More glorious Home-Owner-Ist DoubleThink.

I do not know who decided to call the proposed annual tax on high value dwellings a 'Mansion Tax' but it was a bad idea (singling out one particular cut-off price level was also a terrible idea, but we all know why that happened so that is not at issue here).

It is possible that the Home-Owner-Ists themselves coined the phrase 'mansion tax' in which case it was tactically a brilliant idea - if my wife buys a tin opener and I decide to call it 'a pair of scissors' then I can moan at her every time I try to cut cloth or paper with it, telling her that the 'scissors' she bought just don't do the job properly. See also Labour/Bedroom Tax.

So the Homeys do the same thing and bombard us with articles like this:

Agents condemned the tax as “completely unfair” claiming that it will catch thousands of modest family homes in central London while the owners of large country houses in cheaper areas of the country will pay nothing.

In other words, 'Mansion Tax' is badly named tax; the Homeys then say 'Therefore it must be a bad tax'.

Anyway, Ed Miliband must be tired of hearing this crap by now and agreed that his own high value dwelling was not, in the traditional meaning of the word, 'a mansion'. It clearly isn't, it's a fairly big London townhouse. Ed also cheerfully said that he didn't know who had invented the phrase 'mansion tax'.

The Homeys, having spent the past year or two repeatedly making the same point, then go completely mental:

Nigel Adams, Conservative candidate for Selby and Ainsty, said:

“Ed Miliband’s desperate to come across like the man of the people – but these comments are yet more proof he’s completely out of touch with ordinary people. Is it any wonder Ed’s happy to slap a homes’ tax on hardworking families while at the same time hiding his nanny in the downstairs kitchen?"

Look, you Homey fuckers, is Ed's house a 'mansion' or isn't it? It's a simple question. He was agreeing with what you have been saying all along, is all. Do you mean that you are actually out of touch as well?

Good to see 'hardworking families' getting a mention, makes a change from Poor Widows In Mansions.

My favourite Indian Bicycle Marketing of the day.

Ed Miliband, on super tip-top form, promises an emergency recruitment drive to get 1,000 more nurses into training this year if they win the election.

According to the NHS Confederation, NHS England alone employs 377,191 qualified nursing staff.

According to the Daily Mail, about 5,500 NHS nurses left to work abroad last year.

Assuming a nursing career of forty years, about 10,000 new nurses start each year and 10,000 retire.

So 1,000 nurses is not even a bloody rounding error, is it?

"It can't be tax avoidance if no tax was avoided."

Ha!

From the BBC:

Mr Miliband has confirmed his mother Marion set up a deed of variation after the death of his father Ralph... the deed allowed ownership of the house to be split between Mrs Miliband and her sons [rather than going to Mrs M outright]. The paper quoted experts suggesting such arrangements could be used to reduce tax liabilities.

Mr Miliband later sold his share to brother David who also bought the rest of the property from his mother. But a Labour spokesman said: "Ed paid 40% capital gains tax when the house was sold in 2004/05. It can't be tax avoidance if no tax was avoided."

This is taxation for idiots. The rate is one thing, the tax base is another.

Inheritance Tax and Capital Gains Tax (at the time) were both 40%.

The difference is that Inheritance Tax is payable on the full value you inherit and CGT is only payable on the increase in value between when you inherit it and when you sell it.

So, by a circuitous route*, the sons ended up saving IHT of 40% x whatever the IHT nil rate band was at the time (£200,000, probably) when Mrs M died.

For Dave, who moved into the house, that was an absolute saving (future capital gains are exempt).

For Ed, the increase in value between when he inherited and when he sold to Dave was taxable at 40%. So he paid 40% on some of his ultimate proceeds but not on all of it, which he would have done without the deed of variation (40% IHT on value at date of death and 40% on future increase in value).
---------------------------------
* The circuitous route...

The original deed did not reduce the IHT bill on Ralph's death but was (almost certainly) done in order to use up his nil rate band. Most transfers to widow or widower are exempt anyway, but his sons inherited a share of the house worth as much as the nil rate band was at the time, with no IHT. This is then their base cost to deduct from a future sale to calculate the capital gain (if any).

