Friday, 25 January 2013

Meet-up, Friday after work

I'll be in the Brewmaster pub near Leicester Sq Tube station after work today (5.20 pm, Friday 25 January) for a pint or two.

If you fancy turning up to help plot the quiet revolution, send an email so that we know how to recognise each other etc. You'll find me in the alley at the side with the smokers.

Saturday, 12 January 2013

They own land! Give them money!

Katy John from Priced Out linked to this corker from Housing Minister Mark Prisk:

So before Christmas I launched the £200million Build to Rent fund, which will help give developers the freedom to expand their businesses beyond the traditional sale market and into homes built specifically for private rent.

Sweet, so he is using taxpayers' money to subsidise people who want to collect more rent [privately collected tax] from the same people as are already paying the [publicly collected] tax.

Thankfully, £200 million is not a huge figure, but it's the principles (or lack thereof) which matter.

Tuesday, 8 January 2013

"London's poor now subsidise its rich"

Simon Jenkins in the Evening Standard:

In addition, every year central government tries to win electoral credit by demanding, pleading, chiding and bullying local councils not to increase [Council Tax]. The result is absurdly regressive. The “spread” of tax payments under the old rates — the gap between the highest and lowest payments — was 1:100, making it reasonably progressive. The spread of council tax bands today is just 1:3. The effect of this has been a steady rise in the council tax burden on the poor and middle-income and it plummeting on the rich.

In the late Eighties, houses in Maida Vale, Mayfair and Kensington were paying £5,000-£8,000 a year in old rates. The same people now pay little over £2,000. Central government policy has led to a huge tax bonus for the London rich. In capitalist New York, residents of suburbs such as Westchester county pay $15,000-$20,000 a year in property taxes.

Back in the 1980s, Domestic Rates raised considerably more than its eventual replacement Council Tax, and Stamp Duty was only one per cent.

Would it really be so terrible if we turned the clock back a bit and reinstated these rules? If you index up the figures given for inflation, what Domestic Rates would amount to is a flat annual tax of something under one per cent on the market value of each home (like they still have in Northern Ireland). If the owners of multi-million homes in "Maida Vale, Mayfair and Kensington" end up paying £20,000 or £50,000 or £100,000 a year, would anybody really care? If the current owners can't afford it, then there'll be plenty of French tax exiles and Arab and Russian oligarchs happy to step in.

The more of these people we can encourage to come to London the better; even if the whole of central London became a playground for millionaires, so what? If we had another half a million of them spending half a million pounds a year each, that would turn our trade deficit into a massive surplus and increase our GDP by a fifth.

Saturday, 5 January 2013

Only sixty per cent of UK adults are owner-occupiers

One supposed obstacle to shifting taxes from output and employment to the rental value of land is that "turkeys don't vote for Xmas", which pre-supposes that a vast majority of the electorate derive more income (or benefit) from landownership than they do from going out to work or running a business (which is clearly nonsense).

While it is often stated that 68% of UK households are owner-occupiers (who by implication would rather go for the safety of government protected land values), Rob B asked me whether there are any statistics on how many adults are owner-occupiers (singly or jointly with partner).

For example, if there are two houses, one owned-occupied by a single adult and the other rented to a couple, that's 50% of households who are owner-occupiers, but only 33% of adults. So on a per-household basis, there is no majority for shifting taxes from output and employment to the rental value of land, but on a per-adult basis there is.

As far as I can see, there are no such statistics, but we can reverse engineer it from the DCLG's English Housing Survey for 2008-09 and the ONS survey Families and people in families (published early 2012, Excel Tables here).

Table 3 of the former lists each household by type and says what percentage are owner-occupiers or tenants in England; sheets 1 and 7 of the latter give the absolute number of each household by type for the UK. We can assume that the percentages for England apply across the UK and thus multiply them by the absolute number.

We can then multiply the number of owner-occupier households with only one adult (single, widowed or lone parent) by one and the number of owner-occupier households with two adults (couple) by two (and the number of 'other' households by 1.5) and we arrive at the grand total of 30.1 million adults who can describe themselves as owner-occupiers.

The total number of adults in the UK from the 2011 census (click the link under Figure 3) is 50.5 million.

30.1 million divided by 50.5 million is just under sixty per cent.

(Quick check: there are 18 million owner-occupier households in the UK, of which one-third are single, widowed or lone parent and the other 12 million are couples; 6 million plus 24 million = 30 million. Looks about right).

We could tweak that a bit in either direction, for example we could deduct a million owner-ocupier households who have little or no equity in their home, but that is then guesswork/subjective.