Ray Boulger: Labour report is too extreme even for Jeremy Corbyn
The proposals made in last week’s Labour commissioned report are so radical that not even the current left-leaning leadership would take them all on board, said Ray Boulger, senior technology manager of John Charcol.
Boulger criticised the Land for the Many report‘s suggestion that banks should be encouraged to lend less money secured on property and more to people or businesses they consider to be higher risk.
He warned that this could cause banks to get themselves into financial difficulties, like US banks before the global financial crisis.
Boulger said: “I find it hard to believe that even the current Labour Party would adopt all of the proposal in this, though they would likely adopt some of them.
“When it comes to the election if significant parts of the report are adopted as Labour policy it would give the Conservative party plenty of ammunition to hit them with, particularly the suggestion that banks should be encouraged to lend less secured on property and more to people or businesses they consider to be higher risk.
“Whilst I always like to see the banks being more accommodating to SMEs, I understand why they’re cautious – startup business are clearly more risky and banks don’t have the same collateral.”
He added: “It’s worth remembering that many of the problems in America before the financial crisis can be traced back to the government telling banks to lend to people they don’t think are creditworthy.
“Effectively that is what this report is saying; you should lend to people who are not creditworthy.
“Lessons need to be taken from the run up to 2008-9.”
Boulger took a swipe at the report’s Common Ground Trust idea, which would be a publicly backed institution that would purchase land beneath houses and lease it back to those who own the bricks and mortar to make homes cheaper to buy.
He said shared equity could achieve the same outcome in a simpler way.
Meanwhile he pointed out that the land value of homes is extremely variable depending on what part of the country the property is in.
He said there is merit to the suggestion that tenants who qualify for housing benefit should be put into the social sector.
However, he accused the report of talking about buy-to-let landlords like they are the “scum of the earth”. He defended landlords, saying they provide a service that a significant proportion of the population relies upon.