Jump to content
House Price Crash Forum

dryrot

Members
  • Posts

    2,450
  • Joined

  • Last visited

Everything posted by dryrot

  1. Hi, What we've known on here for years, of course. But now the lead article in this week's Spectator. "Assetocracy" https://www.spectator.co.uk/article/levelling-up-the-inversion-of-the-welfare-state "To understand how the Tories ended up in such a muddle about who they are and what they stand for, take a walk down any of the nicer streets in Boris Johnson’s constituency. North Hillingdon is as idyllic now as it was a generation ago: spacious houses, with large drives, built before the war. The houses were, once, more or less affordable. One property on Parkway, for example, was bought for £175,000 just over 20 years ago. It’s now valued at £1 million. And what’s true in Hillingdon is true of the rest of the country too. The asset boom that started at the turn of the century has transformed the finances of families across the country, turning modest-income retirees into unexpected millionaires: a new ‘assetocracy’. Homeowners have to sell to access the money, but their children can expect to inherit life-changing amounts — just as long as their parents don’t end up needing long-term care, in which case the costs can gobble up the inheritance. ‘My job is to protect you or your parents or grandparents from having to sell your home to pay for the costs of care,’ said Boris Johnson after becoming prime minister two years ago. This was quite a statement. But to do it would cost billions and the Prime Minister had also promised, in his manifesto, not to raise taxes. So what to do? Should he keep his promise to the voters, or create a safety net for the asset-rich? It’s telling that he chose to protect the assetocracy. The emergence of this new class in the space of the past two decades has changed politics more than any party likes to admit. Wealth has become concentrated in a group of people who now decide British elections. Before the crash, 7 per cent of British pensioners were millionaires, as measured by household wealth. Now, it’s 25 per cent — some three million people. A further three million are half-millionaires, with £500,000. That’s one out of every eight people eligible to vote. At each election, parties compete to bribe this demographic. Labour’s ‘winter fuel payments’ and pension rises were the start, followed by the Tory triple-lock pension. The next step: to guarantee that no one would have to sell their house to pay for care, no matter how rich they are. This prospect was dangled in front of homeowners by Blair, Brown and Cameron, but none of them went through with it. They baulked not only at the expense but also at what it would mean. The traditional logic of the welfare state — that those with power and money help those with less of it — would be being turned on its head. Wealth has become concentrated in a group of people with the power to decide British elections After minimal consultation with his cabinet, let alone his party and the country, Johnson has now completed this inversion, with a £12 billion tax funding a new deal. Some of the money will at first be used to help clear an NHS backlog. Some will help families who can in no sense be described as rich. But after the NHS waiting list has begun to ease, the tax becomes a care home insurance scheme, and the refusal to impose any means-testing has big implications. No one, no matter how rich, will have to pay more than £86,000 for their care in old age. This raises tricky political questions: how can you justify increasing taxes on the working poor to safeguard the assets of the stonkingly rich? What, morally, is the problem with someone selling their house — or any other asset — to pay for care? Isn’t Toryism about providing equal opportunities, a ladder for everyone to climb? Why then would any Tory want to make life even easier for those already at the top of the ladder, at the expense of people on the lower rungs? To understand, you need to do the electoral arithmetic. Age, not social class, has become the new dividing line between Labour and the Tories. The under-25s broke three to one for Labour in the last election — but this was no problem for Team Boris because the over-65s chose him by four to one. His gamble now is that the political backlash from tax rises will be balanced out by gratitude from affluent homeowners. To the Tory MPs trying to make sense of this twist in their party’s mission, this is what’s baffling. Surely, with the political power his election win bought him, Johnson should have found a way to help the less well off, who are already paying too much for shoddy care? Under the old system, there was a (pretty low) floor: no one would pay for their care if it meant reducing their assets below £14,250. And there was — still is — an urgent need for social care reform. But this isn’t about ‘fixing’ the system, though it’s a nightmare to navigate and entirely failed to protect care-home residents against Covid. What we have now is an asset pledge. No reform at all. The Tories have posed as the party of a