It's very hard to know what more Theresa May can get wrong. Until she starts digging, that is. And then she does it again. Take this from this morning's Guardian:
Foreign buyers of properties in the UK will have to pay a new levy, in a renewed attempt by Theresa May to tackle the housing crisis.
With concern growing among senior Tories that the party has allowed Brexit to drown out a compelling domestic agenda, plans unveiled on Saturday night will see foreign buyers pay extra stamp duty to fund a drive to tackle rough sleeping.
What's wrong. Let me start with the superficial, and move in stages to the conceptual.
Superficially, this is just puff. Take two vaguely related issues; link them in a policy statement; say solving one will solve the other, and claim to have a big policy announcement for your conference speech. Except she hasn't, of course. These issues are not linked.
Foreign housebuyers do have a detrimental effect on the UK housing market, but that is not the cause of rough sleeping. The problem's caused by foreign housebuyers would be best solved in three ways. The first would be a substantial tax on empty, or near empty, properties used as second homes. Labour has not got near this with its tax on second properties used as holiday lets. Instead, the issue is about properties bought primarily for speculation. The issue here is that council tax is a mere incidental cost and the tax rate - although higher than for other capital gains remains low, and also very hard to collect from the offshore entities that are the legal owners of so many foreign-owned properties.
The issue is then forcing the open registration of the beneficial ownership of these properties; a tenfold increase in council tax on them; a significant increase in the capital gains charge on them and a refusal to permit changes in registration of title until that tax is paid; and, perhaps most important of all, an end to the domicile rule that still makes the UK a tax haven for so many people who can claim that the UK is not their natural home.
When it comes to the problem of rough sleeping, a small fund paid for with stamp duty will not solve the problem. The problem has been created by austerity, more than anything else, and May remains committed to that.
So let's become more conceptual. Suggesting links between revenues and spends is simply disguised tax hypothecation, and hypothecation is always a bad basis for taxation, especially when it is suggested that it will solve a problem which will continue even if the tax base that is supposed to pay for its solution disappears. It is time that politicians stopped this stupid game of linking revenue and expenditure.
To come to the core argument then; let's be clear that if rough sleeping is a problem in the UK then we are not dependent upon some additional tax paid by those foreign owners of properties in this country to solve it. It is an insult to the rough sleepers to suggest that is the case. It is an insult to our intelligence to suggest that is the case. And it is a sign of ignorance on Theresa May's part that she thinks the government cannot create the funds to solve this problem without having to raise additional taxation, when that is simply not true. If rough sleeping is a problem worth solving then the government already has the means to do so: it can simply vote to commit funds to the task, knowing that it can always create the necessary funds to do so, and that if the task is worth doing then, in this case, it will pay for itself by eliminating the cost that rough sleepers create. The solution is as simple as that and it is just wrong for May to suggest otherwise.
I am not sure what I dislike most about this announcement. The failure to think; the lack of compassion; the implicit belief that we are all dependent upon taxes paid by the rich or the sheer ignorance: they all rank as reasons to be disgusted. It's not just because of Brexit that we need some new political leadership in this country.
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There is another way to deal with the small number of properties bought primarily for speculation, and that’s to stop people being able to build properties for speculation, and that can be dealt with by going further back and stopping people buying land for speculation in the first place.
But once we’ve decided that speculation is permitted, it is arbitrary to come in at a later point in the planning-development-sale-end customer chain, and say ‘oh, no you don’t pal’.
As you say, Richard, just puff. Stamp Duty Land Tax is levied on a transaction. Only an annual tax can make any impact. Utterly stupid. Yet it’s the tories which introduced the Annual Tax on Enveloped Dwellings (ATED), i.e. houses owned by companies. It’s progressive – and progressing – it collects a significant amount (can’t find the figures at the moment) – there are substantial penalities for non compliance – it has minimal costs of collection. The best feature is that owners are responsible for the valuations and I’m not sure whether it is also self-declaratory. Why don’t they just extend that to foreign owners?
The issue of beneficial ownership is about democracy – we are entitled to know who owns the land which is our common inheritance. But completion of the Land Registry is not a precondition of implementing LVT, which is, of course, the simple solution. My preferred introduction would see the full collection of land rent on all land, with a gradually eroded concession to the owners of principle homes. Perhaps a price ceiling could also be imposed to cover the mansion owner. I’d also have a self-declaratory buildings tax for mansions.
There is now (at last) an All-Party Parliamentary Group on Land Value Capture – so there are some Tories who support LVT. I will write to them about this.
If this Government (or any Government) wants more affordable homes – especially Council homes, all they have to do is pay for the remediation of the countless ex-industrial brown field sites that blight our cities.