So when Mrs M shuffled off, the value of her estate was correspondingly lower and so the amount of IHT which the sons had to pay when they inherited from her was less than it would have been without the deed of variation.

While this is bog standard IHT planning, the whole thing is now redundant because if the deceased did not use up his/her IHT nil rate band with transfers to other relatives, the unused bit goes to the surviving spouse, so it can be used when he/she dies.

In which case, Ed Miliband is far brighter than they give him credit for...

From the BBC:

The Daily Telegraph's] editorial accuses Labour of being "inexorably anti-business", arguing:

"Occasional lip service has been paid to the power of capitalism to create wealth and jobs. But it has been drowned out by attacks on landlords, energy suppliers, railway companies, financiers, bankers and anyone else who appears to be, in Mr Miliband's eyes, a 'predator' rather than a 'producer'."

If you look at that list, those people are predators and not producers!

For example, railway companies are providing services and however much some people hate them, they are providing very important services.

But the simple fact that they can increase their fares year-on-year without any [significant] improvement in their services clearly indicates that they are actually collecting unearned rent rather than just a fair return on capital/labour.

The same applies in spades to landlords, financiers and bankers, and, for that matter airlines and broadcasters. It applies to a lesser extent to energy companies, they are not ripping off 'the consumer' so much as they are ripping off 'the taxpayer' (via all these grants, subsidies, guaranteed prices etc).

(If Red Ed went round slagging off car manufacturers or dry-cleaners, that would be truly anti-business.)

More Fun To Be Had... (Part 2)

At The Daily Mash.

Ed Mililband and The Parable Of The Talents

From Matthew 25:29 and 30:

For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.

And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth.

From the BBC:

Unemployed young people could be denied out-of-work benefits unless they agree to training, Ed Miliband is to say.

In a speech, he will say those aged 18-21 should get a means-tested "youth allowance" rather than Jobseeker's Allowance, if they train in key skills...

Mr Miliband will also propose an increase in Jobseeker's Allowance from £72 to £100 a week for those who had been in work for the previous five years - rather than the current two years.

Or as Frank Zappa put it "And the meek shall inherit nothing".

Red Ed on the rampage: World's oligarchs tremble with fear.

From yesterday's Evening Standard:

A crackdown on "ghost homes" being hoarded by wealthy investors across London is unveiled today by Ed Miliband, in an exclusive interview with the Evening Standard.

New laws under Labour would hit rich owners who leave some 60,000 desperately-needed properties standing empty in the capital, and drive up house prices for everyone else...

Amid fury that thousands of flats have been sold to foreigners who never use them, but simply pocket the profits of a surging housing market, he pledged that Labour would take action by...

* drumroll *

... Doubling council tax for owners who let their flats lie empty and unused. After the property has been empty for a year, councils would have powers to impose a 100 per cent increase on their bills — which this year average £1,296.44 for a band-D home in London.

AstraZeneca: Some more splendid Indian Bicycle Marketing

From the BBC, 2 May 2014:

Conservative peer Lord Heseltine has said the government should have greater powers to intervene when British companies are the target of takeover bids by foreign businesses.

The former deputy prime minister told the BBC takeovers "could be very helpful", but the UK should do more to protect its national interests. This week, American drugs giant Pfizer announced it was bidding for British pharmaceutical company AstraZeneca...

From the BBC, 4 May 2014:

Ed Miliband has called for an inquiry into whether the US drugs firm Pfizer's planned takeover of AstraZeneca is in the UK's national interest.

The Labour leader has written to the PM to urge a stronger public interest test for takeovers of important businesses.

No 10 has denied Labour claims it is acting as a "cheerleader" for the deal, saying it is fighting for British jobs and British science.

From the BBC, 4 May 2014:

The Conservative Party Chairman Grant Shapps has said tests are in place to make sure that any takeover of AstraZeneca by Pfizer is in the public interest.

