Wednesday, July 24, 2013

Andy Murray and spare bedrooms: Just what is going on?

One winner was Andy Murray over Novak Djokavic. What we all won was yet another splendid demonstration of fairness. With the maximisation of skill, bounded by a strictly enforced rule book, absence of umpire bias and cheating, for a short time a tennis game transported us to a fair world.

Then we are jolted back into reality where progress to fairness for ordinary people is grindingly slow and where our political umpires seem to be showing extraordinary bias against the have-nots but for the haves. A current picture of this in the UK is the 'bedroom tax' where, if people receiving housing benefit are 'under-occupying' [i.e. have a spare bedroom] their benefit will be sliced. Some people might be evicted if they cannot afford to make up the balance from their own earnings. Some may be forced out of their neighbourhood.

At the same time the government is helping the housing-haves under the Help to Buy scheme.
Ed Conway in The Times:  George Osborne wants first time home buyers to be able to afford a home, and to do this he is flooding the housing market with £12bn extra mortgage support money - so house prices are bubbling up and making homes less affordable! The deal is to be available up to £600k value hones. House prices are very high at x7 average income compared with the historic x3/x4 income and the Chancellor is perversely making them even more so. Effectively people are being egged on to get more spare bedrooms - if they are buyers. Existing home owners will see a rise in their wealth; but more people will have to rent a home and rents are rising. So much for fairness, and anyway has George Osborne not heard of the US sub-prime housing support that was a trigger for the financial crisis? What is going on?

What would bring more fairness is an extension of the planned annual Mansion Tax to be levied on high value homes. If this were to cover every piece of real estate - that is the land a building sits on - as an annual charge on its value (land value tax): house prices would drop becoming more affordable; owners would build on empty land; empty homes would be sold for occupation or rented, thus adding to the price drops and lower rents. More homes are needed and land value tax would be a way to get many of them build or used, whilst sparing many green fields.

Other links:
Shelter: Bedroom Tax explained
Rev Paul Nicolson is campaigning against the bedroom tax and the welfare benefit cap, in London.
Buy the book The Free Lunch - Fairness with Freedom new low price £8 with free p&p.
Posted by Charles Bazlinton

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