TD sues wealth adviser who left during money-laundering review

Christine Dobby, Bloomberg News

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It seemed like a typical dispute between a company and a former employee: Toronto-Dominion Bank sued wealth adviser Gregg Desmarais last month, claiming he and a colleague “abruptly” resigned and violated their contracts by luring away clients with millions of dollars of assets to competitor Raymond James Financial Inc.

But Toronto-Dominion told an entirely different story when it reported his departure to regulators in April: Desmarais voluntarily quit after the bank opened an internal review over suspected violations of anti-money-laundering policies, according to a disclosure the Canadian banking giant filed with the Financial Industry Regulatory Authority.

The notice came as Toronto-Dominion is under investigation by the U.S. Department of Justice, bank regulators and the U.S. Treasury Department over allegations that it failed to catch money laundering and other financial crimes at several of its U.S. branches. The lender has said it’s in the midst of a “comprehensive overhaul” of its anti-money-laundering program.

Toronto-Dominion declined to comment on the lawsuit against Desmarais, citing the ongoing legal proceedings. The internal review cited on his Finra profile “is not related to the bank’s broader AML investigation,” spokesperson Lisa Hodgins said.

She said the investigation disclosed to Finra was not concluded before Desmarais left the bank and that it is unrelated to the non-solicitation lawsuit, which doesn’t mention anti-money-laundering issues. 

“Mr. Desmarais denies TD’s baseless allegations,” Michael Roche, a lawyer representing Desmarais in the lawsuit, said by email. “I would also like to note that TD’s lawsuit against my client has nothing to do with TD’s AML issues.”

Representatives for Raymond James had no immediate comment.

Desmarais “abruptly resigned” and terminated his registration with the bank on April 25, according to Toronto-Dominion’s complaint, filed with the U.S. District Court in Connecticut. The case has yet to be heard on its merits, but there is a temporary restraining order in place barring Desmarais from soliciting additional clients of his former firm.

His Finra profile, under the category of “employment separation after allegations,” says: “An internal review was initiated of the Representative’s actions based on the suspected violation of firm Anti-Money Laundering (AML) policy by the Representative.” 

That type of disclosure event relates to situations where a broker voluntarily resigns, is fired or was permitted to resign after being accused of violating investment-related laws, rules or standards; fraud or the wrongful taking of property; or failure to supervise in connection with investment-related requirements, according to Finra.

Desmarais’s termination type is listed as “voluntary resignation” on April 24 and the product type involved is described as “banking products” other than certificates of deposit. 

Finra’s publicly available database, known as BrokerCheck, is intended to help investors make decisions about the advisers and firms they work with.

But the regulator also notes that disclosures posted on the website “may be pending or involve allegations that are contested and have not been resolved or proven.” It cautions that issues may ultimately be withdrawn, dismissed, resolved in favor of the broker or end in a negotiated settlement, “with no admission or finding of wrongdoing.”     

 

Alberta says advisory report shows federal electricity targets are 'reckless'

Amanda Stephenson, The Canadian Press

Power transmission lines and wind turbines as seen with the Rocky Mountains in the background near Pincher Creek, Alta., Thursday, June 6, 2024. , THE CANADIAN PRESS/Jeff McIntosh

The Alberta government pointed Tuesday to a new report from a federal advisory committee, calling it proof that Ottawa should abandon its "reckless" 2035 clean electricity targets.

But the chair of the committee behind the report said its recommendations are aimed at toning down the political rhetoric around clean power and helping Ottawa and the provinces find common ground.

The federally appointed Canada Electricity Advisory Council — a group made up of industry leaders, Indigenous leaders and executives — released a report Monday with suggestions on how Ottawa can accomplish its goal of decarbonizing the country's electricity grid.

The federal government, in its draft clean electricity regulations released earlier this year, has set a target date of 2035 to get the country's electricity generators to net-zero greenhouse gas emissions.

Alberta and Saskatchewan, which have limited access to clean hydroelectricity and are still heavily reliant on natural gas for electricity production, have both said the date is unattainable.

While Alberta has seen a rapid expansion of wind and solar power in recent years, the province has said the intermittent nature of renewable generation means natural gas is still required to ensure reliable and affordable electricity supply. 

While there are options to reduce emissions from natural gas power generation, such as carbon capture and storage, Alberta has said it will take time to deploy them. 

The province has said it will work toward a 2050 net-zero grid instead.

