From the BBC:
The government has announced what it describes as one of the biggest overhauls of financial regulation for more than three decades.
It says the package of more than 30 reforms will "cut red tape" and "turbocharge growth". Rules that forced banks to legally separate retail banking from riskier investment operations will be reviewed. Those were introduced after the 2008 financial crisis when some banks faced collapse.
The package of changes, the "Edinburgh Reforms" is being presented as an example of post-Brexit freedom to tailor regulation specifically to the needs and strengths of the UK economy.
However, critics say it risks forgetting the lessons of the financial crisis.
Famous last words. The government is clearly insane. It's like scrapping regular checks on bridges on the basis they haven't collapsed for years. This is all just setting us up for the next financial crisis starting in 2025.
If you start at the ideal kind of economy, with free and competing markets, you can either veer to the left: over-regulation, nationalisation, socialism, communism... and end up with a small handful of people living in luxury at the expense of the impoverished masses.
Or you can veer to the right: de-regulation, privatisation of national wealth, corporatism, crony-capitalism, allowing rent-seekers to run the show... and end up with a small handful of people living in luxury at the expense of the impoverished masses.
There's no real difference, is there? Russia pivoted from the Communist extreme to the crony-capitalist extreme in the 1990s, with the same people doing the controlling and exploiting.
Friday, 9 December 2022
"However, critics say it risks forgetting the lessons of the financial crisis..."
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And in amongst all that is 'consulting on a central bank digital currency'.
What an absolute weasel he is.
In any sense that matters he hasn't a clue.
But from the perspective of Tory rent seeking globalism he's probably doing just fine.
"There's no real difference, is there?"
That's because it's not really a left-wing/right-wing distinction. The same process is occurring in both cases, which is that the control of the oligarchs is becoming more obvious. Aristotle long ago correctly defined what we call a "democracy" as what it really is, an oligarchy. We have been living in an oligarchy with a facade of democracy, the Russians until 1991, when the US stripped it away, with an oligarchy with a facade of socialism. The only thing that has changed in both countries in the last 100 years is the families of the oligarchs.
B. Perhaps, hopefully, the Men on the Clapham Omnibus are now waking up to the the failure of what are supposed to be the protectors of our freedoms - MP's in Parliamnent - to control the Executive which is now transparently crony corporatist.
The real fact id that 'we' do not need 'them'. And 'they' really do not like that and are doing everything 'they' can to keep and extend 'their' power.
This is said to be the age of the Common Man. Can he (She? We?) fight this?
L, what militates against the Man on the Clapham Omnibus doing anything about it is that the "impoverished masses" that Mark refers to are not that impoverished, certainly not as impoverished as they were 100 years ago, when the Labour movement was on the rise. By and large, the triplet of evils, cold, hunger, boredom, that beset them then are confined to an unfortunate few, who can be safely marginalised. In addition, the middle classes (if you define upper class, not as aristocracy, but Mark's "small handful of people living in luxury") are also worse off. It is much easier to get worked up about the disparity in wealth between yourself and those with whom you come into contact every day than between yourself and those you hardly ever even see mentioned.
Amongst the reforms are some good ones, such as the removal of the requirement for pooled investments to provide the totally useless KIID. But few journos mention the good and worthwhile stuff. Meanwhile, MPs are ganging up to promote the benefits of land banking
https://conservativehome.com/2022/12/14/conservatives-need-to-let-go-of-the-comforting-conspiracy-theory-that-is-land-banking/
The world is getting stranger every day. Ten years or so ago, Oliver Letwin identified land banking as a problem. Now it is dismissed as a conspiracy theory
From G's link, "The problem isn’t the planning system, nor NIMBYs exploiting it to block much-needed development, oh no. It’s dastardly developers, clogging up the system by hoarding land! The reach of this conspiracy theory...."
Who believes this crap? Is it not blindingly obvious that no-one is going to sell at a discount if they can sell at full price by waiting a bit? Why would any developer want to "flood the local market with new homes in a short space of time."? The only real question is whether the writer of the article is lying or deluded.
