UK Housing Prices & Inheritance

The Governor of The Bank of England has again warned of the risk to our faltering small recovery and of the need to build more houses or the increasing likely hood of raising interest rates to dampen down house price inflation. Also in the news is the widening gap between the rich and the relatively poor.

Political attention is likely to focus on the house price boom because for politicians this is the easy option but this is allied to increasing inequality of not just wealth but also inequality of opportunity. The main cause of inequality is inheritance and if this were tackled the housing inflation problem would largely solve itself. Many of the last generation bought homes at more or less sensible prices and have seen their value increase many times over the general inflation rates, an increase that is not earned. When they perhaps down size or die they can pass on to their children large sums which their offspring can use to buy their own homes; homes that without this unearned windfall they could not otherwise contemplate. This of course helps to both maintain and fan the fires of house inflation.

In addition to passing on their inflated homes, the wealthy also can afford to give their children the best start in life with all the advantages that money can bring and bequeath their accumulated funds that enable the offspring to acquire even more and so the cycle continues. Apart from a few exceptional individuals the poor will remain poor and indeed, become even more deprived as wealth becomes more concentrated in the hands of a small minority. The result of this imbalance is that the nation as a whole will lose out on ideas, businesses and social benefits due to the suppression of the less well off who cannot make or even recognise the best use of their talents or from lack of capital to advance their ideas.

What we need, but is at present anyway, unlikely to be done, is a strong inheritance tax which some may say is even punitive. If someone builds up huge wealth there is no reason that he/she should not enjoy a rich lifestyle for as long as they live but equally there is no reason why their children should continue to enjoy that lifestyle simply by being born into that family. Money raised from this taxation could then be used to improve the conditions of the many and provide start up funding for brilliant new ideas and enterprises.

There would be many arguments against a firm inheritance tax and it’s implementation would be difficult but not impossible. How it could be done is what we pay politicians for.

 

 

Only 10% Cut So Far and still in Recession

It’s not good is it? Officially back into the recession that we’ve barely left for two years, despite the Con?Dems austerity program. A program I might add that has so far only implemented just 10% of their planned cuts to expenditure.

This government, with no real mandate from the people is the most vicious I can ever recall, yes, worse even than Margaret Thatcher and particularly bad because they are utterly incompetent, arrogant, out of touch with reality and unable to listen. They were warned, not just by me and assorted other bloggers, but by many financial experts, that their plans pointed towards disaster. Not of course, disaster for them personally as most are millionaires well cushioned with their tax havens and trust funds but disaster for countless citizens of our lands.

Unemployment and fear thereof in the millions and rising including huge numbers of our young people who now may never get a job, hospital waiting lists getting longer, home repossessions on the increase and poorer tenants being compulsory moved from London and South East to the North, leading towards a North/South divide like never before. Thatcher left little public assets untouched but now even the jewel in the crown, our NHS, is being sold off for private profit along with our schools. It didn’t take a genius to predict all this would happen so it has to be assumed that these are deliberate policies conjured up for the sole benefit of those who have manipulated themselves into power.

The current situation tends to lead the electorate into a depressed condition whereby apathy takes over along with a feeling of individual isolation which in turn leads to a sense of powerlessness. We are not though powerless if we collectively recognise that the power is ours and we can take it back from those to whom we unwittingly lent it. We can demand change and change we will get but only if we work together for the benefit of us all. We must remind those who say they can’t be bothered with politics that politics is health, employment, education, social services, the cost of fuel, pensions or whether your sons or daughters are going to war.