As part of Green QE, these sites could be cleaned up for residential use and purchased for local authorities who could then build enough homes or temporary accommodation to stop rough sleeping within 2-3 years. There also needs to be a new housing act that restores Councils duties to re-house the homeless along with the financial help to meet the challenge.
The brownfield site emphasis would take pressure off the green belt too.
My very capable Finance director (who sits on national bodies who work with the LGA) meets regularly with the CLG and his feedback is that this Tory administration does not like Council housing at all.` They talk the talk but do not walk the walk.
I can assure readers that there is no sincere desire in Mrs May’s party to solve this problem at all.
I don’t understand the reluctance to use Brown field sites for building housing or indeed other facilities such as sports complex.
In many cases there is considerable utilities connections already in place. It seems to be very “middle class” thinking that we should all aspire to move out to the suburbs and live on green belt land. It creates hollow cities and towns where there is nothing in the centre worth travelling to. In Edinburgh there has been a push to build student accommodation on brown field sites and indeed a new school was built on such land. But that seems the exception not the rule.
Even converting some brownfield areas into parks would be a step forward especially if they are derelict for a long time. But as ever it seems the sites are being held on to as land price speculation and it is profitable NOT to have anything on them. Look at the likes of land that Tesco and other supermarkets own so as to deter competition.
The issue is always the cost of cleaning up the pollution Doug. It’s very expensive. But people in the private sector would get jobs out of it, the firms in the private sector dealing with it would see their turnover increase and there might also be some innovation out of it too.
Ex Brownfield sites should be turned into social housing. There should be no RTB on them and they should managed by local authorities. And in the end people could be housed and the rents could pay off the debt over the long term (if that is how the scheme was ran).
I understand that there is legislation which prevents local authorities from buying land for development for a price which discounts ‘hope value’. This is really outrageous and must be scrapped.
Why would you be surprised. To re-work a line from Only Fools and Horses, “I can tell when Theresa May is saying something stupid – it’s when I can see her lips moving”.
Many things that the government should do (like preventing rough sleeping for instance) are so important that one shouldn’t work to a budget and trim the service to fit it, but work out what needs to be done/how much that will cost and then decided what needs to be done to accomplish it (in terms of resources etc).
A glaring example of the wrong-headed approach of this government (in supposedly a strong Conservative policy area) is in criminal justice, where the service was supposed to cope with massive cuts (40%?) with no change in outcomes! Truly that is criminal and dangerous.
When Thatcher was in power and busy slashing the social housing budget she went out of her way to block any work-around schemes to carry on building social housing. I know I was part of helping devise one. This was the start of the great Neoliberal onslaught that eschewed any attempt at joined up thinking to solve the nation’s problems. Prejudice was the order of the day and tough luck if you fell foul of it. The Tories know there are many voters as prejudiced as themselves who will carry on voting for them until it’s obvious the roof is about to cave in. It’s hard to tell when enough roofs will have caved in before voters say enough is enough. The stupidity emanating from the current Tory Conference suggests a long time!
I noted Hammond’s speech the other day.
In a word: Woeful.
His ‘vision’ is of a self-flagellating state. There is nothing else to call it. After all this time, after evidence staring him in the face that it does not work, he and his party are still addicted to austerity.
I suspect more than ever before that this is deliberate destruction : the Tories aim to fuck up everything no doubt in order to change who runs it and manufacturing the consent to hand it over to rent seekers.
And the biggest benefactors are likely to be the American corporations if/when there is a hard BREXIT.
Sadly, you are spot on
PSR “And the biggest benefactors are likely to be the American corporations if/when there is a hard BREXIT.”
For a chilling up-to-date insight into just how maliciously successful the American Neo-cons are – and what is in store for the UK – listen to Ralph Nader’s book-store talk given just a few days ago. He’s 84 and still passionately campaigning for social justice. He also throws down the gauntlet to all progressives to get involved locally. He’s living proof of Margaret Mead’s assertion: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”
Although the political process in the US is very different to here (at least theoretically more democratic) there are some useful lessons to be learned – if nothing else to scare us into doing everything and anything possible to stop the dangerous madness of a ‘No Deal’ Brexit.
While long (1h 9m) the time passes quickly because he has so much of interest to say – https://www.youtube.com/watch?v=OWxc_kYmPTE.
Thank you John D – I’ll give it a whirl.
The Dutch have a ban on a proportion of city centres being bought by foreign owners thus limiting the desolate people wasteland of Mayfair in the centre of Amsterdam.
The same works in Bermuda which also limits the properties that non bermudians can buy making renting an expensive option for the expat workers.
