Jeff Salway: No truce in battle of tenants and landlords

HOPES that Scotland’s new deposit scheme would usher in an era of harmony between tenants, landlords and letting agents would appear to have been premature.

The scheme is designed to reduce aggravation by placing deposits in a separate scheme and supplying an independent mediator to rule on disputes.

If anything, however, the new rules have simply sent the warring parties onto new battlegrounds.

Let’s be clear: most relationships between tenants and landlords and/or letting agents are constructive and positive. But where money is involved there will always be conflict.

There are suggestions that the difficult economic climate has increased tensions, particularly where deposits are concerned. The tenancy deposit scheme, which started operating in July, is long-overdue protection for tenants and creates a more level playing field.

We’ve also had the Scottish Government’s clarification of what is and isn’t lawful in terms of upfront charges.

Yet in their efforts to circumvent the changes, some unscrupulous landlords are creating new problems. Take the increase in check-out fees, for example, where tenants are being asked to pay up to £500 to ensure they get their deposit back.

Another issue raising its head once more is that of tenant referencing services. Landlords are lobbying MSPs for a register of tenants, doubtless motivated partly by the time-consuming requirements of the deposit scheme. The intention, notionally, is to help protect landlords by providing a comprehensive blacklist of dodgy tenants. In some cases it will be tenants who need protection, however, given the loose governance of such services.

Private tenant reference companies already offer databases where landlords can rate previous tenants, without the latter’s knowledge or consent and without verifying the accuracy of the information. The information provided can include personal details of their tenants, such as address histories.

Resentment will invariably grow among landlords unhappy with the clampdown on upfront charges and the costs of complying with the deposit scheme. Tenants sadly face some form of backlash over the coming months, with higher rents on the way and calls for a register of tenants set to intensify.

Tough talk on tax is hot air

DO YOU remember when we all agreed with Nick? It’s a while now since that brief period when the Lib Dem leader offered such a seemingly compelling alternative to the status quo that David Cameron and Gordon Brown sought to hang on to his populist coattails.

Clegg found more than a few people nodding in assent last week when he called for the UK’s wealthiest to pay more tax. The Deputy Prime Minister said it would not be “socially or politically sustainable or acceptable” if the burden of the economic problems were not shared more fairly.

You don’t have to be a rabid socialist to agree with that, and support for a one-off tax on the wealth and assets of the richest 10 per cent won widespread support when YouGov surveyed voters on the issue two years ago.

I certainly agree with the broad point. The level of inequality in the UK is unacceptable for such a rich country and it is only becoming more stark.

In terms of tax, however, the problem is less that the richest aren’t taxed enough and more about their unerring ability to avoid paying it. It’s estimated 
that the UK loses some 
£120 billion a year through tax avoidance and evasion. Yet far too little is being done to ensure that society’s richest contribute what they’re supposed to.

George Osborne has described “aggressive” tax avoidance as “morally repugnant” and has pledged to introduce a general anti-avoidance rule (GAAR) after a report by Graham Aaronson QC.

When comedian Jimmy Carr inadvertently helped shine the spotlight on tax avoidance earlier this summer, the GAAR was wheeled out as the government’s big answer.

Experts are far from convinced, however. The Chartered Institute of Taxation, no less, was uncharacteristically blunt when it warned that the celebrity tax-dodging examples highlighted by the media would not be caught by GAAR.

The government has talked tough on tackling tax havens and closing loopholes, but the reality is quite different. Clegg is right about inequality and fairness in taxation, but the feeble coalition for which he is largely responsible continues to let the rich off the hook.