The Tories’ latest bright idea: copy Gordon Brown
SORRY, i know i promised not to write about the election until nearer polling day, but some things can’t be allowed to pass without comment.
Take the Tories’ pledge to raise the inheritance tax threshold to £1 million. Most reasonable people, me included, agree that this is both welcome and long overdue.
But. And there is always a But. They intend to pay for it by cutting tax relief on the pension contributions of high earners.
so what, you may think. Who cares about the rich, rich? They can afford it. Maybe they can. That’s not the point. Yesterday there was another story about the boom in buy-to-let properties, which have soared in value by a staggering 1,400 per cent since John Major left office in 1997 and are now outperforming all other investments. Why do you think that’s happened? it’s because after Gordon Brown staged a smash-and-grab raid on pension funds to pay for his drunken sailor public spending spree, the better-off decided to look for alternative ways of making provision for their retirement.
Money which would have gone i nto pensions was diverted into buy-to-let properties. The result is that the price of homes, especially flats, has gone through the roof.
First-time buyers are priced out of the market, so the Government has had to introduce a help-to-buy scheme, at a cost of goodness-knows-how-much.
if we didn’t have a boom in buy-to-let there wouldn’t be any need for help-to-buy. Now the Conservatives are intending to repeat Brown’s folly. Brilliant. Those remaining high earners who have been stupid enough to keep their money in pensions will decide that this is the final straw and they’ll pile into property.
That will mean even fewer affordable homes for young people trying to climb onto the first rung of the ladder.
The knock-on effect will be that within a few years, an average suburban semi in the south east will be worth more than £1 million. And then there will be a clamour to raise the inheritance tax threshold again.
politicians talk about joined-up government, but none of them ever think through their policies or appear to have heard of the Law of unintended Consequences.
As Homer simpson would say: D’oh!