His comments come after Ed Miliband wrote to the prime minister calling for an inquiry and for a stronger public interest test for takeovers of important businesses.

Mr Shapps told the Sunday Politics that Labour's approach was "anti-business".

Is there actually a scintilla of difference between what Heseltine says and what Miliband says; or between the Conservatives' proposed "public interest test" and Labour's proposed "public interest test"?

Probably not, but nonetheless, Shappsy dutifully slags of Ed Miliband as being anti-business. Ed is quite happy about this, because it sends a message to potential Labour voters.

Presumably, it has been agreed that Heseltine might be a bit of an old fuddy-duddy but a true patriot at heart.

It has probably also been agreed that Labour will go on to accuse the Tories of kow-towing to large business interests at the expense of skilled employees in this country, or something.

"Ed Miliband: Labour's plans to solve London housing crisis"

From The Evening Standard:

Ed Miliband today warns that London’s position as the global property capital is in danger unless hundreds of thousands of new luxury apartments are built and left standing empty.

Writing in the Standard, the Labour leader says a stream of new multi-million flats and houses is vital to ensure that property developers can tap into the seemingly unstoppable inward flow of hot foreign money.

He commits Labour to develop a “next generation of new high-rise blocks” similar to Number One, Hyde Park and The Shard, where aspirational Arabs and Chinese oligarchs can hide their wealth while benefitting from the efforts of those working in the booming South-East and the rest of the country which is subsidising it all.

He also sets out plans to speed up luxury housebuilding in London’s 32 boroughs, including action against council tenants sitting in flats on prime land and moves to increase the number of empty foreign-owned mansions on Bishops Avenue.

“There is a chronic shortage of vacant high-end homes in Britain, and nowhere is this clearer than in London,” writes Mr Miliband. He credits the ballooning cost of housing for creating a seemingly unstoppable wealth-generating machine for many non-domiciles. “Their hopes are rising as fast as prices are rising beyond everybody else's reach.”

He says: “And it is also easing matters for large landowners, both in the public and private sector. Indeed, the RICS recently highlighted the potential inward investment by skilled kleptocrats as the biggest opportunity to cement London’s position as one of the world’s most piratical cities.

"I've had my house in Hampstead Heath valued at nearly £3 million," he concludes, "It's fucking brilliant, isn't it?"

"Ed Miliband urges bank mergers to tackle 'broken' market"

From the BBC:

The UK's second and third tier banks are too powerful and should be forced to give up "significant" numbers of branches to larger players, Labour leader Ed Miliband is to say...

Doll revolution

A Labour government would "turn the tide" by creating another credit bubble which would force failing "challenger" banks such as Abbey National, Bradford & Bingley, Northern Rock or Britannia into the arms of larger more efficient institutions such as Santander, which will boost High Street competition.

Everything

Miliband will promise a "domino effect" whereby smaller entities such as the Britannia would drag mid-tier partners such as the Co-operative Bank down with them and end up being swallowed by a hedge fund, and if no white knight could be found, the failing banks will simply be nationalised.

Different light

The Labour leader will say that there was no natural upper limit to the possibilities, citing the forced merger of Lloyds and HBOS and the RBS/NatWest takeover as shining examples of the benefits of market liberalisation, both of which resulted in the combined entities being part-nationalised and state-funded.

All over the place

But the Conservatives said Labour's policies were "all over the place"...

In his speech at the University of London, Mr Miliband will liken the "broken" banking system to the energy market, claiming "too much power is being dissipated in too many hands" and this has a detrimental effect on banker's bonus pots.

A Labour government, he will say, would instruct the Competition and Markets Authority to report within six months of the May 2015 general election what the minimum limit on a bank's market share should be and the timetable for future mergers and subsequent bail-outs, which should be completed by 2020.

Reader's Letter Of The Day

DBC draws my attention to this in The Guardian:

Ed Miliband's proposals to prevent the hoarding of land by developers and unhelpful neighbouring councils (Report, 16 December) marks the return of the land value question to the mainstream political agenda, which was once taken up by the issue and its proposed solution, the land value tax, with pro-LVT arguments from the Physiocrats, Adam Smith, the Mills, father and son, and, most spectacularly, Henry George.

