"Young people warned: You may never be able to retire"

From The Metro:

The stark assessment comes from those who have already reached retirement age but cannot afford to give up working.

More than a third of the 1.4million over-65s still in work said they would never retire, a survey by pensions provider NFU Mutual found.

This is to some extent propaganda pumped out by a pension/insurance company who want to blackmail people into handing over a large chunk of cash every month in the vague hope they'll get something back in decades to come, but there is some truth in it.

Having feathered their own nests, the Baby Boomers are quite happy to let somebody else sort out the wreckage. If they had their way, you'd be paying rent on their BTL portfolios or paying off a huge mortgage for the rest of your life anyway, because your rent or debt burden is merely the flip side of their retirement income.

"Straw little old ladies"

Andrew Neather in the Evening Standard pulls no punches:

One alternative is to [tax] wealth rather than income — especially wealth that’s hard to hide*. Yet the Tories are outraged at Liberal Democrat proposals to do just that, via a “mansion tax” on properties worth more than £2 million. The value over £2 million would be taxed at one per cent: the owner of a £4 million house would pay £20,000 a year**.

Nationally, maybe 0.25 per cent of homes are in the £2 million-plus bracket; in London, estimates put them at between 1.2 and two per cent of the total. Just 1,518 such homes were sold nationwide last year. Vince Cable’s charge this week that the Tories oppose the tax because it would hit “their friends” looks like a pretty simple statement of fact to me.

Not that the mansion tax will ever happen: this is really about Lib-Dem positioning. And in any case it would be simpler to create new council tax bands. The highest band at present, Band H, is for houses worth more than £320,000 in 1991 — hard to put an average value on today, but less than £2 million. So at present, the millionaires at One Hyde Park pay council tax of £1,365 a year on flats worth up to £136 million.

By way of comparison, a report in yesterday’s New York Times highlights an $88 million apartment at 15 Central Park West that attracted property taxes of $59,000; without a complicated tax break, the tax would have been $145,000.

Critics point to the alleged plight of little old ladies in big houses — straw little old ladies, I fear — and to the potential flight of the super-rich. But are the latter really all going to condemn themselves to lives in Zug or Dubai? I think we should call their bluff.

* Of course what he means is "the rental value of land" rather than "wealth", but this confusion has been deliberately instilled into us over centuries by the land owning elite.

** £20,000 a year is approx. the average total tax bill for an average full time earner; income tax is only a quarter of all the taxes we pay. So it's hardly a huge figure.

Young People's Party - Croydon North by-election

The party recently selected me(after I'd  nominated myself) to stand as candidate for the Young People in Croydon North. I've kicked off the initial actions.

First up was to check when the poll will actually take place. Croydon Electoral Services just told me they will not know until following the memorial service for Malcolm Wicks MP (may he rest in peace). After that the Returning Officer of the constituency must wait for the Speaker to issue an official 'writ'. And this only after the chief whip of the ruling party in the Commons deems it good timing. Interesting stuff.

The returning officer at the local authority must then announce an official timetable for the poll, which is usually within 15-19 days. Its likely to be Thursday November 15th 2012, when both the Corby by-election and the police commissioners polls will also take place.

Nominations for the ballot are next in the mean time. I'll need 10 signatures from local constituents
I'll be going to Croydon Friday morning to pay respect at the memorial service and then to do my first rekkie. That will be where I eventually seek nomination for entry onto the ballot.

Then its a matter of canvassing, leaflet dropping, the hustings, public relations, and of course stapling a 1000 notices to lamp posts across the town. All good fun.

Spending limit allowed by law is up to £100,000. Do you think that will be enough? We'll probably need about £2,000 mostly for 50 odd thousand leaflets etc.

Stretch goal is to retain my deposit and that will be some stretch! That will require 5% of the valid votes cast, about 2600. Only the Big 3 managed it in 2010. Anything more we will deem considerable upside.

The main objective is to use the election as a platform for the reform message - The end of rent seeking, the beginning of wealth creation, for our future, in the Young People. That is, Real Reform.

Call if you'd like to join me. 07786 078836

YPP - Twitter: @YPPUK
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Real Reform - Twitter: @Real_Reform
Real Reform - Political messaging
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Reader's Letter Of The Day

From the FT:

Sir, I agree with Charles Fairhurst that higher taxes on private sector landlords will drive many of them out of the property market (Letters, September 26). If that creates a declining market, it will have the hugely beneficial effect of enabling many of those now paying extortionate rents to buy their own homes.

Nigel Wilkins, London SW7.

This is not idle theory of course.

Two main reasons why owner-occupation rates in the UK increased so rapidly between 1945 and the 1970s (something we are proud of) was strict rent controls and high taxation of rental income; it just wasn't worth it being a landlord.

The other reasons for low and stable house prices and rising levels of owner-occupation were: mortgage rationing (high deposits were required and very low income multiples); lots of new construction; Domestic Rates and Schedule A (which between them acted like Land Value Tax) and the downward pressure exerted on rents by social housing (at its peak, about thirty per cent of households were in low-rent social housing).

Unfortunately, owner-occupation mutated into Home-Owner-Ism in the early 1970s once owner-occupation rates climbed over 50%. There were then more votes in abandoning rent controls; reducing taxes on rental income; NIMBYism; abolishing Domestic Rates and Schedule A; and selling off social housing.

Yes, it's a cool number plate, but we wouldn't pay £400,000 for it

Spotted in The Daily Mail:

Actual rental growth verses [sic] regular pay growth

Here's a nice chart from the September Halifax house price report:
What this boils down to is that rents act exactly the same as income tax; when wages go up, rental values go up accordingly. So we could save ourselves the faff of taxing earned income and just tax rental values instead, it would be a far less economically damaging way of collecting exactly the same revenue.

Croydon North By-election: Here we go again

There is going to be a by-election in Croydon North, probably in November.

One person has already expressed an interest in standing for YPP.