In its report, the Canada Electricity Advisory Council acknowledged that decarbonizing electricity production will be a "daunting" challenge in jurisdictions like Alberta and Saskatchewan.

The council recommends that these provinces receive targeted federal financial support, and suggests investment tax credits for emissions-reducing technology should be "skewed" towards the jurisdictions that most need the help to decarbonize.

The council has also recommended that the federal government be "flexible" around some of its expectations when it comes to these provinces.

"What we think is doable is getting to the ultimate 2050 goal ... We didn't stick to a particular time frame," said Philippe Dunsky, the founder of Dunsky Energy and Climate Solutions and chair of the federal advisory committee, in an interview.

"We didn't say it has to be 100 per cent done by 2035. I think there's a little bit of wiggle room."

Still, Dunsky said the energy transition is "happening, whether we want it to or not" and all parties involved need to work together in a "thoughtful, pragmatic way."

"On one hand, I don't think that we should be stuck on an absolute hard date. On the other hand, I don't think that we should use that wiggle room to get ourselves too much in the way of (what needs to be done)."

The Alberta government issued a statement Tuesday in response to the release of the advisory report, in which it said the report supports the province's stance that "one-size-fits-all" electricity regulations are unrealistic and setting it up for failure.

Premier Danielle Smith, who gave a speech Tuesday at an energy sector conference in Calgary, did not address electricity specifically but said the federal government's attempts to legislate climate targets — such as through its proposed emissions cap on the oil and gas sector — are not helpful. 

"When it comes to the issue of emissions reduction, we've got this," she said, adding Alberta's largest companies have made their own commitments to net-zero by 2050 and are exploring technology to help them get there, but it takes time.

"It's not necessary for the federal government to create uncertainty by putting in arbitrary timelines that are unachievable."

Federal Natural Resources Minister Jonathan Wilkinson told reporters in Ottawa on Tuesday that Alberta's response to the advisory report is "just politics."

He said the federal government has been listening to Alberta and Saskatchewan's concerns around the need for flexibility, and aims to release a revised version of its clean electricity rules later this year.

"What the (advisory council) report says is, we do need to move toward a clean grid, and we need to do so in a manner that reflects concerns around affordability and reliability," Wilkinson said.

"It's a good report ... that's exactly what we've been working on for a long time."

— With files from Mia Rabson in Ottawa

This report by The Canadian Press was first published June 11, 2024.

 

Military growing more reliant on contractors — a boon for CAE, chief executive says

Christopher Reynolds, The Canadian Press

CAE Inc. chief executive Marc Parent says a growing reliance on private contractors by Western armed forces — including Canada’s — bodes well for his company and global security, even as questions linger around spending and accountability.

Escalating strife and international conflict have sparked a military build-up that means governments contending with personnel shortfalls depend increasingly on private sector firms for everything from catering and construction to hired guns.

“Nobody’s happy about the rise of geopolitical tensions around the world. But what is happening for sure is that defence budgets are on the rise,” Parent said in an interview.

“Militaries literally don’t have enough uniformed personnel to be able to conduct their operations themselves … In Canada, they’re turning to private industry to be able to do more and more contracted services in support of the military.”

Last month, a joint venture between Montreal-based CAE and B.C.-based KF Aerospace secured an $11.2-billion contract from the federal government to train aircrews and provide 40-plus flight simulators for the Royal Canadian Air Force.

The 25-year deal represents a vast expansion of the simulator maker's previous role in RCAF training, as the partnership, dubbed SkyAlyne, takes on more responsibilities such as training support crews and procuring trainer aircraft.

“We’ll essentially be running the bases here,” Parent said, referring to air bases in Moose Jaw, Sask., Winnipeg and Portage la Prairie, Man.

“This is the Canadian government essentially transforming the way they do pilot crew training,” he said, adding that “pretty much everything” in that realm will be outsourced.

In a world of technologically complex warfare, companies can fill critical niches for armed forces already short of recruits.

Defence Minister Bill Blair has said the Canadian Armed Forces faces a shortfall of 16,500 members that could take years to resolve.

David Perry, president of the Canadian Global Affairs Institute, said tapping large corporations and niche outfits makes sense in order to draw on “specialized skill sets related to digital technology,” among other areas.

“The private sector unquestionably can be more efficient, more nimble, faster decision making,” Perry said.

He cited a "big push" toward privatization of publicly owned entities and services that dates back to the Mulroney government's sale of more than 20 Crown corporations, including Air Canada and Petro-Canada, starting in the late 1980s.

