Bob Piper has been a Labour Councillor for the Abbey
Ward in Sandwell, West Midlands, for 10 years. He is a lifelong supporter of Aston Villa Football Club and a follower of Yorkshire County Cricket Club.
The views expressed here are mine in a personal capacity, not those of the Labour Party, Sandwell MBC, Aston Villa or Yorkshire County Cricket Club. Get it! Mine... just mine!
Promoted by Bob Piper of 115 Barclay Rd, B67 5JZ on behalf of the Labour Party, care of 39 Victoria Street London, SW1H 0HA . Hosted (printed) by Swaithe Internet Solutions who are not responsible for any of the contents of these posts.
Please note however, that The Labour Party is not responsible for the content of this website or individual posts as, unless specifically stated, I am writing solely in a personal and individual capacity.
Promoted by Bob Piper of 115 Barclay Rd, B67 5JZ on behalf of the Labour Party, care of 39 Victoria Street London, SW1H 0HA . Hosted (printed) by Swaithe Internet Solutions who are not responsible for any of the contents of these posts.
Please note however, that The Labour Party is not responsible for the content of this website or individual posts as, unless specifically stated, I am writing solely in a personal and individual capacity.
George Osborne must be deluded if he thinks that abolishing stamp duty will help first-time buyers "realise the dream of owning their own home". Any economics student could tell him that, given supply, cutting a tax will serve only to raise the demand for housing, so putting upward pressure on house prices and negating the effect of the tax cut. Or perhaps a policy of raising house prices appeals to potential Conservative voters.
Dr Jonathan Wadsworth
Centre for economic performance, LSE
Obviously stamp duty is only part of the equation, as the short supply of housing in many areas plus increased demands of a growing population are making things very difficult.
Having said that, it was Labour didn't build enough houses and let immigration run out of control.
That was my instinct too, but if they can find some way of applying the waiver just to first time buyers then it would give them a discount over non-first time buyers going for the same house. Whether or not that is fair of course is a different question.
Gareth Williams said:
October 3, 2007 7:20 PM | permalink
"Having said that, it was Labour didn't build enough houses and let immigration run out of control."
Err lets get this right, the quote above from "A Tory" blames Labour for not building enough houses, and these peniless scrounging imigrants for forcing the price up ?
Can we hope that Labour will raise stamp duty to 10% to help first time buyers?
How price sensitive are property buyers to stamp duty anyway!?! It's Labour's perfect tax, it penalises a mobile workforce, penalises those aspiring to move up the property ladder, it's infrequent (unlike council tax), hits the middle classes in South East England particularly hard and tends not to impact MPs directly as they will have bought their family homes before any increases in stamp duties!
I assume Wadsworth will forego any reductions in stamp duty so that more of his money can go to the Exchequer.
Now, I am an economist (though undoubtedly less eminent) and I'm afraid that Dr Wadsworth is being nearly as simplistic as Osborne. Firstly, the tax cut is for first-time buyers, so they will see an advantage, even if supply is fixed as the good Doctor assumes. But, the higher house prices will also cause more supply, bringing prices down.
I think Dr Wadsworth needs to find this hypothetical student and get a refresher. He may also be reminded that taxes are by their very nature inefficient and a slab tax (like stamp duty) is more inefficient than others.
October 3, 2007 8:35 AM | permalink
Obviously stamp duty is only part of the equation, as the short supply of housing in many areas plus increased demands of a growing population are making things very difficult.
Having said that, it was Labour didn't build enough houses and let immigration run out of control.