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Labour drops plan to allow tenants to buy out private landlords

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Via Financial Times

Labour has dropped a plan to give a new “right to buy” to private tenants amid fears that the policy was not workable, according to party figures familiar with its election manifesto.

But the 2019 manifesto will include other new radical policies including giving councils greater freedoms — and cash — to introduce more state-owned bus services to compete with private operators.

Members of the shadow cabinet and union leaders gathered in central London on Saturday to sign off Labour’s list of pledges ahead of election day on December 12.

The manifesto, which has been overseen by policy chief Andrew Fisher, is set to be the most leftwing in Labour’s recent history. It will include mass nationalisations, £400bn of new state borrowing, a ramping-up of public spending and — unless it is removed at the last minute — a £300bn raid on the shareholders of large companies to the benefit of workers.

Labour will also promise a revolution in the labour market by introducing sectoral collective bargaining, promising a 32-hour working week by 2030 — albeit voluntary — and banning zero-hours contracts.

Senior figures involved in the process said that the private right to buy, floated by shadow chancellor John McDonnell two months ago, had been dropped.

Mr McDonnell told the Financial Times in an interview in September that the policy would not be complicated and that the government could set a “reasonable price” for tenants to buy out their landlords. The idea prompted alarm among many of Britain’s nearly 3m buy-to-let landlords.

One party aide said that the shadow chancellor had been forced to drop the idea because it proved too complicated. “I can see why John was pushing it but at the same time the practicalities got in the way,” the person said.

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The manifesto will also include a plan to encourage local authorities to take more bus services out of the hands of private companies by giving them the funding to provide free travel for under-25s on council-operated routes, according to figures familiar with the document.

One party insider said that this could save millions of young people up to £1,000 a year on bus travel — at a cost to the Treasury of over £1bn a year.

The policy is likely to be paid for by using some of the revenue from vehicle excise duties.

The Labour party is seeking to shift the election debate away from Brexit, where its position — offering a second referendum — has failed to resonate with most Leavers and Remainers.

Instead it wants to focus on a major increase in tax and spending and a swath of nationalisations designed to bring utility industries back into public control.

Industries earmarked for nationalisation include water companies, the railways, Royal Mail, National Grid, private finance initiative schemes and — as of Thursday night — the broadband arm of BT, Openreach. Some shareholders are already threatening legal action if — as expected — their stakes were to be nationalised at below market price.

Labour has also discussed the idea of nationalising the Big Six energy companies, a policy which was passed at the party’s annual conference in September, although that commitment is not seen as a priority by the shadow Treasury team.

Likewise several other policies passed at the conference are destined not to end up in the manifesto in their original form.

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Delegates backed several pledges including one on immigration that included free movement of EU citizens after Brexit, a 2030 net zero-carbon target and a plan to effectively scrap private schools.

Mr Corbyn’s team is looking for ways to respect the spirit of the conference vote on immigration but is looking to pare back on free movement — amid concerns from senior figures such as Len McCluskey, head of Unite the Union, who believe the policy could lose working class votes.

On the 2030 net-zero carbon target the manifesto is expected to use more delicate language that would commit Labour to working towards a path to hit that goal.

But it will still commit a Labour government to eradicating all sales of new petrol and diesel vehicles and decarbonising the energy network by that date.

Even some committed environmentalists blanch at the challenge of hitting the target in a decade: it would involve large-scale state intervention to replace all fossil fuel power plants, petrol and diesel cars, as well as millions of household gas boilers at a breakneck pace.

The manifesto is also expected to water down the conference vote that would effectively have abolished private schools by withdrawing charitable status, slashing tax exemptions and seizing control of all “endowments, investments and properties” held by private schools.

The prospectus is instead expected to limit Labour to ending tax exemptions and withdrawing charitable status from independent schools. Senior figures argued that advocating the stripping of all assets held by private schools went too far.

New features since the last election in 2017 are likely to include “inclusive ownership funds” which would transfer 10 per cent of the shares in every major company from shareholders to workers over a decade. Law firm Clifford Chance has estimated that would involve the state appropriation of about £300bn of shares.

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The policy would apply to all UK-based companies with more than 250 staff but it is not yet clear whether it would definitely apply to foreign businesses and private as well as public enterprises.

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