property-owning democracy since Noel Skelton introduced the phrase in The Spectator in 1923. To Margaret Thatcher, owning property wasn’t about getting rich; it was about the chance to take control, to claim a stake in a growing economy. The idea was that homeownership would promote what Shirley Letwin called the ‘vigorous virtues’. A home-owner starts to see society in a different way and to feel that they have more agency, more power to change their life story. How, Thatcher asked, could popular capitalism work if people did not have capital? This week the Prime Minister called groups of backbenchers to No. 10 to explain his plan, but they left more confused than ever. He tried to sum up his thinking by saying in private what he no longer says in public: that it’s about the assets. ‘It stands for something very conservative,’ Johnson said to one of the groups of MPs he’d invited to No. 10 — ‘the right to pass on money’. Is this really the Boris Johnson definition of conservatism: a protection racket, where the tools of the state are used to extract money from minimum-wage workers and pass it on to the better off? I’ve spoken to many Tories who are worried by all this, but as much as they dislike it, hardly any decided to vote against it. The depressing truth is they don’t have a better idea, and they agree about the realpolitik. When Theresa May called a snap election in 2017, and was predicted a landslide majority, she felt confident enough to say she would not subsidise those who could easily afford to meet their own care costs. She was attacked for proposing a ‘dementia tax’ and her campaign imploded. Tory MPs still talk about the furious reaction on the doorstep from voters worried about losing their homes. Rightly or wrongly, the Conservative conclusion was that no one can win power by confronting the asset-owning classes. But even in political terms, the current plan is just a short-term solution. And it doesn’t just accept but actually deepens the already stark divide between those with assets and those without. The latest round of quantitative easing will further fuel the asset boom (cheap money always does), meaning more wealth for the richest. The division, inequality and subsequent resentment mean that the legacy of this self-interested approach could well be social unrest and a dramatic Tory defeat. A more confident Tory party could have a broader conversation. They could ask if anyone, rich or poor, wants to live in a country where the best chance of acquiring serious wealth is being born into (or marrying into) the right family. This was the theme of Thomas Piketty’s Capital in the 21st Century: that the system is rigged and that work can never pay as much as owning capital, so huge wealth taxes are needed. The Tory response, eight years ago, was to say that the asset boom was a freak and taxes on low-paid work would be cut. It’s harder to make that claim now that the Tories are quite literally increasing the tax on care-home workers on minimum wage to better insulate the wealth of the people they care for. An analysis by Policy in Practice puts a figure on it: a carer on the minimum wage of £8.91 an hour will end up paying £112 more in tax a year. Added to the coming reduction in welfare, they’ll soon be £1,082 a year worse off. ‘In every situation, we seem to shaft the young in favour of the old,’ says one of the newer MPs. ‘That’s what we did in the pandemic. Then afterwards, rather than repair the damage, we shaft them again. And until they start voting, that’s not going to change. We’ll get away with it because, no matter how bad we are, Labour is worse.’ It’s a fair point. An energetic and eloquent Labour leader would be in a very strong position. He or she would be able to hammer the Tories for breaking their tax promises, or point out that this 1.25 percentage point rise in tax on salary is actually a 2.5 percentage point rise, as it’s paid by both the employer and the employee. They could and should attack the PM on the grounds that it will depress future wages. They could point out that the Tories are undermining trust in politics, and that trust in politics is vital. And all because no one bothered to think of alternatives. [more at link; emphs mine]
  2. As a change from moaning about Ireland... https://www.telegraph.co.uk/business/2021/07/25/wine-lovers-save-130m-brexit-frees-imports-red-tape/ From Bloomberg https://finance.yahoo.com/news/u-k-scrap-post-brexit-165837854.html "The U.K. government said it will scrap a piece of planned red tape on wine imports. a move it said would save 10 pence ($0.14) on each bottle imported into Britain. From 2022, wine shipped to the U.K. from the EU, or about 55% of all wine consumed in Britain, was due to require a so-called VI-1 certificate, which requires laboratory analysis of the wine to prove it meets certain regulations. The wine and spirits industry had warned this paperwork would have pushed up prices. Yes! Tim Worstall's take https://www.expunct.com/business/brexit-brings-us-cheap-wine/ As Tim states, this is good news, but only a good start. Lots more EU bumf to scrap!