More recently, outsourcing practices have come under fire, sparked by the ArriveCan controversy, which revealed that a company at the centre of the development of the pandemic-era travel app received more than $100 million in federal contracts since 2011, according to Canada's comptroller general. 

Brown University’s Costs of War project argues that militaries in particular are spending more and more of their budgets on contractors with little accountability for how the funds are doled out. 

In a 2020 report, the Public Service Alliance of Canada claimed there is scant evidence that the billions of public dollars spent each year on defence contracts amount to an efficient use of funds. 

"The companies cited in the report have often found themselves in hot water, here and around the world, on issues such as human rights, health and safety and workers' rights," it wrote.

Canadian defence spending rose by more than two-thirds between 2014 and 2021, according to the Parliamentary Budget Office, with further increases since. Last year, the government announced $30 billion in new defence deals, mainly with U.S. firms.

For CAE's chief executive, however, the selection of Canadian companies for a critical training role shows how the state and the private sector can work hand in glove to bolster security at home and abroad.

"It's training for Canadians, by Canadians," Parent said of the recent deal.

The $11.2-billion contract from two weeks ago couldn't have come soon enough for the 77-year-old company.

Two days earlier, CAE had reported a half-billion-dollar net loss in its fourth quarter after massive one-time charges linked to its defence business, including a $568-million “goodwill impairment.”

"It represented more than we thought," Parent said.

Nonetheless, the segment represents a rising source of revenue at the company.

Defence contracts amounted to three per cent of CAE's revenue last year, but will comprise 15 per cent this year, he said.

Industry watchers also have an upbeat take.

In a recent research note on CAE, National Bank analyst Cameron Doerksen wrote: "The defence end market outlook remains supportive for 2024 and beyond as global military spending to address growing threats continues to increase — Ukraine war, China’s more aggressive defence posture, conflict in the Middle East being the major drivers."

This report by The Canadian Press was first published June 11, 2024.

Alberta landfill waste carbon capture project inks deal with Canada Growth Fund

Amanda Stephenson, The Canadian Press

A company proposing to use carbon capture and storage technology to create clean electricity from landfill waste has become the second to secure a carbon price backstop contract through the Canada Growth Fund.

Calgary-based Gibson Energy Inc., a publicly traded company that operates crude oil pipelines and crude oil storage terminals in North America, is developing what would be Canada's first waste-to-energy facility with carbon capture technology.

The Alberta facility would divert solid waste otherwise headed to the City of Edmonton's landfill and incinerate it to create electricity. Carbon capture technology at the site would trap the greenhouse gas emissions produced as part of the process, ensuring none enter the atmosphere.

Gibson said Tuesday it has reached a deal with the $15-billion federal Canada Growth Fund that will help it accelerate the development of the project. 

Under the terms of the deal, Gibson would own 50 per cent of the project, while the Canada Growth Fund would have a 40 per cent stake. Varme Energy, the Canadian subsidiary of Norwegian-based Varme Energy AS, will be involved in the development and construction of the project and will own the remaining 10 per cent stake.

Included in the deal is a carbon price assurance mechanism through which the Canada Growth Fund commits to purchasing 200,000 tonnes per year of carbon credits generated by the project at an initial price of $85 per tonne for a 15-year term.

This type of carbon offtake agreement, sometimes referred to as a carbon contract for difference, essentially guarantees that if the price of carbon falls below a certain level in the future, the Canada Growth Fund will pay the difference.

Proponents of carbon capture and storage, a process which traps harmful emissions from industrial processes and stores them safely underground, say these types of contracts remove some of the risk of investing in pricey emissions-reducing technology. They ensure companies will still be able to make money even if the existing industrial carbon price structure changes or is eliminated. 

This is because captured carbon doesn't have any value on its own as a product, but can lower a company's own carbon tax expenses by reducing its overall emissions. In addition, companies that deploy the technology can generate carbon credits to sell to big polluters looking to offset their own emissions.

The Canada Growth Fund, which was created in late 2022 by the federal government to help reduce the risk private investors assume when they invest in new technologies, has received approximately 100 proposals from companies exploring decarbonization projects. 

The Gibson Energy project is the fund's fourth investment and the second project to be awarded a carbon contract for difference.

"What I like about this project is it clearly fits the mandate of (the Canada Growth Fund)," said Patrick Charbonneau, president and CEO of Canada Growth Fund Investment Management Inc., in an interview.