G. yep. KIIDS are mad. e.g. to set up a simple £20K investment ISA we, in theory, have to produce 110 sheets of paper. So we don't. We email them. And....guess what....no-one reads them.
No wonder 'compliance costs' are circa 16% of our gross revenue.
Lola, in some circles, tangible benefits of Brexit cannot be mentioned
G, yes, another example of the extreme dualism our society seems obsessed with. If something is bad, it has to be all bad, nothing about it can be good.
G. The Financial Catastrophe Authority is built in the image of the EU precautionary principle bureaucratised model - i.e. 'regulationism'. Not at all laissez-faire. It's an intervention machine. Labouring under the delusion that it, itself, is capable of 'making the market work better'.
Pretty well every single one of its interventions have failed.
My mother has just died. 25 years ago, m. y father died and I had to fill in a 10 page form. My mother has just died. Her estate is 3 times the size of my father's estate, because of the increase in her house value. But I have to complete an extraordinary number of forms... They are gearing up for a wealth tax. 25 years ago, you just declared a car. Now you have to declare a number plate
Mark, I have two questions new to LVT:
First, with a 100% (not 90%) land value tax will result landowner abandomnent? I heard one time you said starts to tax the buildings if over 100%:
"Land taxes that are higher than the rental surplus (the full land rent for that time period) would result in land abandonment.["
2nd thing:
The deficit is currently £177bn. Your 2017 (2014?) estimate of tax revenue is £250bn. If tax cuts and increased govt spend is totally self financing, will this lead to permanent surplus?
The problem I have with this is: it has become accepted as gospel truth that the crash of 2008 was caused by the 1980s deregulation.
It is true there was some deregulation in the 1980s but the various Basel accords that were brought in (amongst other things) extended the regulatory compliance requirements. I did some work in banks in the 2000-2008 period and this is the era when Compliance departments started in a big way.
That's not to say I oppose regulation, but for goodness sake there many different regulations. Clearly the particular regulation that would have prevented 2008 wasn't in place. By using the phraseology deregulation in a generic rather than specific sense we can't make any sensible statement.
eg. there's a requirement that a certain proportion of any board has to be of the right gender. How of earth would that have prevented 2008? Sure, your average Guardian reader suffers the delusion that a board dominated by woman would never have permitted the sub-prime crisis, but I'm not remotely persuaded.
So by all means make a case that we need regulation but but tell me what specific regulation you want or we'll end up with a requirement that boards must be comprised of 5% trans.
mi,
1. why on earth would LVT lead to abandonment? Do people rent somewhere and then walk away? LVT is however much people are willing to pay, and preferably a bit less than that to be on the safe side.
If the LVT exceeded location rent and ate into the buildings rent, then over a long time, it would tend to lead to abandonment. But that's not LVT, LVT is not a tax on the buildings element.
2. LVT revenues would be £250 bn from a standing start. I have always said that other taxes should be scrapped to keep things broadly the same, for most people gains and losses more or less cancel out.
How much the govt spends, and on what they spend it, are completely separate topics to how taxes are raised. Most of the deficits are just government waste and outright corruption.
JM, the 2008 crash was mainly caused by phasing out of Georgism Lite which allowed house prices and lending to get out of control from late 1990s onwards.
A key element of Georgism Lite was strict mortgage to income caps. Higher or no caps = higher prices = more and more reckless lending.
And to be fair, some of the reg's brought in post-2008 were in themselves quite sensible (others were mad). And the sensible ones have now been thrown in the bin.
G, agreed. IHT is a shit tax. Random amounts at random intervals and arcane forms, raises bugger all. Lawyers and accountants etc earn more from IHT 'planning' and form filling than is raised in tax.
I have ALWAYS said, IHT would go on Day One when LVT comes in.
