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"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice" - Adam Smith

Stamp duty: The truth

Written by Xander Stephenson | Monday 01 June 2009

Following recent revelations that some MPs have been claiming stamp duty on second homes as parliamentary expenses – notably Theresa Villiers (£10,350) and Kevin Brennan (£10,200) – and bearing in mind that when Labour sold their Westminster HQ back in 2006 they avoided a £210,000 stamp duty bill, it is perhaps time to concede that the politicians haven’t got it all wrong: perhaps this is a tax we shouldn’t be paying.

Whilst avoiding this tax would appear to have been standard practice in Westminster, in the rest of the country revenue raised by stamp duty on residential property had increased markedly under Labour, soaring nearly eight-fold from £830 million in 1997/98 to £6.5 billion in 2006/07. This has been partly due to a move away from a single rate to a tiered system and partly due to an increase in house prices. Put into perspective, the Stamp duty land tax (SDLT) is currently increasing at five times the rate of UK salaries. Annual gross income in the UK rose by 54.3% between 1997 and 2007, whilst the stamp duty bill on the average UK property rose by 289.2% in the same period.

Raising the thresholds in line with house prices would be a good start as would a tiered rate system where consumers are only taxed on the proportion of their property value that exceeds the stamp duty threshold rather than the current system which levies a higher rate on the entire value of a property when a band is crossed; this places distorting pressure on prices in order to remain with a particular stamp duty band. It also induces people to sell their house at a particular price within a lower band on the condition that the purchaser buys the contents of the house at a fixed price and other such unusual behaviour.

As the average UK house price have increased, more and more people are drawn into a system that taxes a necessity as a luxury.

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Lords are leaping

Written by Xander Stephenson | Wednesday 08 October 2008

An oft-held criticism of the House of Lords has been that its in-built conservative majority makes a mockery of representative democracy and leads to more labour defeats in the second house than conservative ones. Labour’s reforms have gone some way in correcting this.

It now seems likely that 42-days detention will be bounced back from the Lords by a 3-figure margin. Perhaps it is time to blame this defeat on the upper house’s renunciation of a truly awful piece of legislation rather than the actions of an unrepresentative house keeping the Labour government down.

Labour is unlikely to resort to using the parliament act to force through this controversial legislation as it is unconventional to use the act to achieve anything which does not appear in a party’s manifesto. It would also be the fourth use of the parliament act since 1997 meaning that New Labour was responsible for half of all the uses of the act since 1911 when it was introduced.

Perhaps we can look forward to a reversal of the existing 28-day without charge law in the future to bring us more in-line with other democratic nations. But, for now, at least we can be more confident that soon it will not be legal for a person to be held for over a month without knowing why.
 

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No delivery costs?

Written by Xander Stephenson | Saturday 22 December 2007

Just throw the book at them...

Last week the French Booksellers' Union won their court-battle. The French people will now have to pay delivery charges for Amazon orders rather than be entitled to free delivery.

This is in order to protect French bookstores from 'unfair' competition. The result surely has to be that Amazon is more expensive for the French. However, customers buy books from Amazon for many good reasons; time, effort and cost; it is one of the most efficient ways of buying books. It is hard to believe that having to pay another 5 Euros is going to drive people onto the freezing streets of France this Christmas in order to patronise their local bookshop.

French people will continue to use Amazon for convenience but pay more for the privilege; if I was a French person – and luckily I'm not – I would be quite irate at the French Booksellers' Union for this early Christmas present. I would exercise this anger by voting against them with my money and continuing to use Amazon.

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