"And that's to unlock projects that would otherwise not happen relying only on private sector capital."

Charbonneau said the Canada Growth Fund expects to have additional deals to announce in the coming months.

Gibson and its project partners expect to make a final investment decision on the landfill waste carbon capture project early next year, with a target start date in 2027. 

In an emailed statement, Gibson Energy's chief financial officer Sean Brown said the company has made its own commitment to get to net-zero emissions by 2050 and sees the waste-to-energy project as one way to advance that goal.

"It fits well with what Gibson seeks to do in our core business," Brown said. "It presents a platform with stable, long-term cash flows, and a potential opportunity for growth in the energy transition space."

This report by The Canadian Press was first published June 11, 2024

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National Bank to buy Western Canada rival for US$3.6 billion

THAT MAKES IT A REAL NATIONAL BANK; NOT JUST IN NAME ONLY

Christine Dobby, Derek Decloet and Paula Sambo, Bloomberg News

National Bank of Canada agreed to buy Canadian Western Bank for about $5 billion (US$3.6 billion) in stock in a tie-up of two of the country’s regional lenders. 

Montreal-based National will pay the equivalent of $52.24 a share for CWB, a premium of 110 per cent over the target’s closing price on Tuesday. The deal requires the approval of two-thirds of CWB’s shareholders and the Canadian government and is expected to close by the end of 2025.

For National Bank, Canada’s sixth-largest lender, the deal represents an opportunity to diversify its earnings away from Quebec, where it’s one of the most dominant financial institutions. Its stability has made it one of Canada’s top-performing banks over the past 12 months, with its stock rising about 21 per cent during that time. 

Now National Bank is using the strong valuation on its shares to acquire a weaker rival. 

“This transaction is about growth and brings together two great banks with a complementary footprint in personal and commercial banking, and supports our objectives in Western Canada and across the country,” National CEO Laurent Ferreira said in a statement.

National said it has identified $270 million in pretax cost and funding synergies.

Canadian Western has 39 branches and 65,000 clients, mostly in the provinces of Alberta and British Columbia. The bank has worked to diversify from its home province of Alberta, which is prone to the boom-and-bust cycles of the oil business. The firm opened its first branch in Ontario in 2020 and has also bulked up in other areas including equipment-leasing and wealth management.

But shares of the Edmonton-based lender have been trading at a very low valuation — less than 70 per cent of book value. Rising loan losses are a concern for Canadian Western — the key reason the bank missed analyst expectations for earnings in the fiscal second quarter. 

National plans to issue $1 billion in new equity. Quebec’s largest pension fund, the Caisse de Depot et Placement du Quebec, said it will help finance the deal by investing $500 million in National Bank via subscription receipts, which will make it the bank’s second largest shareholder. 

“CDPQ is proud to continue its long-standing commitment to National Bank by taking part in this transformative acquisition that will enable it to execute a new facet of its expansion plan,” Vincent Delisle, the fund’s head of liquid markets, said in a statement.

 

Trudeau's rival opposes capital gains hike, promises new tax cut

'OUCH' UNNAMED RIVAL IS LEADER OF HIS MAJESTY'S LOYAL OPPOSITION

Brian Platt, Bloomberg News

Canadian Conservative Leader Pierre Poilievre said he would vote against the government’s proposal to raise the capital gains tax inclusion rate, ending weeks of speculation about where he would land on the issue.

The vote on the capital gains measure on Tuesday passed easily with the support of the New Democratic Party and Bloc Québécois voting alongside Prime Minister Justin Trudeau’s Liberals.

But Poilievre’s statement ended debate over whether the leader — currently the favorite to win an expected election in 2025 — would vote in favor of the measure. Poilievre has promised to advocate for workers and not the business establishment, and repeatedly declined to say where he stood on the tax hike until Tuesday.

In his statement, Poilievre also promised that if he were elected, he would create a new tax cut that would reduce “the share of taxes paid by the poor and middle class while cutting tax-funded corporate welfare and cracking down on overseas tax havens.”

The statement did not provide any further details on what taxes Poilievre would cut, and did not explicitly pledge to reverse the capital gains hike.

Conservatives oppose the job-killing Trudeau tax hike on homes, health care, farmers, and small businesses.

Here's why.

