The problem with owning property is that it’s hard to move.
And, if the rumours are true, UK Chancellor of the Exchequer Rachel Reeves, desperate to raise funds but refusing to confront Britain’s structural problems, may be about to reach for the one thing that can’t run away: housing.
The truth is, after the Covid-19 pandemic, millions more people were parked on benefits. Welfare became the country’s single biggest growth industry. Now, instead of fixing this, the governing Labour party is going back to type: tax and spend, the playbook used by former chancellor and prime minister Gordon Brown. And if Ms Reeves reaches for a “mansion tax” or capital gains levy on family homes above £1.5 million (about $2 million), she will be detonating the last working engine of the British economy: property in London and the country’s south-east.
Britain is already one of the most taxed countries in the developed world when it comes to property. The Organisation for Economic Co-operation and Development ranks it number one in property taxes as a share of the gross domestic product. Remember France tried it, too, and watched its wealth and talent flee. The US, for now, treats primary homes far more leniently. And the places people are running to – Dubai, Singapore, Milan – are doing the exact opposite of what Ms Reeves is floating. They’re rolling out the red carpet for capital while Britain is rolling out His Majesty’s Revenue and Customs authority.
This isn’t just about billionaires. The families targeted by Labour are middle-class professionals in the south-east, the doctors and small business owners. Basically, anyone whose homes have risen in value but whose incomes are finite. These are people who’ve already shelled out tens or even hundreds of thousands in stamp duty, and now they’re told their primary residence will be treated like a speculative asset. They are the people paying the lion’s share of income tax, value-added tax and council tax. Labour’s message to them is clear: thanks for holding the country up, now here’s another kick in the teeth.
Markets know what’s coming. Government bond yields surged last week, signalling that investors are losing confidence in Britain’s fiscal credibility. That isn’t some footnote in the finance columns; it translates directly into higher mortgage rates, more expensive borrowing for businesses and a weaker pound. If Ms Reeves drives down house prices on top of that, the ripple effects will hit everything: banking, consumer spending and construction.
Property is not just an asset class. It is the collateral behind lending, the foundation of small business creation and household wealth. It’s the biggest psychological driver of consumer confidence. Destroy it, and you destroy everything.
The places people are running to – Dubai, Singapore, Milan – are doing the exact opposite of what Rachel Reeves is floating
The exodus has already begun. Non-doms have left. Wealth is flowing to the UAE, Singapore, Milan and elsewhere. Demand for London’s top-end property is down, and agents are already reporting price corrections. Ms Reeves may pretend this hasn’t dented revenue because VAT receipts look fine. But you can’t measure what never arrives: the businesses that never set up, the jobs that never came, the tax base that never grew.
“Easy to tax, hard to sell,” billionaire investor Ray Dalio once said of real estate. He’s right. But the minute you make property toxic, people draw the obvious conclusion: if they tax it once, they’ll do it again. That’s how capital flight becomes permanent. That’s how countries end up at the International Monetary Fund, begging for loans.
Labour thinks punishing property owners will rally its base of renters and public-sector workers. But it is a losing bet. Mr Brown’s raids on pensions and property helped leave Labour unelectable for nearly 15 years. His predecessor, Tony Blair, in the early years at least understood that Old Labour economics was a death wish. That’s why he invented New Labour, and why he won. Ms Reeves is throwing that lesson away.
Britain doesn’t need another redistributive stunt. It needs growth. It needs spending discipline. It needs a welfare system that doesn’t consume half the budget and keep millions idle while the rest foot the bill. But instead of fixing the problem, Ms Reeves wants to strangle the last working engine left.
Do this, and Labour won’t just sink the housing market. They’ll sink Britain. And, just like Mr Brown, they’ll sink themselves out of power for another generation.
