Tax homeowners, not workers
Will Hutton’s call for moral vision in restructuring Britain (Comment, last week) may not be to everybody’s taste. But the morality of clamping down on wage inflation while allowing political parties to bribe the homeowning majority with surreal house price inflation has always been in question.
Rather than visionary policies, the crisis may better respond to the pragmatism of the banks, which are now averse to pumping cheap credit into house-price inflation. To support their better impulses, the government needs to wait until house prices bottom out, then slap on a tax (like the old Schedule A on imputed rent or, better, the Land Value Tax) to stop them going up again. This would allow the freed-up credit to flow into business, ending the morally dubious situation where property owners can make more in their sleep than workers and entrepreneurs can from providing goods and services.