NO one can say that this government is short of ideas.
It is just that every single one of them involves one thing: How to extract even more of our money.
Labour want to use you and your home as cash cows – so council spending can keep spiralling and migrants can keep coming
ReutersRachel Reeves is not short of ideas for how to extract even more of our money[/caption]
This week alone has seen a bewildering number of proposals dangled before us, many of which revolve around using our homes as cash cows.
One day we learned that Rachel Reeves is considering replacing stamp duty and council tax with a new property tax which would be levied annually on our homes, proportionate to their current value.
Then it turned out that actually this new tax wouldn’t necessarily mean abolishing council tax — it would run alongside it, raising money from any home sold for more than £500,000.
If fact, it transpired that we could face rising council tax bills.
Angela Rayner reportedly wants them ratcheted up in more prosperous areas in order to subsidise poorer ones.
Then came another suggestion: That higher-value homes might lose their exemption from capital gains tax.
It could mean anyone selling a family home having to pay 24 per cent of the profit they have made on their property since they bought it, possibly decades ago.
The Chancellor seems to have it in her head that Britain is in the midst of a housing crisis caused by greedy Baby Boomers — those born between the mid- 1940s and 1960s.
They have monopolised the housing stock, and therefore she is justified in milking them for all they are worth.
It is the same mentality that saw the Bolsheviks blaming the middle classes for every ill and sending them off to the gulags after the Russian Revolution.
Last year’s Budget already meted out punishment for buy to let investors, who were whacked with a two per cent rise in stamp duty.
Now Reeves is coming for owner-occupiers too.
But it shouldn’t take her too much to realise that her proposals would make the housing crisis even worse.
If you levy CGT on the sales of family homes, it will act as a huge disincentive for people to sell up and downsize.
Why bother, when much of the capital you hoped to release would be gobbled up by the taxman?
Punitive taxes on property ownership are just a wealth tax by another name, but they would hit millions of pensioners who are asset-rich but cash-poor.
Just because a house has rocketed in value since it was bought in the 1970s doesn’t mean that its owner feels wealthy.
It is still the same house, whatever it is worth.
The real reason for the housing crisis is low rates of house building combined with high rates of migration.
‘PUNISHING HOMEOWNERS’
When you are building fewer than 200,000 new homes a year but allowing the population to swell by 700,000 a year, it is a recipe for acute shortage.
You can’t solve that by punishing homeowners.
As for council tax, Reeves seems to think that homeowners are getting a free ride.
True, it is wrong that in one case a £36million mansion in Kensington was found to have a lower council tax bill than a flat out near Heathrow airport.
But overall, council taxpayers have been stung in recent years.
According to the Taxpayers’ Alliance, the average bill rose by 79 per cent in real terms, ie adjusted for inflation, between 1993/94 and 2023/24.
The odd absurdity in the council tax system should not be used as an excuse to push up bills for millions of homeowners.
Over the years we have faced higher and higher bills for an ever-lousier service.
The more we pay, the more our bins seem to go unemptied and deeper the potholes on our streets.
Councils like to blame rising social care costs for their poor finances, but that is only part of the story.
PAAngela Rayner reportedly wants council tax bills ratcheted up in more prosperous areas in order to subsidise poorer ones[/caption]
Other important factors are poor investments in commercial property made by many councils, and the soaring cost of over-generous local government pension schemes.
Freedom of information requests to 300 councils last year revealed that a quarter of what we pay in council tax is disappearing straight into council workers’ pension funds.
In one case, Basingstoke and Deane Council was found to be paying more into staff pensions than it was raising in council tax.
Another reason we are paying more but getting less is lousy productivity.
Astonishingly, some councils think the way to right this is to move workers to a four-day week — which they foolishly think will magically lead to them producing more.
I have a better idea.
Shift unproductive workers on to a zero-hour week.
That might just help encourage the rest to put in a bit more effort.
‘FLAPPING AROUND’
The Government is flapping around for ways of raising extra revenue because Labour backbenchers have made it impossible to cut public spending.
Reeves’ plan to trim a modest £5billion from the benefits bill was quickly reversed when Keir Starmer realised he could suffer the humiliation of a Commons defeat.
That has put an end to Reeves’ efforts to balance the books with a combination of spending cuts as well as tax rises.
Now, we are just getting the tax rises instead.
We are being hammered because Labour MPs refuse to believe there is any such thing as wasteful public spending.
Sadly, there is — and it permeates every area of government.
But clearly the current government isn’t going to do anything about it.
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