Shadow Spokesman for Housing supports a tax that is increasing homelessness

by Property118.com News Team

8:22 AM, 2nd February 2017
About 2 years ago

Shadow Spokesman for Housing supports a tax that is increasing homelessness

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Shadow Spokesman for Housing supports a tax that is increasing homelessness

Lord Beecham has been the Shadow Spokesman for Communities and Local Government (CLG) since October 2010, and for Justice since September 2012, and for Housing since September 2015.  Quite a workload, in addition to being a Councillor in Newcastle-upon-Tyne since May 1967, and consultant to Beecham Peacock Solicitors in that city.

He is anti-BTL. He not only approves of Section 24, he wanted it extending to companies.  Furthermore he wants to prevent landlords passing the levy on to tenants.

Many confused people think that anything that is bad for landlords is good for tenants.  But Lord Beecham has a First Class degree from Oxford University.  In Law though, not in Economics.

On 5 December he tabled the following questions for written answer by 19 December:

Lord Beecham to ask Her Majesty’s Government whether they intend to take steps to ensure that limited companies are not better placed than other landlords in relation to the taxation of profits engendered by letting residential properties.   HL3797

Lord Beecham to ask Her Majesty’s Government whether they intend to introduce plans to prevent landlords of residential properties from recouping the cost of changes to the taxation of rents of such properties which will come into force next year; and if so, how.   HL3798

https://publications.parliament.uk/pa/ld201617/minutes/161206/ldordpap.htm

The first question shows that he does not understand how S 24 works, as it will restrict the allowance for individuals to 20% of finance costs, which is what corporation tax at 20% does.

His questions were answered/fobbed off as follows:

Answered by: Lord Young of Cookham

Answered on: 19 December 2016

Using actual self-assessment data, HM Revenue and Customs estimate that only 1 in 5 landlords will pay more tax as a result of this measure. Given that only a small proportion of the housing market is affected by these changes, the Government does not expect them to have a large impact on rent levels.

Incorporated businesses will continue to receive relief at the corporate tax rate. However, the rate of relief (currently 20%) is not more generous than the rate of income tax relief once these changes are fully in place by 2020-21.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2016-12-05/HL3797/

The first paragraph is very familiar.

Lord Young gave the same reply to the second question.  http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2016-12-05/HL3798/

He claims there will not be a large impact on rents, even though portfolio landlords are already increasing them.

The day after Lord Beecham tabled these questions I sent him the following email:

“Dear Lord Beecham

I see that you attended the Royal Grammar School, “the best [private] school in the north of England” and got a First at Oxford, before qualifying as a solicitor.  Let me draw a comparison with that profession.

Imagine what would have happened if the government had disallowed the biggest cost of solicitors’ practices – employee costs – so that the partners paid tax at 83% or more of the real profits.  They would have had to increase the charge-out rates or go out of business, at a cost to their clients either way.

That is the choice facing many landlords now, thanks to George Osbornes’s unconsidered and anti-Conservative meddling – which you seem to support, judging from the questions you tabled yesterday.

Landlords will have to increase rents to pay the levy on interest imposed by Section 24.  Tenants on benefits will not be able to pay the increases.  Some of them have already been evicted for this reason and made homeless.  Others have been evicted as their landlords go out of business, reducing the supply.

Those made homeless have to be housed by local councils in “temporary” accommodation at much greater expense.  You must be aware, from your association with local government, that homelessness is growing.

Rent rises and increased homelessness are the inexorable result of Section 24,  just as they were when the Irish government introduced milder forms of disallowing interest, before reverting to Generally Accepted Accounting Principles.

I would not have been too surprised if a misguided left-wing politician not only supported Osborne’s meddling but wanted to extend it to companies, and called for rent controls, “the most efficient technique known to destroy a city – except for bombing”.

However, I am shocked that an educated and knowledgeable man like yourself has done this.  Or are you really highlighting the advantage that Osborne gave to corporate landlords, including Tory Party donors, and asking the government to confirm that the resulting rent increases will be uncontrollable?

Kind regards”

So far I have not had a reply.  However, yesterday he posted an article in which he acknowledged that “we have seen an increase of 40% in the number of people having to be found places in temporary accommodation.”  He does not say over what period this increase occurred.  And he blames landlords, as a matter of course.

“The problem is the sheer shortage of genuinely affordable housing to rent, and the lack of security of tenure, in a world increasingly dominated by buy to let investors who have bought up 35% (and rising) of former council houses. It’s not just a question of people being illegally evicted but the increased difficulty in our low wage economy to pay what landlords demand.”

So have sent him another email:

“Dear Lord Beecham

I see that you have had another dig at landlords, claiming that they have bought up 35% (and rising) of former council houses.

What difference does it make who buys a former council property from the original lucky incumbent who got the discount?  The property was permanently removed from the stock of social rental accommodation when first sold.

It is not surprising that landlords bought them from the lucky incumbents.  What potential owner-occupier would risk his money knowing that the council could put tenants from hell on each side and across the road, at any time in the future?

Labour did nothing to stop the sale of council housing when in power between 1997 and 2010.

And Labour allowed unfettered access to the UK from Poland and Hungary in 2004, claiming that only 13,000 would come each year whereas most EU members, including France and Germany imposed a waiting period of seven years.

“However, more than one million arrived in one of the biggest waves of immigration seen in this country.” per the article: “Labour made a ‘spectacular mistake’ on immigration, admits Jack Straw”

http://www.telegraph.co.uk/news/uknews/immigration/10445585/Labour-made-a-spectacular-mistake-on-immigration-admits-Jack-Straw.html

Where were this million housed?

