Under The Guise Of Unintended Consequences


Sometimes the fruition of a carefully laid plan arrives under the guise of unintended consequences.

In the UK the Conservatives under Margaret Thatcher declared that one of the three pillars of the Welfare State no longer applied to a modern society like Britain.

The three pillars are free state education, free health care, and affordable state-owned housing rented to citizens with a guarantee of housing for life.

Cheap package holidays and cheap good in the shops changed the British character.

The Conservatives under Margaret Thatcher introduced a Right To Buy for tenants of Local Authorities. Tenants could buy their Council houses at a discount reflecting the years they had spent paying rent.

Now everyone could move into the mainstream. Society was dead and individuals ruled. Everyone wanted to be a capitalist and now they could be by owning their own home.

Well, this new class of home owners could be said to be capitalists if they judged by the fact that they owned a property.

But not if they were judged by whether they had any cash, any real buying power.

Property prices rose in the years following, and at the same time the Government loosened the regulations around who could borrow on credit and for what purpose.

When tenants (now property owners) fell into credit card debt, the way out was simple – buy another property with a bigger mortgage or remortgage their existing properties with a larger loan.

When property prices fell and people lost their homes, people with more borrowing power bought them up to rent them out, assisted by tax incentives on mortgage repayments.

After some years the Government removed the tax relief on ‘Buy To Let’ mortgages, with the result that those properties were and are being snapped up by people with even more borrowing power.

They are being bought by people who have enough resources that they don’t need mortgage tax relief to make the sums work for them.

The result of forty years of Government policy has been to widen the gap between the haves and the have nots – and create a new feudal class for the 21st century.

The policy has brought to fruition the desired consequences of a long-term plan masquerading as unintended consequences.