Good old socialist idea, take money from someone else and give it to someone else. This, obviously, encourage budding industrialists to start up a new business.
There were 2 major problems to running an engineering business, one was trade unions and second, the cost of land/factory. This has been added to by the increase in cost of electricity to satisfy the Greens, and allowing places like China to export to the UK with no tariffs to compensate for using cheap electricity ( produced from coal), or indeed their disregard of pollution problems.
johntshea2
3 years ago
No. New and higher taxes are not the answer. To anything. Who decides which investment is “unproductive” and for whom? ALL economic activities, including property building and investment are already highly taxed in a variety of ways in the UK.
“Our ambition should be to make this country the best place in the world for people to build a business, not stash their cash.”
A fallacious distinction between two activities which substantially overlap. Unless one plans to somehow build a business without ever actually building, renting, or buying any physical building.
Adrian Smith
3 years ago
I think the housing bubble is going to burst, so those piggy banks are going to get smashed anyway. About time too. It may take a couple of years, but getting back to a level where average house prices are about 5 times average household income is what we need so our children can move into their own homes and not clutter up ours or have to pay sky high rents which sap their ability to save for a decent deposit.
I know people feel richer if they own a home that is increasing in value, but in reality it is just an illusion. You need somewhere to live so if you sell your home for more and then buy another one for more. Where is the real net gain? The only people who do lose are those selling and not buying again eg inherited houses, even they do not do so badly as they then pay less inheritance tax. Oh and all the foreigners who bought investment properties which are now worth less than they paid for them ie the people Peter thinks should be taxed. May be he is right, not now but in a few years when house prices start to increase again to stop prices getting so far out of balance with incomes again.
The biggest source of capital that has inflated various asset bubbles however is not foreign but our own QE. At the moment the government is in effect providing helicopter money by racking up massive debt. Rather than do QE, it should electronically print the new money (that is the start point of QE) and just clear its own debt. I am fairly sure that is the plan, but Boris and Rishi don’t want to admit it yet because of all the howls of “Wiemar Republic!” they will get from people who don’t realise how much money gets electronically printed the whole time anyway.
Cheryl Jones
3 years ago
Yes!!!!!! Agree with all of this. Brexit has already devalued the pound and boosted our exports. Being outside the EU can also help us to protect and develop locally while making us a global speedboat rather than an oil tanker.
Michael Dawson
3 years ago
As is often the case, Peter is on to a good point here. UK trade deficits have been persistent since the early 1980s. In any normal economic model, this should not happen, as the pound would fall, making imports dearer and exports more competitive. But if you are selling your assets all through this period, the normal models based on trade flows do not work and you end up with a chronic balance of payments deficit and foreign ownership of your biggest companies and large chunks of real estate. It’s hardly being anti-capitalist to suggest we need to look again at this whole approach.
Peter KE
3 years ago
Some interesting points. Yes the damage of an over priced currency and the the problem of property price inflation. Deal with the latter and you will help the former. Stop or make very expensive for overseas owners to own property in the UK this should have several benefits as it will release property onto the market, increase the tax take and reduce currency inflation. Stop UK residents from owning more than one property even as landlords of any kind this will be particularly beneficial for tourist and rural areas.
Good old socialist idea, take money from someone else and give it to someone else.
This, obviously, encourage budding industrialists to start up a new business.
There were 2 major problems to running an engineering business, one was trade unions and second, the cost of land/factory.
This has been added to by the increase in cost of electricity to satisfy the Greens, and allowing places like China to export to the UK with no tariffs to compensate for using cheap electricity ( produced from coal), or indeed their disregard of pollution problems.
No. New and higher taxes are not the answer. To anything. Who decides which investment is “unproductive” and for whom? ALL economic activities, including property building and investment are already highly taxed in a variety of ways in the UK.
“Our ambition should be to make this country the best place in the world for people to build a business, not stash their cash.”
A fallacious distinction between two activities which substantially overlap. Unless one plans to somehow build a business without ever actually building, renting, or buying any physical building.
I think the housing bubble is going to burst, so those piggy banks are going to get smashed anyway. About time too. It may take a couple of years, but getting back to a level where average house prices are about 5 times average household income is what we need so our children can move into their own homes and not clutter up ours or have to pay sky high rents which sap their ability to save for a decent deposit.
I know people feel richer if they own a home that is increasing in value, but in reality it is just an illusion. You need somewhere to live so if you sell your home for more and then buy another one for more. Where is the real net gain? The only people who do lose are those selling and not buying again eg inherited houses, even they do not do so badly as they then pay less inheritance tax. Oh and all the foreigners who bought investment properties which are now worth less than they paid for them ie the people Peter thinks should be taxed. May be he is right, not now but in a few years when house prices start to increase again to stop prices getting so far out of balance with incomes again.
The biggest source of capital that has inflated various asset bubbles however is not foreign but our own QE. At the moment the government is in effect providing helicopter money by racking up massive debt. Rather than do QE, it should electronically print the new money (that is the start point of QE) and just clear its own debt. I am fairly sure that is the plan, but Boris and Rishi don’t want to admit it yet because of all the howls of “Wiemar Republic!” they will get from people who don’t realise how much money gets electronically printed the whole time anyway.
Yes!!!!!! Agree with all of this. Brexit has already devalued the pound and boosted our exports. Being outside the EU can also help us to protect and develop locally while making us a global speedboat rather than an oil tanker.
As is often the case, Peter is on to a good point here. UK trade deficits have been persistent since the early 1980s. In any normal economic model, this should not happen, as the pound would fall, making imports dearer and exports more competitive. But if you are selling your assets all through this period, the normal models based on trade flows do not work and you end up with a chronic balance of payments deficit and foreign ownership of your biggest companies and large chunks of real estate. It’s hardly being anti-capitalist to suggest we need to look again at this whole approach.
Some interesting points. Yes the damage of an over priced currency and the the problem of property price inflation. Deal with the latter and you will help the former. Stop or make very expensive for overseas owners to own property in the UK this should have several benefits as it will release property onto the market, increase the tax take and reduce currency inflation. Stop UK residents from owning more than one property even as landlords of any kind this will be particularly beneficial for tourist and rural areas.