The FT’s Merryn Somerset Webb comments today on the sale by the City of Bristol to the Bristol Port Company of the freehold of the port at an apparently knock-down price, with the mayor appearing to justifying going ahead with the deal against the opposition of the city council who favoured a higher offer from a third party on the basis that the company were good tenants of 20 years standing.
Ms Somerset Webb declares that her interest in the story arises from its parallels with David Cameron’s support for housing association tenants being allowed to buy their homes at heavily discounted prices and the Scottish Land Reform Bill which is “jammed with right-to-buy clauses and power transfers to ‘communities’. “ She goes on to observe:
“Interesting, isn’t it? These examples of wealth transfer from right-to-buy all come from different directions and political positions but they all suggest the same thing: a convergence around the idea that owners shouldn’t have exclusive ownership rights.”
She continues by expanding her argument to rising real wages in countries around the world arising both from market pressures to changes in government policy. She notes that she wrote a column here a year and half ago where she:
“talked about just how much of a “boss’s world” ours has become over the last 20 years — the share of corporate output going to profits (and hence to shareholders) had soared and that to workers collapsed……. At the time I noted that these swings in the relationships between profit and labour — or tenant and landowner — take decades to play out, but I felt we were seeing the same signs of a shift as we saw back in the 1960s when the government was ‘irrevocably committed to doing something for the low paid’.”
The primary purpose of her article is actually to suggest that these shifts are good for the global economy because they are likely to transfer income to wealth to people who are more likely to spend it. However, one of the other points she has the effect of making is that the rights that go with ownership of the shares of a company and the rights that are accorded to workers in their employment contracts (which for some people a few centuries ago would have been capable of being bought and sold) and the income flows that go with them, are subject both to general exogenous effects and to the outcome of political action.
Ms Somerset Webb is writing this in her column for private investors and appears to be warning her readers about to recognise that their property rights are not immutable and sacred but are ultimately subject to the will of government, responding to public pressure:
“With tenants getting increasingly angry about our dysfunctional property market and governments and councils across the UK clearly all for right-to-buy, is it really safe to assume that landlords will keep the rights they currently think they have over their rental properties?”