Help me fight back: https://t.co/3024TDPvFj pic.twitter.com/zY2hUpw0Mt

— Pierre Poilievre (@PierrePoilievre) June 11, 2024

Starting June 25, the government will tax Canadian companies on two-thirds of capital gains, up from half currently. The change will also apply to individual taxpayers with annual gains over $250,000 (US$181,000). 

Capital gains taxes don’t apply to the sale of a person’s primary residence. The rules also include exemptions or reductions for owners of certain small businesses, farms and fishing operations.   

Trudeau and Finance Minister Chrystia Freeland have attempted to frame the capital gains hike, first announced in their April budget, as a tax on the wealthy in order to fund policies for housing construction and school food programs.

In his statement, Poilievre declared the capital gains raise a “job-killing tax” that will “drive billions of dollars of machines, technology, business and paychecks out of our country.”

Instead of promising to repeal the tax if he’s elected, however, Poilievre said he would create a “tax reform task force” made up of “entrepreneurs, inventors, farmers and workers.”

The task force would recommend how to “lower taxes on work, hiring and making stuff,” Poilievre said, and simplify existing tax rules.

Tuesday’s vote was on a motion to enshrine the main parts of the hike in the capital gains inclusion rate. Over the summer, the Department of Finance will release draft legislation that will address other parts of the government’s policy, such as the entrepreneur’s incentive, and a final version of the bill will likely be introduced in Parliament in September. 

Capital gains tax hike a start but Canada needs more revenue, IMF says

Curtis Heinzl and Laura Dhillon Kane, Bloomberg News

The International Monetary Fund (IMF) says Prime Minister Justin Trudeau’s capital gains tax hike improves the system’s neutrality and won’t significantly harm investment or productivity growth, but his government must do more to boost revenue and tighten fiscal policy.

The increase to the capital gains tax inclusion rate — to two-thirds from one-half — has drawn the ire of businesses that say it will worsen an already dismal investment landscape. In its concluding statement of a staff mission to Canada, the IMF found that outcome is unlikely.

However, it said Canada should consider other measures, such as boosting the goods and services tax rate while raising a related tax credit to shield the poor. Tighter fiscal policy would aid the Bank of Canada’s efforts to cool inflation and restore buffers that existed before the pandemic, it said.

“Canada’s fiscal track record continues to compare favorably to many other advanced economies — it was quick to consolidate after the pandemic, has maintained relatively low deficits since then, and is targeting further deficit reduction,” the IMF said in the statement.

“That said, and against the backdrop of a modest rise of federal and provincial deficits during calendar 2023 and 2024, some additional fiscal consolidation would not only help stabilize inflation but also help to restore fiscal space that was used during the pandemic.”

Debt remains low in international comparison, but further consolidation will put Canada in a stronger position to address future downturns as well as structural spending needs related to climate, defense, health care, and other critical areas, the IMF said.

Finance Minister Chrystia Freeland introduced a motion in the House of Commons on Monday to begin the legislative process of hiking the capital gains tax, first announced in April’s budget. The new inclusion rate will apply to all gains made by companies, with some exceptions, and gains of more than C$250,000 by individuals, starting June 25. 

She has said the measure is necessary to raise money for housing and other government programs. “Canada could finance these investments by taking on more debt, but that would place an unfair burden on younger generations,” she said at a news conference Monday.

Lawmakers are expected to vote on the motion as soon as Tuesday.

The IMF suggests the bleak homeownership outlook for young Canadians requires more work from governments. New restrictions on temporary visas, such as those for international students, will help ease some of the pressure, but “the underlying challenge of boosting supply remains.” All levels of government could do more to promote social housing, it said. 

The report also weighed in on a persistent source of political debate in Canada: the carbon tax. The IMF said carbon pricing is of essential importance in delivering on Canada’s commitment to reduce 2005 emissions by 40 per cent to 45 per cent by 2030. Calls to replace the fuel charge with technology subsidies “would imply substantially higher costs of achieving climate goals.”

Better coordination of Canada’s many federal and provincial policies promoting carbon abatement could improve cost effectiveness, it said. 

“A holistic review of the system should be considered, along with the creation of a single body to advise the government on climate policy,” it said.

The body also encouraged greater transparency from officials, saying the Bank of Canada ought to consider publishing more information about its forecasted policy rate path.

 UK

Labour’s disappointing manifesto U-turns

“Labour has abandoned plans to bring back the pensions lifetime allowance, in an £800mn U-turn which will be welcomed by wealthier savers including hospital consultants and headteachers,” reports the Financial Times’ Deputy Political Editor Jim Pickard.