Significantly, though it was once thought more important in an agricultural economy, the big pushes for LVT were in the People's Budget of 1909 (Lloyd George and Churchill) and the 1931 Finance Act (Philip Snowden) as it became obvious that cheap money from the banks does not stimulate consumption and production in an industrial economy but just sets off land price inflation, leading to house price bubbles which actually reduce spending on manufactured goods by heavily mortgaged households and those paying high inflated rents.

Ed Miliband should not underestimate the strength of the opposition in the UK: the entire political system, including some in his own party, is based on the practice of homeownerism, which means being voted in and staying in power by keeping up house prices to offer a working majority of voters huge unearned capital gains in their house prices as a something-for-nothing reward for their quiescence over falling real wages.

DBC Reed, Northampton

"Mortgage lenders 'grooming' next generation of debtors"

From The Metro:

Bankers are 'grooming' the next generation of borrowers by advertising on children's TV, a finance expert warned yesterday.

More than one in seven parents said they had been nagged by their under-tems to take out second mortgages, MoneySaving Expert.com founder Martin Lewis said.

The warning came as representatives from Lloyds, Barclays and RBS were quizzed by MPs in the Commons.

Labour leader Ed Miliband also attacked the 'tollbooth economy', calling the industry 'one of the worst symbols of the land monopoly black hole'.

Fun Online Polls: Ralph Miliband & Harry Potter films

The responses to last week's Fun Online Poll were as follows:

Did Ralph Miliband 'hate Britain'?
Yes - 33%
Oh come off it, he was just gorging at the taxpayer funded trough just like the rest of them - 25%
I'd never heard of him before David Miliband became Foreign Secretary - 18%
Depends what you mean by 'Britain' - 15%
No - 9%

So now we know. Or we know what people think, at least.
--------------------------------
Prompted by The Stigler's post yesterday: which is your favourite Harry Potter film?

Vote here or use the widget in the sidebar.

Fun Online Polls: Fergie, Prince Andrew & Ralph Miliband

The responses to last week's Fun Online Poll were as follows:

Fergie and Prince Andrew might get married again...

Not bothered either way - 56%
Ah bless, good luck to them - 21%
Clearly nobody else would have them - 16%
Which Fergie? Sir Alex Ferguson? - 4%
They are making a laughing stock of the Royal Family - 3%
Other, please specify - 0%

Fair do's. I was in the "Ah bless" camp myself.
------------------------------------------------------
The Daily Mailiband saga continues. As a brighter mind than mine once said, it's the only newspaper which trolls its own readership.

Today they published this photo:
So, notwothstanding there is no such place as "Britain", that's the topic of this week's Fun Online Poll: are we capable of distinguishing between the people of a country as a whole and in the round, and a narrow self-appointed élite?

Of course, we swiftly go round the clock and realise that most professors at the LSE, whose kids went to Oxford when it was still "free" and end up as Foreign Secretary or Leader Of The Opposition without ever having had a proper job are part of the self-same, general-populace-loathing, self-appointed élite, but hey...

Vote here or use the widget in the sidebar.

Scots Git defends defends "right to offend" in Miliband row

From the BBC:

Speccy four eyed Education Secretary Michael Gove has defended the "right to offend" and said nobody needs to apologise to him if they imply that his adoptive parents clearly brought him up wrong.

The Daily Mail has said using a photo of Ralph Miliband's grave had been an "error of judgement" but stood by its story claiming he had "hated Britain", which is a fine example of muddle headed propaganda whereby you conflate a whole country with the rent seekers at the top.

It can't be disputed that Miliband senior, as an armchair Communist "hated" large parts of The Establishment - the landowners, capitalists, Royal Family, bankers - but then so do a lot of otherwise patriotic British people.

Weedy Mr Gove, whose wife receives money for signing off whatever the Mail shove under her nose, said politicians should not "tell editors how to do their job".

