Friday, October 19, 2007

Citizen Andreas: Do the Maths, Find Out the Tories

Inspired by divergence of opinion between myself and Mr Dale on a 37% Tory claim re IHT Citizen Andreas has done some digging and some hard sums.

A recommended read for the details. The post shows that the Tory claim that 37% of houses will be affected - despite the FACT that only 6% of estates actually are - is based on an average house VALUE of £210,000 with no loans whatsoever outstanding and £94,000+ of other assets that make it into a person's estate.

I've three points to add:

1. The fact that someone's house is worth £210,000 is not the same as them having equity in it of £210,000. The idea that the 37th percentile of equity held is £210,000 seems very unlikely.

2. Scottish Widows/You Gov (who did the survey) have apparently not included other types of houses. Rented from social or private landlords.

3. None of these parties have allowed for the existing arrangement that have been available for some time to those families with good (expensive) tax planning and are now available to all.

Assuming all mortgages are paid off, not including the rented sector, and not including a known tax gimmick must account for the fact that IN THE REAL WORLD only 6% of estates pay IHT. Less than one sixth of the Tory prediction. They're not so stupid that they didn't realise this are they? But if they did realise then they must be liars!

Are Tories very very stupid? Or do they tell big bad porkies?

Figures being quoted by a financial institution with an interest in making people think they should have more equity in the sort of schemes they, now there's a coincidence, happen to be selling, are clearly not reliable. They're known to risk a bit of mis-selling for the sake of a fat commission.

As we revealled here Channel 4's excellent factcheck service found that Tory positioning on Labour's tax regime was 90% mendacious while on the likes of IHT and non doms their own plans were a mere 60% mendacious.

Which is - let's be completely fair here - a 33.33% improvement in accuracy, albeit from a very low start indeed.

BELLY LAUGH: If you go to Comments on this post you can find Mr Iain Dale, that's Mr ID himself, suggesting that a blogger other than himself (aw shucks) has "an ego the size of a mountain".

CAPTION: As Dustin Hoffman could have told us instantly there are 18 monopoly houses in the illustration above. Before recent changes only about ONE of the above, around 6%, had to pay Inheritance Tax. Now we can add the 17 more below with only around 1:35 being liable. In this regard at least the New Labour Project's socialism quotient is homeopathic. Sadly nothing to be scared of for the well to do. Though such homeopathic socialism has meant we can have the minimum wage, huge investments in public services, and the minimum income guarantee for pensioners too. Not all bad then.


Sean said...

I do not think you like Mr Dale.

Chris Paul said...

Oh. I like Mr Dale alright. It's his fibs and his fictions and his etiquette that need watching.

You know it's a sins and sinners kind of thing ... making that 37% claim is so unreasonable and dishonest. Cannot let it pass.