Another day, several more reckless throws of the dice (23)

Here's the first batch from today's crop of crap:

1. Northern Rock's staff got £9 million in bonuses for repaying £18 billion of the taxpayers' loan, apparently ahead of schedule. Speaking as a taxpayer, that looks like good value - it's only 0.05% of the money they brought in and repaid. The government has now reversed this eminently sensible policy and now wants them to lend another £14 billion. Question: are Northern Rock staff going to have to repay £7 million of their bonuses? Fair's fair, and all that.

2. "Mortgage lenders should face penalties for repossessing homes too quickly, MPs have urged. The Commons Communities and Local Government Committee criticised the "precipitate" action being taken against the increasing numbers of people getting into arrears. And it said in a report that attempts by the Government to limit repossessions cannot be enforced."

We have the usual assymetry problem here - for every reckless or unlucky borrower who isn't repossessed, there's another family in rented or too-small accommodation who can't afford to buy or trade up at a reasonable price.

3. At the end of that article "The committee said a greater proportion of new homes ought to be stipulated as social housing."

*Sigh*

If homes to buy came down in price, then the better-off-poor would be able to buy their own home; that would get people off waiting lists and out of social housing. Ideally, councils could get private builders to build homes for sale, but institute Land Value Tax on those homes, in other words, instead of Council Tax and Stamp Duty, purchasers would agree to pay, each year, (say) 5% to 10% of the difference between the purchase price and the construction costs (about £75,000 for a three-bed semi or terrace).

The initial amount of the tax would be decided by the first wave of purchasers - if they are happy to pay £85,000 for a house, they pay £1,000 in tax - as long as the total mortgage bill plus tax is less than what it costs to rent, they are happy. When houses on the estate are later sold for higher or lower prices, everybody else on that estate gets a correspondingly higher or lower LVT bill, i.e. the tax in future years would be set by negotiation between buyer and seller.

Further, this highlights the schizophrenic attitudes of people in general and politicans in particular: OT1H, they are desperately trying to reflate the house price bubble (using taxpayers' money) and OTOH, they accept that people are being priced out, so they want to build more social housing (also using taxpayers' money). Or maybe it's not schizophrenic at all - from their point of view, anything that uses taxpayers' money is seen as a good thing.

*/sigh*