Free speech was "raucous", he said, but he would not confirm or deny that a childhood of being bullied at school was the root cause of his now devoting all his waking hours of thinking up ways of bullying school teachers as a form of vicarious revenge. Gove then left to wash his hair in a toilet bowl, a habit he picked up from bigger boys at school.

It was suggested that Gove's deep-seated bitterness might have been influenced by the fact that he was given up for adoption at birth. Former Deputy Prime Minister Lord Heseltine said this was a bit "demeaning" before swinging off through the jungle.

Peter Lilley on top form

From City AM Forum:

So it is with most merchants of global warming doom. Their models forecast that, as carbon dioxide emissions rise, the world's temperature should accelerate upwards. Over a third of human carbon emissions since the beginning of time have been pumped into the atmosphere since the end of the last century - but the temperature has simultaneously stopped rising. That would give all objective scientists cause to question these models...

Until scientists agree whether warming will be minimal or massive, we should not drive our fellow citizens into fuel poverty, undermine manufacturing and waste taxpayer billions.

Meanwhile Miliband, who was environment secretary when the Climate Change Act committed future governments to replace fossil fuels by renewables costing two or three times as much, promises to freeze energy prices. The fact that even he didn't mention his Act, which is incompatible with his pledge, shows it is politically indefensible.

A point I made myself last week, but it's nice to hear somebody else say it.

Land, oil, gas, rents, price caps etc

1. The knee-jerk industry response to Red Ed's musings about price caps for energy prices was that "We can't help it if world market prices for oil and gas go up, if you impose price caps that's tantamount to forcing us to sell at a loss and we'll have to shut down".

Well, maybe they would, maybe they wouldn't, but that is only if the UK were to do this in isolation. Because while the world market price (WMP) for oil or gas (O&G) is whatever it is, that price is far in excess of the actual cost of getting it out of the ground (AC); so any price cap which Labour dream up would be lower than WMP but higher than AC.

But what if most governments formed an oligopsony and agreed a universal price cap: nobody is allowed to pay more than $x for a unit of imported O&G? As long as $x is in excess of AC, then we can assume that exporters will continue exporting as they can still make real profits.

2. This leads me to my next topic, which is the truism that when the economy does better, demand for O&G increases disproportionately, and because supply is relatively price insensitive in the short or medium term, O&G prices increase super-proportionately.

Which is a vicious circle for importing countries. Let's say that at current GDP levels, 5% of our GDP output (call it £1,500 billion a year) is spent on importing O&G (call it £75 billion a year).

If GDP goes up 10% to £1,650 billion, then O&G prices go up by a lot more, say 20%, so we are now importing 10% more OG at a 20% higher price, £75 billion x 1.1 x 1.2 = £99 billion, which is 6% of our GDP; or £24 billion of that extra £165 billion GDP (15%) disappears abroad, to be recycled when exporting countries buy up assets in the UK.

3. Economists tend to see land/location rents and O&G prices as two separate topics (apart from those insane economists on far left and far right who deny that land rents even exist), although they both come under the same general heading of "land" or "natural resources". Land Value Taxers agree that both are suitable subjects for taxation, but also tend to see them under separate headings, or suggest taxing them for subtly different reasons.

But remember that land/location rents are merely a function of average net wages minus the costs of a basic minimum living standard; so a small percentage increase in GDP or wages leads to a much larger percentage increase in land/location rents - even though the landowner's actual costs (AC) have not changed and what he is providing has not changed (he is sub-licensing the same government-granted exclusive right to access to land).

Similarly, O&G prices are a function of how well the global economy is doing, and the costs of extraction are fairly fixed, so a small % improvement in global GDP leads to a larger % increase in O&G selling prices and, mathematically, an even larger % increase in the pure profit/rental element (WMP minus AC).

So ultimately it is the same thing - if the economy grows, landowners get a larger and disproportionately larger share; and O&G exporters get a larger and disproportionately larger share. If your landlord is a Russian or Saudi Arabian, it's all the same as far as he is concerned.

