The City’s stranglehold makes Britain look like an oh-so-civilised mafia state

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The City’s stranglehold makes Britain look like an oh-so-civilised mafia state

Be reasonable in response to the unreasonable: this is what voters in the Labour election are told. Accommodate, moderate, triangulate, for the alternative is to isolate yourself from reality.

You might be inclined to agree. If so, please take a look at the reality to which you must submit. To an extent unknown since before the first world war, economic relations in this country are becoming set in stone. It is not just that the very rich no longer fall while the very poor no longer rise. It’s that the system itself is protected from risk. Through bailouts, quantitative easing and delays in interest-rate rises, speculative investment has been so well cushioned that – as the Guardian economics editor, Larry Elliott, puts it – financial markets are “one of the last bastions of socialism left on Earth”.

Public services, infrastructure, the very fabric of the nation: these too are being converted into risk-free investments. Social cleansing is transforming central London into an exclusive economic zone for property speculation. From a dozen directions, government policy converges on this objective.

The benefits cap and the bedroom tax drive the poor out of their homes. Theforced sale of high-value council houses creates a new asset pool. An uncapped and scarcely regulated private rental market turns these assets into gold. The freeze on council-tax banding since 1991, the lifting of the inheritance tax threshold, and £14bn a year in tax breaks for private landlords all help to guarantee stupendous returns.

And for those who wish simply to sit on their assets, the government can help here too, by ensuring there are no penalties for leaving buildings empty. As a result, great tracts of housing are removed from occupation. Agricultural land has proved an even better punt for City money: with the help of capital gains, inheritance and income tax exemptions, as well as farm subsidies, its price hasquadrupled in 12 years.

Property in this country is a haven for the proceeds of international crime. The head of the National Crime Agency, Donald Toon, notes that “the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK.”

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