It’s time you acquired some integrity and put the blame for the housing shortage where it belongs – on politicians, including the Labour Party – instead of on landlords who have, on the contrary, both increased the supply of housing and improved its utilisation.

I pointed out, in my email of 6 December, how and why Section 24 was already causing increased homelessness.  Yesterday you acknowledged a 40% increase but did not say over what period.  S 24 is not even in force yet.  As it is introduced, evictions will increase for the reasons I gave.  We keep telling Ministers the inevitable consequence of increased costs of temporary accommodation, but they will not listen.  Only the SNP has shown any opposition to S 24.

It is not the case here that what is bad for landlords is good for tenants.  As Shadow Spokesman both for Communities & Local Government and for Housing you are uniquely placed to speak up for both tenants and councils. Will you put dogma aside and oppose S 24 for the benefit of both?

Kind regards”



Comments

Dr Rosalind Beck

9:54 AM, 2nd February 2017
About 2 years ago

Well said. How hypocritical for any politician of any party to blame landlords for the fact that some former council houses are now let out to tenants in the PRS. It is successive governments who have sold off this stock at massive discounts. And landlords are not the ones who got the massive discounts - in some cases houses were bought for £200,000 by the council tenant and sold on for a million pounds - all free of capital gains tax. This gift to the lucky few by the taxpayer was not the fault of landlords; it had zero to do with landlords. Some landlords later bought these houses at full market value and if they increase in value in the future landlords will be heavily taxed on that gain.

Also, the tenants who now occupy these houses - often in areas where owner-occupiers would not choose to buy as they may consider council house estates a bit beneath them - will be very glad to have a roof over their heads as who else was going to buy them, maintain them, make them safe and secure and often charge very low rents for them, if it weren't private landlords?

This mindless blaming of landlords has got to epidemic proportions. People who should have the intelligence to know better should be ashamed of themselves. The Labour Party is supposed to scrutinise legislation, but did nothing of the sort with Section 24 - they waved it through in Committee stage, like a load of ignoramuses. What are they being paid for? They should be sacked for incompetence.

Gromit

10:12 AM, 2nd February 2017
About 2 years ago

Landlords have been called parasites (even by politicians cf. Cllr Devine) perhaps they should start looking in the mirror first. They do not respond to the people they are supposed to serve, and wave through bad legislation without so much as a whimper.

Steven Burman

10:54 AM, 2nd February 2017
About 2 years ago

Quite frankly, who gives a stuff what Lord Beecham thinks? He is a 'shadow minister' (and always will be) representing a party that is 'dead in the water'....the Lame Duck Party are ineffective, incompetent and represent a tiny minority of delusional fools.

Beecham should put his own house in order before opening his mouth and spouting complete nonsense. The man is an idiot among idiots!

Dr Rosalind Beck

11:07 AM, 2nd February 2017
About 2 years ago

Reply to the comment left by "Steven Burman" at "02/02/2017 - 10:54":

Yes, Steven. He may have no real influence. But it is important to make the points that landlords are not to 'blame' for anything if some of the houses they rent out were at some point owned by the council. I have heard this nonsense a few times and we need to stamp down on this claptrap.

Gromit

11:37 AM, 2nd February 2017
About 2 years ago

Reply to the comment left by "Steven Burman" at "02/02/2017 - 10:54":

But some of these idiots sit on things like the Treasury Select Committee and can if they had the nous to challenge Ministers on legislation at committee stage.

Unfortunately, nous and common sense are sadly lacking in our political classes, or takes second/third place to populist party politics & self interest.

AND we pay them upwards of £74 grand a year each for the privilege. Grrrrr!!!

Rachel Hodge

11:50 AM, 2nd February 2017
About 2 years ago

These houses where tenants have been evicted from are not standing empty so how can it be LLs fault that homelessness is increasing?

It is still very simple, but Lord Beecham does not get it, perhaps because he is an idiot and/or is prejudiced against LLs.

Mr. Beecham, listen carefully and try to understand that there is an increase in homelessness because there is not enough housing for an increasing population. In addition, there is greater demand for rental property than OO due to lending criteria, immigration and free movement of labour.

LLs do not increase the demand for rental property and neither do they restrict the supply (obvs). Consecutive governments are responsible for both the increased demand and restricted supply.

Get it?

Dr Rosalind Beck

12:20 PM, 2nd February 2017
About 2 years ago

Reply to the comment left by "Rachel Hodge" at "02/02/2017 - 11:50":

Well said Rachel. I will check that the link to this thread is sent to him so that he can be more informed on the issues. You have made some very logical points - I love logic, whilst many politicians seem to favour obfuscation.

Rachel Hodge

12:54 PM, 2nd February 2017
About 2 years ago

Reply to the comment left by "Dr Rosalind Beck" at "02/02/2017 - 12:20":

Thanks Ros. Let's hope he reads it.

Simon Griffith

13:29 PM, 2nd February 2017
About 2 years ago

Notwithstanding all of the previous multitude of examples of out of touch politicians I can't help but still being shocked at how prejudiced and actually ill informed such individuals from very privileged backgrounds can be. From the mathematical ignorance of attacking incorporated bodies who currently 'enjoy' 20% 'relief' - the same as unincorporateds will be reduced to ultimately to the lack of common sense on the uninintended consequences of government meddling. How sad to be having to tell my children repeatedly not to trust politicians, study hard at school to ready themselves to move out of the country if need be, how my son should do business studies if he likes but should not count on us having a business to join if we keep getting attacked. Dreadful state of affairs. Head down...dreading the next budget.

Jamie M

13:50 PM, 2nd February 2017
About 2 years ago

They need an enemy to focus the blithering idiots who voted for them upon and blame them for all manner of ills as the useless pricks couldnt pull a pint in a pub.
Distraction, distortion, deflection

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