4. Finally, price caps.

Let's apply the logic from Part 1 above to land/location rents. Although most housing market commentary talks about changes in selling prices, it is rental values which drive the markets, they are the Maypole around which house prices dance.

We know that while rent caps work in the short term, in the medium and long term they lead to all sorts of unwanted side effects.

But what if the boot were on the other foot? What if we look at the demand side, not the supply side?

In other words, instead of the government preventing individual landlords from charging "market rents" (being average local net wages minus basic living costs), the government made it illegal for any tenant household to spend more than 10% of its gross income on rents, or for first time buyers to spend more than 10% of their gross income on monthly mortgage repayments?

It wouldn't actually need government action if tenants/first time buyers themselves would wake up and organise themselves, i.e. form an oligopsony and agree among themselves that "nobody pays more than ten per cent on rent"?

5. For the sake of this discussion, let's assume that the average tenant household in the UK pays £9,700 in rent and the average tenant earns £28,000. On average, a tenant household has one-and-a-half earners, so has gross income of £42,000.

If only a small number of tenant households did it, then they would have to downsize, but what if every tenant household did it? They can't all be forced to downsize. Every landlord would want to attract the highest-earning tenant household (as at present) but the highest-earning tenant household in turn would want to live in the nicest house.

So our high-earning tenant household with gross income of £100,000 now know that they only have to pay £10,000 a year in rent instead of £20,000 or £30,000. Their landlord will be a bit miffed, and when the tenancy comes up for renewal, he will try and find a tenant household earning £110,000; but that even higher earning household will only be paying £11,000 for something much nicer so won't want to down-size etc.

The upshot of all this is that gross rents will fall by half or so; our average tenant household will be paying £4,200 for an average sort of house which costs the landlord a lot less than £4,200 to maintain and insure, so he is still making some money; but pure land/location rents, the excess of gross rents over actual costs will fall disproportionately (to a few hundred pounds per home per year in most places).

But - and this is the important point - very, very few tenant households would end up moving. The highest earners remain in the nicest homes, the average earners in the average homes and the lowest earners in the cheapest homes. So the allocation would still be a free market allocation - if you want to live somewhere nicer, then try and get a better job or a promotion, or do more overtime etc.

6. Remember, this is a cultural thing.

There is no hard and fast rule on what a basic minimum standard of living is, we can only work out the annual cost thereof by observation, even though we do not know what this basket includes (and it is almost certainly different things for different households).

If it simply became tradition or custom that "nobody spends more than ten per cent on rent" then the amount spent on "everything else" would go up accordingly and over time, this would become the new basic minimum. We know that output would increase (less money disappearing into the LMBH) and with higher output, unit costs would decrease (same fixed costs divided by larger number of units of output).

Life Copies Satire

James Frayne in this morning's City AM:

[Ed] Miliband has a very narrow mission this week. He must deal with concerns in Westminster about his character to end speculation about his leadership. Nothing more. And this requires a speech designed to appeal purely to Westminster elites.

These elites only care about style. Miliband will therefore almost certainly be working on a speech to be delivered with no visible notes, and with decent jokes, surprising personal stories, emotional moments, and a cameo by his impressive wife. A few announcements will bulk out the coverage.

From this afternoon's Daily Mail:

Justine Miliband... has vowed to break with convention and speak out publicly about why she thinks Mr Miliband should be Prime Minister. The child actress-turned-barrister has begun making a public appearances and speeches at the Labour party conference to 'humanise' her husband.

Mr Miliband repeatedly said he would not copy David Cameron's habit of eye-catching photo opportunities while opposition leader, and would instead focus on policies.

Not Red Ed nearly gets it; government misses the point

From The BBC:

Labour leader Ed Miliband is to accuse some property developers of hoarding land and failing to build the homes that the country needs.(1)

In a speech on Saturday, he will say too many firms with planning permission for projects are "sitting on land" as it gains value,(2) instead of using it. Labour is considering giving councils more powers to penalise firms which do not proceed with building projects.(3)

The government said confiscating land "will not help build a single house".(4)

1) Clearly, it is hotly disputed how many homes "the country needs". The Homeys claim that there are quite enough homes (because they've all got one - which raises the question of whether they actually need them) and that if more were built, "they will all go to immigrants"  and "the countryside will be concreted over" and so on. Let's put that to one side for now.

