British state offers socialism to wealthy homeowners and higher taxes for everyone else

Perhaps the most damaging thing about the, quite possibly terminal, mess that is currently engulfing Downing Street is the overwhelming feeling that It is unfair. At a time when the country was confined, with its people preparing to have to cancel Christmas itself on pain of fines or even arrest, the Prime Minister’s entourage was literally throwing a party and decided to lie about it. (The Metropolitan Police made it clear that there would be no fine or arrest on this occasion.)

The ruling class clearly does not see itself as bound by the rules it imposes on the rest of us; and the apparent attempt to inform friendly right-wing newspapers that what is happening in Downing Street literally is not bound by the rules imposed on the rest of us, because of Crown Domain, something doesn’t solve the situation so much as lighting a neon sign that says “SEARCH, THAT’S EXACTLY THE PROBLEM”.

I mention all of this partly because I’m furious (I mean, really), but mostly because it resonates so well with the topic of this week’s sermon. In another area of ​​society too, there is a gulf between a group that politics protects but does not bind, and one that it binds but does not protect. And it breaks things. The difference here, however, is that the two groups are much more equal in size. This makes it much more difficult to resolve.

Almost forgotten this week amid the chaos in Downing Street – and the new baby, and the wallpaper scandal, and the attempt to redefine British citizenship, and, and, and – was a Resolution Foundation housing market report . The think tank found that around one-fifth of the country’s total wealth – some £ 3,000,000, or, to be clear, three million million – stems from the surge in house prices observed since 2000.

[See also: Who made more this year: you or your house?]

This is not an increase that means something is actually improving, remember: most simply reflect a willingness to pay more money for something that was already there. It is of course horribly unfair in its distribution as well. the average gain was £ 76,000 in London, but only £ 21,000 in the North East. The bottom third of households earned less than £ 1,000 per adult thanks to the boom; the richest 10 percent, an average of £ 174,000.

The main division, however, is generational. The beneficiaries of this boom have largely been those who already bought houses before the turn of the century. Those who bought later – if they can buy; in no case a given, of course – will not benefit at all from the boom. Instead, it’s their hard work and debt that pays for the bloody thing. This increase in wealth is an illusion. It is money borrowed from our children.

Researchers at the Resolution Foundation raise this question not to rejoice in the fact that the little space they bought in the 90s is now worth three-quarters of a million and aren’t they clever, but to highlight obvious some possible ways to remedy it. Reforming – that is, increasing – inheritance tax could increase to as much as £ 3 billion a year. A carefully crafted tax on increasing the value of people’s primary residences could increase much more, potentially up to £ 11 billion. In terms of fairness, something like that would be obvious. Right now, most tax hikes target the youth, the poor and the homeless, through increases in student loan repayments or national insurance. Much better, surely, to target the necessary tax hikes on the huge increase in unearned wealth?

[See also: How to crash the housing market]

But of course, we won’t: we won’t even discuss it seriously. A Conservative government whose electoral success was built on appeasing the over-50s will never touch real estate wealth in a million years; The electoral opportunity means it’s hard to imagine Labor getting anywhere near it either, and after the storm that accompanied Ed Miliband’s proposals for a mansion tax, who can blame them. The group that profited from the boom considers this money they never made their own, and there is a lot of it, and they are sedentary rather than transient – and they vote.

It is the crippling injustice that skews our political debate, on everything from tax increases to reforming social services to changing the planning system to ensure we have enough housing. There is one group, which our political classes will bend over backwards to protect unearned wealth, and another should foot the bill. The longer it lasts, the more unfair it has become – and the more irrationally courageous a politician would have to be to fix it.

Maybe Boris Johnson will fall soon. Perhaps the “another rule for them” problem will end it. But don’t expect what comes next to sound fairer. Rot goes much deeper than a single Christmas party.