Mohammed bin Zayed Majlis
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Profile Box
Company/date started: 2015
Founder/CEO: Mohammed Toraif
Based: Manama, Bahrain
Sector: Sales, Technology, Conservation
Size: (employees/revenue) 4/ 5,000 downloads
Stage: 1 ($100,000)
Investors: Two first-round investors including, 500 Startups, Fawaz Al Gosaibi Holding (Saudi Arabia)
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Alaan%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202021%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Parthi%20Duraisamy%20and%20Karun%20Kurien%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20FinTech%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20%247%20million%20raised%20in%20total%20%E2%80%94%20%242.5%20million%20in%20a%20seed%20round%20and%20%244.5%20million%20in%20a%20pre-series%20A%20round%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
Mohammed bin Zayed Majlis
hall of shame
SUNDERLAND 2002-03
No one has ended a Premier League season quite like Sunderland. They lost each of their final 15 games, taking no points after January. They ended up with 19 in total, sacking managers Peter Reid and Howard Wilkinson and losing 3-1 to Charlton when they scored three own goals in eight minutes.
SUNDERLAND 2005-06
Until Derby came along, Sunderland’s total of 15 points was the Premier League’s record low. They made it until May and their final home game before winning at the Stadium of Light while they lost a joint record 29 of their 38 league games.
HUDDERSFIELD 2018-19
Joined Derby as the only team to be relegated in March. No striker scored until January, while only two players got more assists than goalkeeper Jonas Lossl. The mid-season appointment Jan Siewert was to end his time as Huddersfield manager with a 5.3 per cent win rate.
ASTON VILLA 2015-16
Perhaps the most inexplicably bad season, considering they signed Idrissa Gueye and Adama Traore and still only got 17 points. Villa won their first league game, but none of the next 19. They ended an abominable campaign by taking one point from the last 39 available.
FULHAM 2018-19
Terrible in different ways. Fulham’s total of 26 points is not among the lowest ever but they contrived to get relegated after spending over £100 million (Dh457m) in the transfer market. Much of it went on defenders but they only kept two clean sheets in their first 33 games.
LA LIGA: Sporting Gijon, 13 points in 1997-98.
BUNDESLIGA: Tasmania Berlin, 10 points in 1965-66
UAE currency: the story behind the money in your pockets
HIJRA
Starring: Lamar Faden, Khairiah Nathmy, Nawaf Al-Dhufairy
Director: Shahad Ameen
Rating: 3/5
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The story in numbers
18
This is how many recognised sects Lebanon is home to, along with about four million citizens
450,000
More than this many Palestinian refugees are registered with UNRWA in Lebanon, with about 45 per cent of them living in the country’s 12 refugee camps
1.5 million
There are just under 1 million Syrian refugees registered with the UN, although the government puts the figure upwards of 1.5m
73
The percentage of stateless people in Lebanon, who are not of Palestinian origin, born to a Lebanese mother, according to a 2012-2013 study by human rights organisation Frontiers Ruwad Association
18,000
The number of marriages recorded between Lebanese women and foreigners between the years 1995 and 2008, according to a 2009 study backed by the UN Development Programme
77,400
The number of people believed to be affected by the current nationality law, according to the 2009 UN study
4,926
This is how many Lebanese-Palestinian households there were in Lebanon in 2016, according to a census by the Lebanese-Palestinian dialogue committee
Try out the test yourself
Q1 Suppose you had $100 in a savings account and the interest rate was 2 per cent per year. After five years, how much do you think you would have in the account if you left the money to grow?
a) More than $102
b) Exactly $102
c) Less than $102
d) Do not know
e) Refuse to answer
Q2 Imagine that the interest rate on your savings account was 1 per cent per year and inflation was 2 per cent per year. After one year, how much would you be able to buy with the money in this account?
a) More than today
b) Exactly the same as today
c) Less than today
d) Do not know
e) Refuse to answer
Q4 Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.”
a) True
b) False
d) Do not know
e) Refuse to answer
The “Big Three” financial literacy questions were created by Professors Annamaria Lusardi of the George Washington School of Business and Olivia Mitchell, of the Wharton School of the University of Pennsylvania.
Answers: Q1 More than $102 (compound interest). Q2 Less than today (inflation). Q3 False (diversification).
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
The five pillars of Islam
UAE currency: the story behind the money in your pockets
