Don’t give house room to illiberal spare-bed taxes

A MISGUIDED charity has called upon the government to take action against elderly people who live in large homes. In its outrageous report Hoarding of Housing, the Intergenerational Foundation (IF) takes aim at 25m “unused” bedrooms in England. In view of the real housing shortage, the charity’s surreal answer is that the government should tax the elderly into smaller homes. It would (how generous) exempt the over-60s from stamp duty when they sell to move to a smaller home; and it wants to replace the council tax with a land tax, “to reflect the social cost of occupying ... housing that is larger than one’s needs”. In a very welcome move, housing minister Grant Shapps dismissed the idea, replying that the elderly would not be bullied out of their homes.

The report correctly laments the decline of UK home ownership, which went down from 70.9 per cent in 2003 to 67.4 per cent today. Owning one’s home is now virtually impossible for the young. But the shortage of housing and its high cost are in large part the consequence of state interference. Supply can’t satisfy demand as land prices are kept high by legal rationing. Building is held back by regulatory restrictions. The answer isn’t to ration homes – instead, government needs to make planning permission simpler, so more houses are built.

The suggested alternative – trying to calculate when other people’s spare rooms are surplus to their requirements – presents a classic example of F.A. Hayek’s knowledge problem. How is the government’s spare room commissar to know what the rooms in our houses are used for, and how necessary they are? A spare bedroom can be an office, an occasional nursery when the grandchildren come over – or simply store the mementoes of a lifetime.

But the IF, in its arrogance, just worries that “older people are living longer and staying in the family home rather than downsizing to more appropriate accommodation”. Is government now to decide what accommodation is appropriate for citizens? The Soviet Union is not as dead as we thought.

Such thinking is fundamentally socialist: the zero-sum mentality that for every winner there is a loser. But lowering the cost of planning approval is a simple, just way to satisfy people’s changing needs by growing available resources in line with demand, not forcing the redistribution of what already exists.

The IF is arguing instead that private property rights should be torn up. “It is perfectly understandable that retired people cling to their home long after it has outlived its usefulness as a place to bring up a family in. But there are profound social consequences of their actions which are now causing real problems in a country where new house building is almost non-existent,” says co-author Matthew Griffiths. In other words, you think you own that bedroom now, but if he had his way, society would be able to confiscate it.

Such illiberal suggestions solve nothing and seek to steal away essential freedoms. The old aphorism holds true: government must stay out of citizens’ bedrooms.

JP Floru is the author of What the Immigrant Saw, published by Bretwalda Books £9.99.