Stamp duty contortions and eco-warriors with private jets? Welcome to silly season

August is traditionally the silly season. Brexit makes this year slightly different, of course, but it is good to see a fine British tradition still being preserved. Silly stories abound. Sajid Javid was linked (erroneously, he now claims) with the idea of fixing the housing market by making sellers pay the stamp duty rather than the buyers. Sentiment around the housing market has been weakening for some time. This is certainly the case in London, where the large amounts of duty charged on expensive sales have acted as an additional deterrent. But we might reasonably wonder how shifting the tax from the buyer to the seller will make any difference at all.   An activity, the sale of a house, is being taxed. At one extreme, the buyer could offer the asking price less the full amount of the tax. At the other, the seller could add the tax to the price. Or the two could strike a bargain around what proportion each will pay. It really does not matter who is legally responsible for the tax – its existence will still have an impact on people’s desire and ability to buy and sell. An even dafter policy idea emerged from Bright Blue, ostensibly a “pressure group for liberal conservatism”. The think tank seems to have forgotten the most basic principles of how economic incentives operate. The policy wonks proposed higher fines for motorists who leave their engines idling. They went on to suggest that a proportion of the fines should be paid to the people who reported offenders to the police. So for the cost of a phone call or the time spent composing an email, you could trouser around £50.  That beats working as far as most people are concerned. The police would be swamped, not just with genuine incidents, but with scores being settled. And Prince Harry seems to be having a silly season all of his own. He suggested that people can be “unconsciously” racist. He himself demonstrates how “unconsciously” one can win the Monty Python Upper Class Twit of the Year award. Not content with lecturing a Google gathering in Sicily, attended by hundreds of private planes, on the evils of climate change, he and Meghan Markle flew for a six-day break to Ibiza, again on a private jet. Only 48 hours after their return, off they went again on an “Uber for billionaires” to Nice. It is in these trying times that the house Bible of the metropolitan liberal, the Guardian newspaper, reliably provides light relief. The travel pages eulogise “eco-lodges” in places halfway across the world like Cambodia and Peru. A piece last week created mental agony for the writer. A social enterprise, Beyond Food, is helping homeless people turn their lives around by teaching them a skill– a Good Thing not just in itself, but because it is not run by wicked capitalists.  But the skill is how to barbecue meat – boo, hiss. At least, we are assured, the meat is “sustainable”.   Markets, incentives, and social norms are the standard meat and drink of this column – and normal service on them will be resumed next week, when silly season is at last drawing to an end.
Paul Ormerod
As published in City AM Wednesday 21st August 2019
Image: Private Jets via Pixabay licensed under CC0 1.0

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ELLIE EVANS

Partner

e: eevans@volterra.co.uk
t: +44 020 8878 6333

Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.