It is far too early to tell exactly what impact on the property sector the election to the Labour Party Leadership of Jeremy Corbyn will make. Corbyn is the most left wing of the Labour Party Leadership Candidates and is now the Leader of Her Majesty’s Opposition.
Jeremy Corbyn is a privately educated man who grew up in a Manor House in Shropshire. The MP for Islington North, Corbyn is a “former” Marxist who is also the brother of Piers Corbyn. Piers was a housing and squatters’ rights activist in London and once the International Marxist Group candidate for Lambeth, who showed in his actions little regard for property owners’ rights.
Jeremy Corbyn himself has been married twice previously, firstly to his “political soul mate” and then to his second wife from whom he reputedly separated following his insistence of the school being chosen by her for their third son. As this was a selective school, he considered this against his principles and the official inference is that he was not prepared to compromise on his principles despite his 12 year marriage and 3 children. He is currently now married to wife No 3, Laura Alvarez.
Certainly some initial assessments indicate that it may be interesting economic times ahead for both the country and the property sector. The construction of the new leader’s team has already raised eyebrows with some of the business community. Being described as a Democratic Socialist with left wing views, he may find that just controlling his own party may be a considerable challenge. As a back bench MP, Corbyn was renowned for ‘cocking a snoop’ at authority and refusing to tow the party line. It will be difficult for his team to expect loyalty from other Labour MPs.
On a macro-economic basis, the initial effect of Mr Corbyn’s election will have no significant affect on the economy. Mr Corbyn is the Leader of the Opposition and not the Prime Minister.
However, some have suggested that his strong support within the more extreme elements of the party means that industrial unrest from the Unions is more likely as a consequence of his appointment. This in turn could generate uncertainty and unrest in the wider economy which will have spin-offs for the property sector.
The Corbyn economic approach of spending us out of the debt crisis, combined with tax increases is, to many, also a bizarre approach. The approach is gambling that the spending will develop economic growth at a level where the increased tax receipts combined with the savings from a few targeted cuts like the removal of trident and nuclear weapons will be more than enough to remove the debt crises.
As yet however, the new Labour leadership team has not published any policies and past comments by members of the new Shadow Cabinet should not make commentators, economists or the business community react instantaneously.
Corbyn has however personally advocated the Right-To-Buy to be extended to private sector tenants renting from private sector landlords and in private rented accommodation as well as housing associations.
Corbyn has explained the reasoning behind this proposed policy:
“We know that Generation Rent faces an uphill struggle simply to get into long-term housing. We have seen some good ideas from Labour to establish more secure tenancies for renters. Now we need to go further and think of new ways to get more people into secure housing.
“So why not go with Right to Buy, with the same discounts as offered by way of subsidised mortgage rates, but for private tenants and funded by withdrawing the £14 billion tax allowances currently given to Buy to Let landlords?
“I believe this idea could open up the possibility of real secure housing for many currently faced with insecurity and high rents.”
For the moment, many people will decide that silence is perhaps the best policy when considering how to respond to the election of Mr Corbyn and the new Shadow Chancellor of the Exchequer, and Mr Corbyn’s right hand man, Mr McDonnell. At least until the new Labour leadership starts announcing what its policies actually are.
Meanwhile, the thoughts of many will be that Labour are likely to advocate more extreme left wing views and as a consequence be less of a threat to the Conservatives; leaving the Tories and the Liberal Democrats as the closer to centre parties. A move which seems on the surface to be to the detriment of Labour General Election aspirations.
But if Mr Corbyn can emotionally connect with all parts of his own party – and with the country, including parts of Scotland – to pose a real challenge at the next General Election, then it may be more than just a few Buy-to-let Landlords who will have reappraise their approach to business.
Editor 14 September 2015