  3. The answer is "yes", of course Good (long) article on the current mess by one Danny Dorling, Professor of Geography at the University of Oxford. "So, while they may talk of wanting to make housing more affordable, they may also realise that doing so could be politically and personally disastrous for them and their children" https://ukandeu.ac.uk/long-read/house-prices-crash/?mc_cid=185a8242f2&mc_eid=f68fde8c47
  4. Agree. Just back in fact,: trains nearly empty (and you can easily avoid wearing a mask - self-exemption) National Gallery pleasantly quiet too. I look forward to being able to buy a beer at the bar tho.
  5. The Euro has been a catastrophe - and typically a manmade one. No-one knows how to fix it. My 2c? Either Germany/frugal countries agree to subsidise southern europe for ever, or Germany/frugal countries leave the Euro and allow then others to devalue.
  6. Why not say the cost of Brexit is £500trillion? You just make these figures up - Remember Project Fear predictions in 2016? 😀 Whereas EU country contributions are real money...
  7. Thx for the info. So the increase is to 2% - but only guarantee of a loan. (Germanys contribution will go up 42% - Merkels parting gift https://www.dw.com/en/germany-eu-coronavirus-budget-increase/a-53806800 ) Wrt the guarantee for the Covid loan, I can see there is no upfront cost. It will only be imposed if those who lent the Euro750Bn want their money back. >>> Will you guarantee a £1m loan for my next BTL purchase? after all, your not putting any real money in!
  8. Sorry - I may have missed your reference. (I find it hard keeping up with this thread) My ref was to the 2% GDP EU country contribution. Ours would be £40bn pa. When you think that furlough cost £66bn - we'd pay that every 18months forever
  9. Rejoin the EU and pay £40bn + per annum for the privilege? (Its like shooting fish in a barrel! )
  10. The headline was "'I've got £4 in the bank': Mum-of-six forced to sleep on sofa in crowded two-bed home" If you last till the end of the article you find: "A North Star spokesman said: “Due to Ms Mohammed recent change of circumstances, she has applied for a four bedroomed property. "Unfortunately, we do not have any houses, of a suitable size, in the areas where Ms Mohammed would like to live."
  11. More fantasy figures from the Remainers. Are you suggesting that UK GDP will fall by 4%? - of course not. That's project fear idiocy again - the figure is some projected fall from what it might have grown to. As all project fear figures, it's nonsense. But EU contribs are real money
  12. And Gap is closing stores all over Europe - not just Brexir Britain What would the UK contribution be to the EU when the increase to 2% of GDP is introduced? 2%od £2trillion I think - £40bn per annum. How smart we were to leave!
  13. I shouldn't take you seriously, I know... Irish corp tax rates must rise, EU contribs up to 2% GDP, Irish PM not consulted over Section 16/vaccines - and all you can find is: 'Customers of O2 have been told they will be billed £3.50 for every gigabyte (GB) of data used above a new limit of 25GB, from August." Over 25GB... Scarcely an imposition 😀
  14. Not sure if this has been mentioned: EU country contributions to rise from 1.4% of GDP to 2%. (A 42% rise!) How glad I am that we left. Never quite grasped why remainers felt we needed to endlessly fund the EU. If we were still in, the extra 0.6% of GDP would be nearly the entire foreign aid budget! https://www.spectator.co.uk/article/prepare-for-the-eu-s-hamilton-moment-
  15. [graph deleted] I agree this age-group stuff us hard to decipher. The hard-right-over50sBrexiteers were all 18-y-o revolutionaries in the 1960s?
