit bill when we build the homes we need and control exorbitant rents.”
What exactly this means for his plans on the taxation of Landlords and the instigation of rent controls in the Private Rented Sector has been left wide open.
Mr McDonnell also criticised the Bank of England for missing the inflationary target of 2%. He indicated that although the Bank of England would be kept independent from politically lead decisions he would be looking for a much wider economic objectives than just inflation.
McDonnell said: “I will also be setting up a review of the Bank of England.
Let me be clear that we will guarantee the independence of the Bank of England.
It is time though to open a debate on the Bank’s mandate that was set by Parliament 18 years ago.
The mandate focuses on inflation, and even there the Bank regularly fails to meet its target.
We will launch a debate on expanding that mandate to include new objectives for its Monetary Policy Committee including growth, employment and earnings.”