A Momentum spokesperson pointed out that these were bad political choices – especially given that free school meals would cost only £1 billion.

The U-turn is the latest in a series that have emerged since the agreement of Labour’s election manifesto last week. The Clause V meeting was criticised for notably failing to include in the manifesto the introduction of free school meals for all primary school children and the scrapping of the two-child benefit cap – both considered to be key drivers of child poverty.

A Momentum spokesperson said: “We’re deeply disappointed that the Starmer Leadership didn’t take up proposals for free school meals and scrapping the two-child benefit cap, which could easily be funded by new taxes on the super-rich. Under the Conservatives and their austerity regime, more than four million kids are suffering in poverty. We need to kick out not just the Tories, but Tory policies too. Standing alongside child poverty campaigners and friends across the labour movement, we will continue to push for these policies, which represent the essence of real Labour values.”

Keir Starmer resisted both policies, despite concerted pressure from education unions, Labour MPs, child poverty campaigners and even the Archbishop of Canterbury. Yet with the Liberal Democrats now committed to universal free school meals, campaigners are warning Labour of being “outflanked” on child poverty.

The latest Government figures show that 4.3 million children were living in relative poverty as of 2023. Experts say that scrapping the two-child benefit cap, introduced under the post-2015 Conservative Government, is the single most effective measure to tackle child poverty, alleviating poverty for over a million children. Resolution Foundation analysis found that low-income families are losing around £3,200 a year for any third or subsequent child born after April 2017, with six in every ten affected families containing at least one adult in work.

Food Foundation analysis has found that 900,000 children who live in poverty are not currently eligible for free school meals. London Mayor Sadiq Khan was re-elected last month on a pledge for free school meals.  A recent poll of parents found that more than three in four back free school meals for all primary school children, while an Opinium poll last month found that 39% of voters would be more likely to back Labour if they committed to scrap the two-child cap. Both policies could easily be funded through a modest wealth tax.

Kim Johnson, Labour candidate for Liverpool Riverside, said: “The Tory attacks on the working class and public services have driven record rises in destitution and an explosion in in-work poverty. Schools are running food banks, nurses are using them. In the fifth richest economy this should concern and outrage us all. I’ve long-called for policies that will reduce child poverty and inequality, and with a Labour government imminent we need to lay out our plans to tackle child and in-work poverty. Our New Deal for Workers is a great start, but we need to go further and roll out universal free school meals and lift the two-child cap on benefits, policies now supported across Labour’s political spectrum including by Gordon Brown and Torsten Bell. I can think of no greater priority.”

Kate Dove, Momentum Chair, added: “Sadiq Khan has shown the way for Labour. Policies like free school meals are popular and more urgent than ever, amid the Tory child poverty crisis. Labour cannot simply promise a ‘strategy’ on this – we need bold policies like free school meals for all and the scrapping of the two-child benefit cap. That’s what real Labour values look like.”

New research from End Child Poverty with Loughborough University highlights the scale of the issue. Two-thirds of election constituencies have a child poverty rate of 25% or more. In these areas at least one in four children is living in poverty. The North of England, Midlands and Wales are particularly affected.

A further U-turn emerged with the finalisation of Labour’s manifesto – the dropping of House of Lords abolition. A Momentum spokesperson commented: “This is yet another disappointing Starmer U-turn. The House of Lords is an anti-democratic institution well past its sell-by date. Years of Tory cronyism underline the need to scrap a system based on patronage among our political elite. Keir was right to pledge to abolish it in 2020 and again in 2022, following strong, detailed proposals from Gordon Brown. But once again, major progressive reforms have been junked by a Labour Leadership which rightly pledges change but seems allergic to enacting it.”

Image: Creator: Labour Party | Credit: Labour Party. Copyright: Labour Party. Licence: CC BY-NC-ND 2.0 DEED Attribution-NonCommercial-NoDerivs 2.0 Generic

JUNE 10, 2024 LABOUR HUB 

 UK

How a Labour Government could solve the Housing Crisis

11th June 2024Leave a Commenton How a Labour Government could solve the Housing Crisis

“There can be no resolution to the housing crisis without a government strategy to deliver a large scale council house building programme that will provide decent, secure and genuinely affordable social rented homes.”