  16. A straw in the wind... https://www.msn.com/en-xl/news/other/germany-calls-for-abolition-of-eu-foreign-policy-vetos/ar-AAKNvvG "The European Union cannot allow itself to be "held hostage" in its foreign policy by single nations exercising their veto rights, German Foreign Minister Heiko Maas said on Monday. His remarks are being widely seen as a rebuke directed at Hungary, which in recent months has blocked several foreign policy measures agreed on by almost all other member states". Its not our problem thank heavens as we are out: more proof that the EU is centralising and countries will be assimilated...
  17. Another Guardian/Observer piece. The wierd Remainer wish for Eastern European workers living 12-to-a-room in some dodgy rental and lowering UK wages is thankfully over. I enjoyed the final paragraph of the piece tho (no wonder rhe subeditor left it to the end! :)) "Lussmann laments the way hospitality as a profession is rarely respected in the UK, in the way it is in the US and Europe. And even if the staff shortage leads to a short-term squeeze, the restaurateur believes it may be beneficial to the economy – and to employees – in the long run. “I think in the end it will drive the industry to train better, develop more and look after staff more,” he said. “In the long term it is not a bad thing. It will mean better employers will do well and those who are not so good will eventually struggle to survive.”" Brexit -winning and delivering yet again!
  18. Barnier has already made a strong start... https://www.theguardian.com/commentisfree/2021/may/16/michel-barnier-marine-le-pen-france-presidential-candidate
  19. Interesting article (for the Metro, anyway). "In the city centre of Leeds, they’ve dropped by around £6,000 since the start of the year – now a two-bed flat with a balcony is achievable on a £160,000 budget. While, over in Sheffield, a typical one or two-bed flat will now set you back around £125,00 – down more than £4,000 since the start of 2021. In central Nottingham prices dropped by 3% in the same period, while Cardiff saw a 2% dip" So any Leeds buyers have lost £6k. On official figures... Can they even sell these inner-city highrise flats? (Hint: cladding)
  20. In fact, alcohol consumption has been falling for the last few years... https://www.ibisworld.com/uk/bed/alcohol-consumption-per-capita/44222/#:~:text=Overall%2C alcohol consumption is forecast,reach 9.0 grams per day.
  21. Thanks for your reply (I miss them sometimes as this thread goes so quick) You hav'nt really addressed the issue - arrogant EU president patronising Greece, a country the EU.Euro smashed. https://www.spiked-online.com/2021/06/01/the-eu-destroyed-greece/ "Few would think of the past 40 years as especially good for Greece. Particularly the past 10 years, which have been marred by the Euro crisis, austerity and economic collapse. It’s worth recalling the scale of this disaster. This was no ordinary recession. The austerity measures imposed by the Troika of the European Commission, the European Central Bank and the International Monetary Fund made our own austerity chancellor, George Osborne, look like Mother Theresa. Public-sector employment was slashed by 30 per cent. At the worst point, Greece lost more than a quarter of its entire GDP. Unemployment climbed by 16 percentage points and youth unemployment peaked at around 56 per cent. What’s more, the scars remain. Greek GDP per capita has never recovered to the levels it enjoyed in the year 2000 – even before the pandemic struck. The best years of Greek history, really?" EDIT: add that i accept the Greeks bear some responsibility for borrowing so much - but that was also the fault of the disastrous Euro, which made Greek debt seemingly backed by Germany (another EU failure)
  22. Went to the Ealing one yesterday. Great stuff - pint of Punk IPA and a tuna jacket for ~£6. Double-expresso coffee for 99p. We love you Tim Martin!
  23. I cant remember which of the 12 or so EU Presidents Mr Michel is, but anyway this is a classic! Wow! So the EU-austerity-savagery is "the best years in [Greece's] history" Thank heavens we are out of the EU. This sort of speech would wind me up when we were part of it (and paying for the Eurocrats salaries).
  24. Hi More excellent progress - of crse we can deal with our European partners without a choking layer of EU bureaucacy! https://www.theguardian.com/politics/2021/may/31/france-italy-germany-brexit-deals-uk EDIT: kudos to the Guardian for reporting it.
×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.