Saturday 25 October 2008

Helping the have yachts

"You're only writing about this because it involves a yacht," the Tory aide told Independent political editor Andrew Grice about his front page story yesterday.

But with yachts in the headlines, many people will be wanting to know more about how they can join the 'have yacht' classes.

Here is a helpful guide.

Doesn’t everybody already own a yacht then?

Sadly, no. Only Roman Abrahamovich is said to think that.

How much does a yacht cost?

“If you have to ask you can’t afford it”, as JP Morgan is said to have said. (Except he almost certainly didn’t. “Morgan was a singularly inarticulate, unreflective man, not likely to come up with a maxim worthy of Oscar Wilde”, according to his biographer Jean Strouse).

What he actually said was less pithy – probably something like "You have no right, or business owning a yacht if you ask that question”. But he may have enjoyed the put down even more since he was talking to Henry Clay Pierce, said to be one of the four richest men in America. (But he is unlikely to have been rude enough to call him “oik”).

But in real money?

About £25,000 - £30,000 a square foot, so somewhere between £1.25 - £1.5 million up front for a 50 foot yacht, and about the same again in maintenance costs over the next five to seven years, after which the costs would ‘increase dramatically’.

But don’t forget that would be a rather small yacht. Mr Deripaska’s Queen K cost around £80 million and is 238 foot. It is thought to be the 72nd largest yacht in the world.

But only 72nd. So what a delight it was to hear Michael Heseltine on Tuesday’s PM programme remarking that it seemed to him rather a "modest" vessel. (And this from a man once accused of the social sin of buying his own furniture by Mr Alan Clark).

Politicians like to talk about increasing social mobility. How could public policy seek to increase yacht ownership?

Good question. An imaginative approach would be to raise inheritance tax thresholds for the wealthiest as yacht-loving Shadow Chancellor George Osborne has proposed.

The government has now made it possible to leave an estate of £300,000 before paying any taxes, or £600,000 for couples, rising to £700,000 from 2010. But tax will still be payable on the proportion of the estate above this. The Conservative Party’s plans to increase the tax-free threshold to £2 million will be particularly valuable to those who inherit estates worth considerably more than £700,000.

This shows how a party which is serious about the broader vision of a ‘yacht owning democracy’ needs to target help effectively.

Critics like Treasury Minister Yvette Cooper who complain about “tax cuts for millionaires” and point out that this will reduce social mobility overall, doing nothing for 99% of people miss the point entirely. There is nothing sensible that can be done to increase yacht ownership among those people who may not even have a foot on the property ladder. The Tory targeted approach could give the asset-rich - like the 19 millionaires in the Shadow Cabinet – the lift that they need to get onto the ocean waves.

Those pesky critics will point out too that this policy does most of all for those who will already own yachts. However, some may aspire to another yacht - and that would boost the economy in these difficult times.

Since yacht owners have a reputation for being such generous hosts, this is a ‘spread the wealth’ policy to be proud of.

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