The Labour Campaign for Council Housing sets out what an incoming Labour Government must do to address the housing crisis

We are in the grip of a housing crisis which, due to a lack of any political will to address it, is spiralling out of control. Millions of people are suffering from the appalling consequences of the lack of decent secure and genuinely affordable housing. Shelter has recently stated that one in three people are now impacted by the housing crisis. That ‘s 17.5 million people across the country.

There can be no resolution to the housing crisis without a government strategy to deliver a large scale council house building programme that will provide decent, secure and genuinely affordable social rented homes to meet the need in our communities. We are campaigning to ensure that the Labour Party leads the way in ensuring that delivery.

The Chartered Institute of Housing ‘s 2022 UK Housing Review states, “the Right to Buy has become a strategic failure in England and, unless reconsidered, the policy will continue contributing to social disadvantage and exacerbating inequalities. In response to Tory proposals to extend right to buy the Chartered Institute of Housing said, “We are at a point of crisis in this country, with over 1.1 million households on waiting lists for social housing. We need more, not less, affordable social homes.”

The incoming Labour government should draw up a long term housing strategy backed by appropriate levels of government funding which must include: fully funding 150,000 social rent homes a year, including at least 100,000 council homes with secure tenancies; fully funding the retrofitting of all council housing to address fuel poverty, the climate crisis and to improve the quality of existing homes; invest in Direct Labour Organisations to create well paid, unionised jobs and apprenticeships to deliver this; ending the disastrous right to buy policy; reviewing council housing debt to address the under-funding of housing revenue accounts;  giving power to councils to license and tax holiday homes and AirBnBs.

Labour’s 2019 manifesto contained a commitment to build the council homes we need and we want the next manifesto to retain that commitment. The 2019 manifesto said, “The only way to deliver everyone’s right to a good home is to build publicly funded social housing. Labour will deliver a new social house building programme of more than a million homes over a decade, with council housing at its heart. By the end of the parliament we will be building at an annual rate of at least 150,000 council and social homes with 100,000 of these built by councils for social rent” and “We will stop the haemorrhage of low cost homes by ending the right to buy”.

Five years later, with a worsening crisis of affordability, it makes no sense to dilute that policy.  Why do we need 150,00 social rent homes including 100,000 council homes? The outgoing government had a target of building 300,000 homes a year to meet demand. The rate of house building has increased significantly in recent years, but year on year there has been a failure to build genuinely affordable homes at the rate we need. In view of that failure to deliver, we called for 50 percent of those 300,000 homes to be social rented. Our manifesto commitment was hugely welcomed when it was announced in 2019, not only within the Labour movement but by the general public, housing campaigns, housing and homelessness charities and the housing sector. Any future Labour government should adopt a similarly ambitious pledge.

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• You can follow the Labour Campaign for Council Housing. You can follow them on Facebook and Twitter/X.
• This article was originally published by Labour Briefing.

 

The environmental stakes are high on 4th July

11th June 2024Leave a Commenton The environmental stakes are high on 4th July

“Far from being a period of “stability” after chaos, we are heading into an even more tumultuous five years.”

By Paul Atkin, Greener Jobs Alliance

In a recent survey by IZA, 83% of people in the UK said they wanted more action from the government to stop climate breakdown.

The climate vote survey shows that not a single Conservative MP has a good voting record on climate and their government has gone out of its way to try to mobilise people against action on it.

The fewer of them that come back, the better.

Whoever you vote for, the next government will be facing an acceleration of the degeneration of our environment, a divergence between current plans and targets that are both necessary and legally imperative, an increase in the costs of adapting to the impacts that are already occurring; and an international context in which the United States, which mainstream parties in the UK tend to defer to, could be going full rogue state on climate alongside its militarisation drive if Donald Trump is re-elected.

Far from being a period of “stability” after chaos, we are heading into an even more tumultuous five years. And, as Mike Childs, head of science, policy and research at Friends of the Earth, puts it:

“If Labour forms the next government, they will have to produce a comprehensive and lawful climate plan that meets our domestic carbon budgets and our international commitment to reduce emissions by two-thirds by 2030 – or face possible legal action if it falls short. Warm words on how to tackle an overheating planet are not enough. We need urgent action now.”

We will need massive pressure through the labour movement and throughout society to back that up. Buckle in!

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• This article was originally published by the Greener Jobs Alliance (GJA) June 2024 Newsletter – you can read the newsletter in full here.
• Paul Atkin is the editor of the GJA, you can follow them on Facebook and Twitter/X.