I can't avoid the charge of being middle class. I am. And I understand, to some degree, the middle class desires in life. The most pressing of these, as far as I can see, is that the middle classes want their children to enjoy what they enjoy: indeed, it is their aspiration that they be middle class too. It is in many ways a daft aspiration, depriving children of choice and forcing them into treadmill education, but that's a debate for another place and another occasion. The fact is, that's what they seem to want.
So Will Hutton was on target when he wrote in the Observer this weekend that:
At a gathering of my wife's family last weekend I was sharply reminded of the generation gap when it comes to property. The over-35s are winners with their cushion of equity, which grows vast the nearer they are to pensionable age; the under-35s have debts that make them feel fearful at becoming losers in the property jungle.
His solution?:
The simple answer is to build more houses, especially social housing, but that means eroding the green belts and relaxing planning laws - unpopular ideas. There are tougher measures, too. If housing faced higher taxes, either through inheritance tax, a wealth tax, lifting stamp duty, or limiting tax-free capital gains on housing, then house-price inflation would slow. And if Britain repealed its far too generous concession that non-residents and non-domiciled individuals can buy and hoard houses without paying tax, that would dent overseas demand. All have been ruled out because of a recoil at higher taxes.
But the mood is changing. It seems the middle class has begun to decide that the current mayhem is not in its interests. Privately some Tory policy-makers are toying with finding ways to use the tax system to slow down house-price inflation, pondering whether it really would be political suicide.
The Labour party has been paralysed, writing off taxing as leftist and impractical. But the politics of the house-price inflation machine are beginning to change. It may have made many over-50s very rich, but for the rest the social division, the private heartache, the risks of massive indebtedness and yet dearer houses make no sense. Right-wing policies have created a world we don't like. The pendulum is swinging back.
He's right. The Tories are discussing this. The Labour Party realises the threat is there. And the pendulum is swinging back. I'll be pushing it as hard as I can. I'm a middle class parent, after all.
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Then as a middle class parent Richard you will no doubt realize that thanks to a Labour government of 10 years and its inability to actual run anything we have house prices that are not only at a ridiculous level but more importantly unless you are able to financially help your children then the reality is they may very well never be able to afford a home in the UK, and as is happening with many others they may be forced further a field just to buy a home and put a roof over their heads.
Jason
Is ten years of continuous economic growth a sign of inability to run anything?
The rest fo your arguemnts reflect what I’m saying. You overstate blame.
Although if they’d got rid of the domcile rule it would have helped.
Richard
As I remember when they came to power they inherited a very strong position, one that was just starting to grow after years of Tory management to take the country forward from a stronger base position in contrast to the boom/bust years of Thatcher rule, and since then most of the world has also had growth, thus to an extent right place right time!
Jason
Legacies don’t last that long!
Methinks you ovestate your case.
There’s always a danger in too simple an analsysis (and I’m aware that will be quoted at me – but, candidly, mine rarely is)
Richard
I am not talkiing about a legacy, all I stated was they inherited a very strong starting position and this coupled with world wide economic prosperity makes it hard to get it wrong, even for Gordon!
However, rather than debate politics on a tax blog, we have a situation where the next generation will almost certainly not be able to get on the housing market, and if the current stock is devalued then there are a lot who have big mortgages and this will lead to even greater repo’s and ultimately could lead the UK in to a recession.
I wish them all luck, someone will ultimately have to sort out the current mess, and I don’t fancy the job thats for sure.