I am concerned about the American ruthless lot the Cer berus the black stones letting rip to coniving and conspiring to rip off the country yet again.
Yet they seem unmentionened in the press despite ripping up Irelands property owners and business owners and elsewhere they have only just started. Bad actors should be banned.
Have a look at this about Scotland:
https://www.commonspace.scot/articles/13347/experts-new-report-shows-scottish-govt-swamped-tragedyof-tory-welfare-reforms
I do not see this most cruel and awful of Tory administrations taking their foot off the pedal. Or should it be off Scottish and English throats?
So Scottish Tory leader Ruth Davidson is meant to be cool and ‘with it’, gay and having a child (good for her but none of that is any of my business nor is it relevant).
Big deal I say. What I’d like to know is what this ‘up and coming Tory’ has to say about this? Because its wrong and cruel and totally unnecessary.
Sorry Pilgrim,
Ruth the Mooth (as she’s often referred to north of The Wall) doesn’t do principles or policies. Instead she does photo ops, Bake Off, interviews where she discusses herself, her forthcoming family, the prospect of going on Strictly etc, anything but policies, so the answer to your question is that she’ll say nothing about it, just like she’s been dodging questions about the dark money funding given to the Tories for the 2017 General Election.
I can see why Tory Head Office were keen on developing the Ruth brand (for it’s all about branding) as she has, in spades, the quality most treasured by them: the ability to dodge questions and waffle extensively. The English, Welsh and NI may not know this but, for the 2017 GE, the Scottish Conservative & Unionist Party was rebranded as ‘Ruth Davidson’s Conservatives’ and had a single policy: no more referenda on Scottish Independence. Not a dicky bird about UK-wide problems like Brexit, immigration, economic mayhem, austerity, food banks, cutting of benefits etc and their impact on the population, just negative bellowing about stopping Scotland from deciding its own future.
You’ll perhaps have got the idea that I’m not impressed by her (!), but I’ll concede that she’s not stupid. That said, however, the overweening ego, the prolific U-turns on previous statements/positions, the general vacuity and lack of gravitas, simply mark her out as an opportunist, or as we say in Glasgow “a right chancer.”
There are two amendments to the Planning Bill going through the Scottish Parliament at the moment on the subject of land value capture and compulsory purchase, one weaker, one more radical (by British standards)
Their inclusion in the final bill will be voted on in committee on the 24th of this month.
I saw this in today’s Guardian and it summed up just how I feel:
https://www.theguardian.com/commentisfree/2018/oct/02/tory-conference-government-brexit
It does feel to me that we are being punished for 1997 (for daring to vote New Labour into power maybe?).
The glee with which the Tories have gone about their comprehensive destruction of our country since 2010 is beyond any doubt.
Never mind Marxists, Trotskyists and Occupy etc. The really dangerous extremists are in power right now.
They don’t like us ordinary people because we have the temerity to exist with low net worth.
The Tories are as anti-human, anti-life, anti-fairness as any robot Sky Net creation in the Terminator series of movies.
My view is that we should terminate these economic and anti-social degenerates as soon as possible at the next election.
I appreciate that this thread focuses on the PM. Nevertheless the BBC yesterday reported that the Chancellor proposed; “‘There is technology becoming available,’ said Philip Hammond when asked about solutions to the [Irish] border problem at the Conservative Party conference. ‘I don’t claim to be an expert on it but the most obvious technology is blockchain.'”
We are leaving the EU in a few months and this is the answer to the intractable Irish problem (solved at a stroke by remaining in the Single Market), led by this embarrassing apology representing itself as ‘serious’ Government. I do not think there is a better illustration of the relentlessly unavoidable fact that the Cabinet, clearly – and quite frankly – is completely, utterly out of its depth.
It is worth remembering what Theresa May told the Conservative Conference in her closing Conference speech in October 2016, in her rousing finale:
“let’s get behind the team of ministers — David Davis, Liam Fox, Priti Patel and Boris Johnson — who are working on our plan for Brexit”.
That worked out well. So why on earth would anyone place the least faith in a serial bungler who now uses her embarrassing, toe-curling haplessness to earn sympathy for ineptitude, and considers this frightening prospect inspirational, to close the 2018 conference on this unfortunate note:
“We stand at a pivotal moment in our history. It falls to our party to lead our country through it.”
There is the problem. Her party is “leading” through a policy of paralysed inertia. This year Theresa May could not actually invite anyone to “get behind” her ministers; it would be beyond comedy, or even farce. So she invites us to rescue her and her Government: “Our future is in our hands. Together, let’s seize it.”
A cold chill seizes the heart that the hands of May and her feckless crew are even now anywhere near my future, or yours.