When somebody dies, if they were rolling up LVT, you just get a notice saying the time period since last payment and total payable. In short or medium term this will be a lot less than IHT would have been (not sure about very long term, up to people to mention it to their heirs and invite them to pay the LVT as they go along).
MW.JohnM.
There was no 'deregulation' (at lest in the UK) between 2000 and 2008. Quite the contrary. That's when regulationism really got going. The FSMA2000 was the defining Act. A New Labour/Blairite/Brown Balls mash up. Arguably the realisation of the Marxist wet dream of the central control of all money and credit. Essentially it eviscerated what was left of the BofE's banking over-sight and handed it to the FSA bureaucrats. As well as doing what MW says in removing lending controls and de facto nationalising the banking sector. Blair was then able to use constant credit expansion at the wrong (to low a) price to buy votes based on the joy of the populace at ever rising house prices. This was mirrored in the US with subtle differences. And remember the first bank to Fail was Northern Rock.
And it all failed. The house of cards collapsed. Blair's skill was to get out and leave the mess to Brown.
And it's got worse. Instead of reforming the system Osborne etc have doubled down on the failure such that the next bust will be the grand-daddy of busts.
The $64,000 question is with post that bust we move to a free and law abiding society with sound money and property rights or will 'they' double down again and seek to enslave us with programmable CBDC and all the rest of it.
(Oh and all the endowment mis-selling bollocks was all about transferring capital from insurers to consumers. From real savings funding production to
consumers to spend on consumption goods.)
"Turbocharge growth." Fetch me a bucket.
JH, indeed, and with what are we supposed to grow our GDP? The only thing that really adds value is labour and we have a labour shortage. I suppose what they mean is the fictitious growth produced by the financial sector where if A owes B £1000, B owes C £1000 and C owes A £1000, that's £3000's worth of economic activity to add to GDP.
I suspect that IHT planning and the writing of wills with residuary trusts will be the next "misspelling scandal". They are quids in for the rapidly growing "let me act as your trustee" sector but, with the mass of legislation, rather daunting for even an enthusiastic amateur. The level of paperwork I am dealing with for my late mother is daunting and I worked as an accountant in industry. I hate to think what a bank, solicitor, accountant, financial advisor would be charging for the time I am putting in. And yet, lawyers advising on wills are advising you to set up relatively complex trusts without really explaining what is required to maintain such a trust
Graeme.
Welcome to my world....
The costs of 'advising' on all this are ludicrous - bearing in mind that in my case 'compliance' costs are circa 18% of revenue and that we have to charge £x for 'compliance risks'.
". It's like scrapping regular checks on bridges on the basis they haven't collapsed for years. "
As far as I can remember, British Rail, in its dying days, did just that. They called it a "maintenance holiday".
, in this video https://youtu.be/br415hqbNGM , a professor states that it's important to make sure landlords are making a profit, but not too much of a profit as if they are making no profit they will 'leave the market'
I don't entirely understand how landlords not making less profit makes the rental supply less. Surely even the profit isn't that much, they will just sell the house to someone else who is willing to lease it out? At the end of the day wont it always be more financially lucrative to lease the place out than just to leave it empty?
TLDR: I don't understand how landlords can 'leave the market' when leasing is less lucrative, reducing rental supply, without another landlord taking their place
K, exactly! Either another landlord buys it or a tenant who becomes an owner-occupier. I once bought the house I was renting when the landlord wanted to sell - this is surprisingly common.
"I don't entirely understand how landlords not making less profit makes the rental supply less."
If you make renting not worthwhile, either because there is not enough money in it, or because there are too many rules and regulations and they favour the tenants, then the landlords will sell up, not to another landlord, but to an owner-occupier. This means that, if you need to rent, because you can't afford to buy (yet), are moving somewhere for a short time or need to move quickly, there is nowhere on the market to rent. The resulting diminution of the mobility of the nation's workforce has a deleterious effect on the economy, as does the resulting homelessness. All this was amply demonstrated in the UK from the fifties to the eighties.
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