Gateshead Angel wrote:
Telling half a story cannot possibly be constrewed as letting people know the truth about the trade. If you were to say that many years ago these plates were first issued by the council to people without charge who have subsequently sold the right to operate that plate to the vast majority of current plateholders, for many thousands of pounds. Then you may be getting somewhere close to the real truth.
What you are trying to get people to believe is that every current plateholder got their plate for free and are now trying to sell them for thousands of pounds, and there is little honesty in that.
For crying out loud, a few hours before you posted that, and handful of posts further up the thread, I said:
As for those paying the premium, they do so on the basis that they will be making future excess profits to pay for it, and in the long run will be quids in. Of course, this comes off the backs of the paying public and/or journeyman drivers, so I think you are deluding yourself a bit about hard work.
The point you make has been addressed numerous times on here, and is on the frontpage as well for all to see.
For example, in the Govt U-turn piece we said, in response to a claim like your own:
This seems a rather superficial view, however. For a start, it seems to assume that all licenses in restricted areas have been acquired for a premium, which is obviously not the case. It also seems to say that, for example, someone who bought a plate for £5,000 in an area where plates are currently worth £40,000 has gained nothing, and that the only gains were made by the individual who received the plate for nothing then sold it for the £5,000.
Indeed, Mr Kay seemed to contradict himself in this regard when he said that in New York as the market became more distorted the original medallions holders made capital gains, but why should subsequent purchasers not make such gains, as outlined above, since there is nothing to stop further 'excess profits' accruing subsequent to the original license holder selling it on. Indeed, as we all know, UK plate holders are still making substantial real terms gains irrespective of whether they have received the license gratis, or a substantial time ago for a relatively small sum, or fairly recently for a substantial sum, the hiatus during the OFT uncertainty excepted.
In Myth and Reality:
However, it is often claimed that those who have bought a plate gain no advantage – they buy the right to excess profits at the going rate. But it seems clear that, given that plate values in many locations are gaining in value at rates several times higher than inflation, many plate holders end up earning excess profits even though they have bought the plate – this could be due to many factors, but possibly primarily due to the cartel tightening due to no plates being issued or fewer being issued than the market would demand – this issue is covered in more detail in the next chapter.
But assuming that the gains in value of Liverpool plates accrued evenly throughout the decade, and ignoring inflation, someone who was granted a free plate a decade ago and sold it five years later for £15,000 has gained no more in capital appreciation terms from the closed market than the person who bought the plate for £15,000 five years ago, and has seen it rise in value to £30,000 now.
While these gains have accrued over time, there are of course those who are awarded a ‘free’ plate in a restricted market, and the gains are obviously immediate – for example, a new plate issued in Manchester gains an immediate value of £45,000 or so, and the number of new plates granted are generally small enough not to materially affect the market as a whole – if a relatively large number were granted at once then this would obviously depress the value of each plate.
Last but not least, have a read of the following, which takes issue with the OFT's view that those purchasing plates have just taken a simple risk and deserve no consideration.
http://www.taxi-driver.co.uk/money.htm
You seem to have a very selective memory, either that or you just make huge assumptions without ever bothering to read things.
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FAQ
if you're trying to crack a joke Mr T, and maybe also turn your 'Caps lock' key off - it's considered rude to shout (ie use only CAPITAL LETTERS) on the internet.
