The Financial Times has published remarkable data on inheritance tax in the UK. Just five London parliamentary constituencies paid more inheritance tax than the whole of Scotland and Wales combined. Ten London seats paid more than the entire north of England over five years.
But the FT then drew the wrong conclusion.
This video explains why the real story is not that Britain depends on wealthy Londoners to fund the state. A currency-issuing government does not depend on the rich for money. Instead, the data reveals something much bigger and more important, which is the catastrophic consequences of the concentration of wealth in London and the long-term failure of UK regional economic policy.
Rich peoples move to London. Woes, eh?
I aim to be rich enough to move OUT of the wretched place…
Our young have. It looks as if they are doomed to wander the world looking for somewhere unlikely to be invaded by Russia, China, the US, or the followers of the Prophet. Uruguay?
A mate visited Uruguay recently; he rather liked it.
I’d have suggested NZ until Covid let me see the quality of that horse-faced, anxiety-wracked dimwit who was their PM at the time. When we lived (briefly) in NZ neither of us even knew the name of the PM. What a healthy state of affairs that was.
In defence of NZ, we gave Jacinda the almighty boot after Covid (although sadly not during). Her policies were NOT popular.
And she only won one election, during Covid when everyone was losing their minds. She became the PM originally because Winston Peters was being a dick about the National Party at the time.
The love for Jacinda outside NZ is not matched by it inside NZ.
“which is the catastrophic consequences of the concentration of wealth in London and the long-term failure of UK regional economic policy.”
The biggest single reason for the growth of London in the past 25 years is the same as the reason for the growth of Manchester and Reading. All have large rail hubs. Lots of train lines coming in. So you can set up an office and get the skills you need from a lot of places. They became the centre of networks. They thrived where their neighbours declined.
There was no “policy” that changed things.
It’s why there’s been a bit of an unwind post-Covid. If you’re doing office work, everyone is fine with their obscure software specialist being in Huddersfield or Devizes. And if you just need normal people, you can get normal people everywhere. Which then leads to well, why bother being in London or Manchester?
Rates for software work are about the same in London or Swindon now. Which really means London is more of a status/pleasure thing. You get the hip bars, arts, restaurants.
All of this misses the point. Which is that anyone who lives in a half decent house in London is automatically caught by the inheritance tax threshold *purely because of the value of their house*. They’re not rich, they’ve just got a house.
Nor does it do them any good to have this expensive house, because they can’t realise the money unless they move a long way out of London, or downsize, or both. And many of us can’t do that..
Why can’t you move out?
Many jobs one cannot WFH all the time.
I agree. But it’s having an effect. You can see this in house prices and rail use.
Almost all my children and grandchildren live in London. In fact, two of them live with me because they can’t afford to buy a house, and renting has become very difficult unless you’re very well paid, and not easy even then.
Many people want to stay in their home towns as they get old because they want to be close to their family. Even if some don’t, that wouldn’t alter the reason why Londoners pay most IHT.
Life isn’t perfect. News to many people. Inheritance tax is pernicious anyway, mind you.
Bigger cities still maintain agglomeration benefits. Access to a bigger pool of specialised labour to hire, or more specialist service providers to contract with. More chances of meeting someone nearby to collaborate with. More stuff going on in general. WFH for certain jobs erases some of that benefit but not all of it.
Just as many hip bars and restaurants, plus free museums and cheap theatre, in Edinburgh.
And even more heroin than london.
So, Prof Prof Lord Spudcup is advocating abolishing inheritance tax?
Indeed, there is an argument there for not taxing rich people at all. Apparently the Government doesn’t need their money.
Well… Part of that is because *his* way of doing things would mean there’d be no rich people at all.
Or even wealthy-ish people.
You’d get the firing squad for saving a turnip for a rainy day though…
If our currency-issuing government does not depend on the rich for money. Why would it be a “catastrophic consequence” where they reside be it London, Singapore or Scunthorpe.
Scotland and Wales are low population density places where more of the wealth is in land. Which if agricultural is exempt from IHT. Shocker that less IHT results.
Damn that 1910 Valuation Act centralising valuations to Westminster for purpose of a unified IHT scheme. Or something.
Of course one could interpret that information to indicate London is lethal for the rich. Entirely possible.
But even more lethal for the poor.
William Blake wrote a poem about that.
Since we’re exploring the life expectancy/location of residence at time of death of the set ‘the rich’, other sets are irrelevant.
If you want to explore the life expectancy of “the rich” in London then lots of sets are relevant, not just residency at date of death – you would need mortality rates for “the rich” in London and outside London from birth up to 102. Just saying that a lot of people die in hospitals and residential care homes doesn’t make *them* lethal.
“A currency-issuing government does not depend on the rich for money…”
So we can abolish loads of taxes then?
“A currency-issuing government does not depend on the rich for money.” I guess that Ritchie has changed his stance on “Tax The Rich.”
No contradiction. The money-printing is for profligacy, the tax is for spite.
Liar. Constituencies didn’t pay them, people did. Dead people. Commie dick Murphy is always a collectivist.
Well, dumbass, yes they do. South Sudan prints up shitloads of currency. Worthless currency.
There has to be value behind it. Such as production of goods and services. And it is the wealthy who finance production. No wealthy, no production.
The wut?
Who knew there was a UK regional economic policy?
Here in southeast USA, there is no ‘regional economic policy.’ We’re going great! Perhaps UK regional economic policy is THE PROBLEM.
Oh, there’s most certainly regional economic policy where you are…..
It’s just that it isn’t poisoned or far less poisoned by DEI, Net Zero™, Moar! Tax! On! Profits! ( and anyone I don’t like…), Interest Groups, Think Tank Policy, and other such guff.
Y’know… a bit of “neo-liberal”, dare I even say “conservative” common sense..
Not ever perfect, but too far into Clownland, you get taken Behind the Barn…
Oh, there’s most certainly regional economic policy where you are…..
Nope. No such thing.
. . . here in South Carolina. The only policy is freedom. “Y’all do what you want to.”
Within the bounds of crushing Federal regulations.
‘Within the bounds of crushing Federal regulations.’
Why does this remind me of Oz???
most inheritance tax is paid on estates of less than a few million. which is pretty much a house in some parts of london. the real high wealth estates, above a few million, spend ££s to avoid paying IHT on it.