COMMENT: The Fool - The dead hand of government

Wednesday 19 February 2020

December’s UK election result was the latest in a series of resounding victories for ‘populist’ agendas in recent years, including BREXIT, Trump, various right-leaning European governments, and the ascension of Boris himself to his seemingly anointed position of PM.

What these victories have also represented is the continued rejection by voters of overtly socialist policies, predicated upon greater state interference in people’s lives, and, as it turns out, unfulfillable promises of benefits for which it appears somebody else other than the recipient will pick up the bill.

With the Labour Party, and their Union paymasters, seemingly on course to elect a ‘continuity-Corbyn’ candidate, desperate to follow the policies which have cost them the two most recent general elections, it seems our left-leaning friends really do struggle with the dichotomy of ‘stuff our constituents really should believe in’, and ‘stuff that is likely to get us elected'.

Despite spending less time with his internet fulminating about the injustice of it all in recent years, it’s nice to see that Jersey’s very own angry young man, leader of the Popular Democratic People’s party, self-confessed Labourista, and our Housing Minister, hasn’t thrown in the proverbial towel of righteous justice just yet, despite events in the UK.

In a series of proposals due for publication in the next two to three months, our preening progressive is once again promising to take it to the Man. In the line of fire this time are greedy landlords, who have the temerity to make their properties available for rent at prices he believes are too expensive. How very dare they?

Pictured: Are landlords setting their prices too high? That's the view of some.

In most un-ministerial language, our diminutive democrat has promised to stop landlords shafting tenants by bringing in rent tribunals to decide whether a private sector tenant’s rent rise is ‘fair’, and banning various constraints landlords might impose upon those hoping to rent their properties. Properties, he goes on to tell us, the majority of those landlords do not maintain. In the words of Sir Humphrey Appleton, its “a brave position to take, Minister”.

One might mistakenly think that he felt antipathy to those who provide so much private sector accommodation, and on whose future co-operation you would think he would depend if the island is to house its growing population?

This is of course exactly the type of proposal that voters have so enthusiastically rejected recently: the ever-increasing attempts at control of the private sector by the dead hand of government.

It would be difficult to argue against the fact that when the government is the one providing accommodation, then they should be the ones who get to set the appropriate price. It’s also essential to have some sort of redress for private sector tenants whose accommodation, through no fault of their own, falls into disrepair. 

What is difficult to understand is why the Minister thinks it is appropriate for the government to dictate to people who HAVE PUT THEIR OWN CAPITAL AT RISK to provide private sector accommodation, what the value of that accommodation should be? Assuming that the property is safe and inhabitable, the establishment of a fair price should be no more complicated than:

Landlord – “My price for this property is X”

Tenant – “I will / will not take it.”

Landlord – “That’s good / a shame. I’ll let the new tenants know.”

The tenant either moves in, or chooses to search for another property which they consider to be appropriately priced. What the government can add of any value to that process is difficult to comprehend. 

In a further misunderstanding of how the free market works, the Minister goes on to refer to rent rises above the general rise in prices as “fake inflation,” as if the only differentiating factor between the value of properties in the future should be the rate of inflation. 

What greater state interference with the process will, of course, do is to deter new or existing property owners from renting out their properties, leading to a reduction in supply. What the Minister, with what appears to be a shaky grasp of economics, will no doubt fail to understand is that a reduction in the supply of something leads to one thing, and that is a rise in prices. So, less choice, higher rents, and the only winners being the new tax-funded Public Sector employees tasked with running the Minister’s ‘Rent Tribunals’, and heavy-handed ‘enforcement officers’ the Minister no doubt envisions dispensing righteous justice to those evil landlords. 

Pictured: The Fool suggests government 'interference' could damage supply in the local property market.

So, if I have this right, what we get is the demonisation of those who dare to risk their own capital in search of profit, more people being forced to rely on the state, more public sector employees and more taxation to fund a bigger, more intrusive government?

You have to wonder whether certain people ever learn.

n.b. If anything good has come out of these proposals, it’s that I’ve just realised that I am getting shafted by ‘fake inflation’ on my mortgage, food, car, clothing, telephone, and parking. Where’s my tribunals?

This article first appeared in Connect, which you can read online by clicking HERE.