By John Pickard
A lot of people at Christmas make an extra effort to give money to food banks and charities, because it’s that time of year, isn’t it? In a civilized society, there really ought to be no need for charities, for homelessness and for food banks. But here we are, still the sixth richest country in the world, with tens of thousands of people relying on charities to get by.
It shouldn’t be necessary, but nevertheless, at this time of year, many workers’ natural social instinct is to give to others less well off than themselves and that is no bad thing. Even among workers who are not so well off, there will be a lot of families going into debt at Christmas, just to spread the good cheer for once in the year.
There is another part of society, of course, for whom every day is Christmas Day. Not even the famous 1%, although they are rich enough, but the vanishingly small number of super-wealthy, for whom income tax is optional (and usually non-existent) and who can bend and manipulate laws and rules to suit their own interests.
Superyachts in greater demand than ever
So we read in the Financial Times that because of the Covid pandemic, super-yachts had a boom Summer this year. According to the editor-in-chief of Boat International, the superyacht magazine, the number of boats in Greek, French and Italian coastal waters was “way ahead of previous years.”
Much of the world’s fleet of superyachts, according to the FT, spends half the year in the Caribbean, before crossing the Atlantic to cruise around the Med in Summer. It’s even a busy time for those chartering out to the ‘poor’ super-rich who, not having their own boats, are forced to endure the humiliation of renting them. “We’ve had so many requests for Greece this year…our main problem is there’s not enough supply [to meet] the demand”, complained one yacht broker.
A superyacht is essentially a floating personal hotel, complete with staff, and it has the added bonus during an epidemic of a higher level of security. Golden Yachts, a company that charters and builds luxury yachts has also reported an extraordinary year in 2021. “We have a high-profile clients, entrepreneurs, athletes and celebrities who are chartering our yachts feeling that it’s their safest choice for their vacation during the pandemic.”
There are also record numbers buying yachts, not just chartering them. The second half of 2020 saw more sales than in any previous six-month period, a trend that has accelerated in 2021, according to the Financial Times. In the first half of this year, 344 superyachts were sold on the market, far ahead of previous years.
Before readers of Left Horizons rush out to book for next year’s hols, bear in mind that a superyacht (which, by definition, has to be over 24m in length) can cost between tens of thousands to several million euros a week just to hire. The little beauty pictured above was going for a cool $525,000 a week. It’s a lot cheaper hiring a narrowboat on the Grand Union Canal.
Housing market rigged to suit the wealthy
If you’re super-wealthy, this year has also seen a boom in property deals. Even buying yourself an additional home will give you advantages that the plebs couldn’t dream of – like tiny or non-existent deposits and even tinier rates of loan interest. As if it’s not enough to be rich, the housing market is rigged to make you richer.
Another report in the Financial Times last month (November 5), described how a bespoke mortgage dealer for the rich was able to get his clients new multi-million properties at knock-down rates. “We used existing assets”, he says, “such as individual shares in addition to the property itself,”. He goes on to describe how he can arrange a “mortgage with a 1 per cent interest rate — terms that most UK homeowners would consider too good to be true”
While for most ordinary people, a home is somewhere you have to live, to keep a roof over your head, for the super-rich, it is just another means of dodging taxes. The Financial Times article explains, “For years the super-rich, advised by a suite of lawyers, accountants and bankers have taken mortgages — often reaching up to 100 per cent of the value of the property — on the world’s priciest homes. The majority of loans are interest-only; most are never paid off unless the home is sold; increasingly, when the home is inherited, the next generation will take out a comparable loan. The money saved can then be shuffled around the world in search of the best tax deal and the biggest investment gains.”
Deals that appeal to “criminals” and How to Spend It
The majority of these deals are not done through ‘normal’ High Street mortgage providers but are usually available through private banks beyond the reach of the man and woman in the street. As Steve Goodrich, from Transparency International UK, told the Financial Times, these kinds of deals have the same features that appeal to “criminals”, ie those “who buy homes through companies to conceal their identities”.
“UK property”, he added, “provides an attractive investment environment for those seeking to save taxes or a safe haven for suspect wealth. Currently, it’s far too easy to hide who controls substantial residential assets behind opaque corporate structures, often registered in one of Britain’s secretive offshore financial centres,”
It is parasites like these home-speculators, pushing up house prices in cities like London, who are directly adding to the burden of all of those ordinary working people who only want to buy or rent something decent and at a reasonable price.
The Saturday magazine of the Financial Times is aptly called, How to Spend It. A glance through its pages shows the kind of clothing, jewellery, perfumery – yes, and yachts – that might as well be advertised on another planet as far as 99% of the population are concerned.
A lot of readers of the Left Horizons website might come up with more appropriate names for this magazine, like How to Fiddle It or How not to tax It. Or how about, How to Flaunt It? What we would all want for Christmas, of course, is a government that acts in the interests of the big majority of the population, not like the one we have now, government of the rich for the rich and by the rich.
Perhaps we ought to bring out a new slogan, like How to Confiscate It.
