Poor Liz and Kwasi. What Do They Do Now?...

Who would be in the shoes of Liz Truss and Kwasi Kwarteng?

I don’t mean who would like their power, pay and perks: quite a few people would be in line for those if the recent Tory leadership race is an indicator.

No, I mean who would be in their shoes ahead of a week of scrutiny (of their own making) at the Conservative party conference.

Do they continue with their gung-ho tax-cutting and high-borrowing agenda, with more rhetoric reminiscent of the Thatcherite era, and risk spooking the markets further? Or do they ditch the policy announcements and fill the coming days with uncontentious but unsatisfying platitudes, deflating the morale of an already-battered party faithful?

How Tax Cutter Truss and Calamity Kwarteng respond to that big dilemma will probably also frame how they respond to a smaller policy issue affecting our industry - rental reform.

With the new Tory leadership already on the back foot and at rock bottom in the polls, there appears no honeymoon period; and with any flippant comment likely to affect the value of Sterling, the party must approach this week with trepidation.

So in light of the new government’s immediate crisis, what will the Trussites say about rental reform?

Given the tone of the mini-Budget and the first comments from Truss at Prime Minister’s Questions 10 days ago, many provisions in the Fairer Private Rented Sector White Paper, and the accompanying Renters Reform Bill, might appear too ‘Nanny State’ for the new-look Conservatives.

And given that Labour has just nakedly stolen many of the White Paper measures - Decent Homes Standard, abolishing S21, pets in lets - might Truss be tempted to reshape her party’s rental reform agenda to be less pro-tenant and instead have some of that legendary clear blue water between it and her rivals?

Those wanting Tory policies to be more pro-landlord will take heart from the fact that Simon Clarke - the new Housing Secretary and ultimately the politician who would have to sign off a reshaped policy - is known to be one of an inner clique of four who the new PM wants to run Cabinet and government (the others being Kwarteng, Business Secretary Jacob Rees-Mogg, and Truss herself).

He appears to share the Truss faith that unpopular decisions now may pay electoral dividends later, and is thought to be unafraid of appearing much more pro-business than some of his predecessors at the Department of Levelling Up, Housing and Communities.

He is also surrounded with like-minded junior ministers at DLUHC, known for their pro-Truss sentiment perhaps more than their knowledge of housing.

So at first sight, those seeking a radical switch from the pro-tenant policies of the ‘old’ White Paper released just a few months ago might feel chipper right now.

They will also have noted that the two most vocal anti-landlord/anti-agent voices - Shelter and Generation Rent - have become significantly less pro-government in recent days.

Shelter and its chief executive Polly Neate, who had formed a surprising alliance with former junior housing minister Eddie Hughes over rental reform, have struck what some may consider to be a less supportive tone.

After the mini-Budget, Shelter tweeted that the form of growth it was concerned about as a result of Kwarteng’s announcements was growth in homelessness; and just a few days ago there was a tweet advocating that every party should follow Labour’s lead in promoting more social house building.

Likewise Generation Rent: it praised Labour’s commitment to a Renters’ Charter (“great words to hear” it responded) and the campaign’s director, a former Labour peer, spoke at an Islington Labour Party meeting - at the party’s invitation. And in recent days Generation Rent has also been fulsome in its praise for Labour's housing spokesperson Lisa Nandy.

Of course both groups held to the convention of formally welcoming the new Tory ministers and extending an invitation to work with them. But it would be odd, given Labour’s resurgence and new pro-tenant policies, if these campaigners did not spend more time courting the opposition than the government right now.

So the question is whether Truss, Kwarteng, Rees-Mogg and Clarke take their policy axe to rental reform with the vigour that they have to past Tory government economy policy. If they do, expect major changes - possibly with hints of this as soon as the Conservative conference this coming week.

Or, on the other hand, the remarkable criticism suffered by Truss and Co over recent days - when even the Daily Telegraph headlined ”Spooked lenders ditch new mortgages in pound chaos” - may make them settle for what they have got and avoid any repercussions. In other words, no change, to avoid a backlash.

It’s going to be an interesting week for the Tories at Birmingham…

*Editor of Letting Agent Today and Landlord Today, Graham can be found tweeting about all things property at @PropertyJourn

James
01 October 2022 12:30 PM

The idea that the current crisis is caused by “these two” fails in almost every analysis…. This is happening across the world, with inflation driven by the war in Ukraine…. So let’s not over do it shall we!?

Algarve Investor
01 October 2022 18:46 PM

Of course the current crisis was to do with them. There wasn't a run on the pound, mortgage products being pulled or the markets spooked before the unfunded, arrogant mini-Budget. Truss and Kwarteng nearly bankrupted the country - it's astonishing that you lay no blame at their door. Luckily the polls suggest you are in the minority

Richard Harper
07 October 2022 10:09 AM

A global meltdown of the banking system, is that what they're calling it now is it?
This crisis was predicted way back, right around Covid, when Boris weak handedly gave in to the policy of lockdowns. Anyhow, following this with more government expenditure, austerity and quantitative easing to try keep rates low instead of allowing supply and demand take course just made things worse. This would have made things difficult in the first stance but in the long run, with resilience, the economy would regain stability.
It all seems too staged to be true. There are a number of alternatives that could have avoided any crisis and I think they're just using the Ukraine war as an excuse for something else...