2) Correct.

The land bankers are among the biggest beneficiaries of Home-Owner-Ism, which is a bundle of government economic policies which have the single aim of driving up the selling price of developed or developable land. They make far more money by sitting on land as it rises in value than they do from the tricky and risky work of actually getting houses built.

Obviously, it was Not Red Ed's own party which took Home-Owner-Ism to extremes in the 1997-2010 period, even Thatcher looks moderate in comparison, but there you go, bygones.

3) Here's where he goes off piste.

Like all politicians, he wants to invent a new clumsy mechanism instead of using an existing tried and tested one - which would simply be to slap all sites with planning permission with some form of annual Land Value Tax, which in practice means Council Tax or Business Rates.

They could just put each plot with planning permission for a house into Band H and charge them £3,000 a year Council Tax for it (or corresponding lower amounts for flats) or they could apply Business Rates to the plots, which VoA can estimate as 5% of the current cost/value (easily ascertainable). This is what the VoA does do for other improvements to existing buildings if the actual rental value of that improvement is difficult to establish (I know that because I had to ring them on behalf of a client and ask).

4) Maybe, maybe not.

Nobody says that actually confiscating land in itself (or allowing planning to lapse after three years) will increase house building (even though the Homeys would see that as A Good Thing). It is the THREAT of confiscation that will lead to more house building.

And even if a council confiscates land, i.e. lets the planning lapse and then does a Compulsory Purchase Order for the new lower value, what is the council going to do with it?

The chances are it will re-grant the planning and then sell it on again. For sure, if it sells on a plot of land with planning subject to a £3,000 annual Band H charge, the upfront price will be adjusted down by the amount of the future tax, but the total amount a developer is willing to pay and which the council receives will be much the same either way.

Sorted.

Whatever the "problem" is, the first question to ask is "Will LVT-Man fix this for us?" and it is surprising how often the answer is "Yes".

Joined Up Thinking Part 2

Ed Balls, the shadow Chancellor, has warned that an incoming Labour government would set a limit on its welfare budget that would include pensions, because pensioners also have to share the pain as the UK struggles to get its economy back on track.

Mr Balls also appeared to have contradicted the Labour leader, Ed Miliband, whose staff had briefed journalists only days ago to say that Labour would protect the so-called ‘triple lock’, which guarantees that state pensions go up every year.

But Labour spin ministers emphasised that Mr Balls was not planning to scrap the ‘triple lock’, which guarantees that pensions rise annually in line with inflation, earnings, or by 2.5 per cent, whichever is the greatest. They said that the basic pension would continue to rise annually under Labour, while they looked at long term possibilities for cutting the cost, such as raising the retirement age.

"We will look at the details of the government's cap when it is announced in the spending review as we develop the details of our own."

Update: A few hours on from Ed B's morning appearances, and the various spokespersons for the various players now seem to have between themselves reached some sort of agreement as to what it was Ed actually said, and are now busy passing it on so that those of us who plainly weren't listening with the requisite attention can now correct our faulty memories of the event, something that Nick Watt at the G is only too happy to help out with so Ed Balls clarifies Labour's plan for curbing welfare spending via three-year cap in event of a general election victory in 2015  is the sub-heading to Nick's piece and the first paragraph runs:-

"Labour will target housing benefit and will examine the case for further rises in the retirement age as the main ways of curbing welfare spending through a three-year cap if it wins a general election victory in 2015.

Party sources moved to clarify the "tough" decisions on spending Labour is drawing up after Ed Balls appeared to signal a major change of tack by saying pensions would be included in the cap".

See, he never said pensions would be covered by the cap, he just clearly explained that Labour was considering "upping" the retirement age as a means of keeping spending on pensions within "a cap".  I hope we have all got that now, the job of being in opposition is tough enough without us all constantly "mishearing" what Ed says.