The State Made These Rents, Then Called Them Unearned

In July the Bank of England's own officials conceded that the crisis-era bond buying had "lined investors' pockets rather than boosting the economy". The Telegraph put it in the standfirst without softening: Threadneedle Street's £20bn experiment "just enriched shareholders". Hold that alongside the charge that Britain has become a rentier society and the sequence is plain. The rents were not stolen by savers. They were created in a central bank, deliberately, and handed to whoever already owned an asset.

Which is why the proposed remedy is the wrong way round. Sherelle Jacobs argues that the wealth tax Labour has been mulling "is not just practically unfeasible. It is a moral abomination" — that it "represents property theft, violating the individual's right to justly acquired wealth", levied on assets "already taxed on their gains, interest and dividends". The sharper complaint is with the right itself: since Thatcher's downfall, Conservatives have "conceded the moral high-ground to the Left" and argued only from the Laffer curve, as though capitalism were a regrettable necessity rather than the thing that produced the wealth in the first place.

The state printed the asset boom, watched it happen, and now proposes to tax the people it happened to. That is not a correction. It is a second helping.

None of which is a defence of the triple lock, and this is where the reading stops being a reflex. Philip Johnston's column runs under the line "A comprehensive reform of the triple lock is needed because the entire system is simply unaffordable", and Mel Stride said as work and pensions secretary in December 2024 that the lock was unsustainable and could not last forever. A formula that ratchets upward whatever the economy does is a claim on future taxpayers who have not been consulted, and it is not private property in any sense the previous paragraph defends.

The same test applied to housing gives the same answer. Pressure on the government for a "double lock" cap on rents treats the landlord as the cause rather than the supplier, and every rent control ever tried has removed homes from the market rather than lowering their price. Reform's counter-offer of tax-free new homes to revive buy-to-let starts from the same diagnosis — rents are too high — and reaches for supply instead of a ceiling. One of those instruments builds houses. The other rations the ones that exist.

In July the Bank of England's own officials conceded that the crisis-era bond buying had "lined investors' pockets rather than boosting the economy". The Telegraph put it in the standfirst without softening: Threadneedle Street's £20bn experiment "just enriched shareholders". Hold that alongside the charge that Britain has become a rentier society and the sequence is plain. The rents were not quietly stolen by savers while the country looked away. They were created in a central bank, deliberately, as declared policy, and handed to whoever already owned an asset — which is a different fact with a different culprit and a different remedy.

Which is why the proposed cure is the wrong way round. Sherelle Jacobs argues that the wealth tax Labour has been mulling "is not just practically unfeasible. It is a moral abomination" — that it "represents property theft, violating the individual's right to justly acquired wealth", levied on assets "already taxed on their gains, interest and dividends". The sharper complaint is with the right itself rather than with Labour: since Thatcher's downfall, Conservatives have "conceded the moral high-ground to the Left" and argued only from the Laffer curve and the risk of capital flight, as though capitalism were a regrettable necessity to be defended on grounds of efficiency and never on grounds of justice.

The state printed the asset boom, watched it happen, and now proposes to tax the people it happened to. That is not a correction. It is a second helping.

The obvious objection is that this is convenient: blame the state, and the beneficiary keeps the proceeds. It deserves an answer rather than a shrug. The answer is that the beneficiary is not who the caricature says. The median holder of a mortgaged house in the South East did not lobby for quantitative easing and cannot realise the gain without buying another house at the same inflated price. A tax on net assets reaches that household long before it reaches anyone with a family office, because the family office is mobile and the house is not. Every wealth tax in Europe has discovered this in turn, which is why most of them were repealed by the governments that levied them.

None of which is a defence of the triple lock, and this is where the reading stops being a reflex. Philip Johnston's column runs under the line "A comprehensive reform of the triple lock is needed because the entire system is simply unaffordable", and Mel Stride said as work and pensions secretary in December 2024 that the lock was unsustainable and could not last forever. A formula that ratchets upward by the highest of three measures whatever the economy does is a standing claim on future taxpayers who were never consulted about it. It is a transfer, not a property right, and nothing in the previous paragraphs defends it.

The same test applied to housing gives the same answer. Pressure on the government for a "double lock" cap on rents treats the landlord as the cause rather than the supplier, and rent control has a record: it removes homes from the market rather than lowering their price, and the homes it removes are the ones let by the small landlords least able to absorb the cost. Reform's counter-offer of tax-free new homes to revive buy-to-let starts from the identical diagnosis — rents are too high, the young cannot buy — and reaches for supply instead of a ceiling. One of those instruments produces houses; the other rations the ones that already exist and calls it fairness.

So the reading is not that nothing is wrong. Something is plainly wrong when a generation cannot buy the houses its parents own. It is that the diagnosis has been pointed at the wrong organ. Cheap money inflated the assets, planning law kept the supply fixed while it happened, and a pension formula ratchets a further claim on top. Undo those three and the rents fall on their own. Levy 2 per cent on net assets and you will have moved some money once, taught the mobile to leave, and left every one of the three mechanisms exactly where it was.