Legendary stupidity from an ailing government trying to buy safe passage through the next election:
Homebuyers will not have to pay stamp duty on properties costing £175,000 or less for the next 12 months.
You cannot stop the market from finding its own level. This measure will at best delay the inevitable and at worst cost the Treasury £600m in tax revenue without significantly impacting the housing crash. The measures don’t stop there though – there’s more stupidity to come:
* “Free” five year loans of up to 30% of a property’s value for first time buyers of new homes in England
* Extension of powers for councils and housing associations to be able to pay off debt for homeowners who can no longer afford mortgage payments and then charge rent.
* Shortening from 39 weeks to 13 weeks the period before Income Support for Mortgage Interest is paid
* Bringing forward spending from future years to encourage more social housing to be built
The funding for these measures, which unlike the stamp duty move will only apply in England, has been previously allocated and brought forward, the Treasury said.
So this funding is just being ‘brought forward’ then? Does that mean the government was planning to introduce the 13 week period for Income Support anyway? I don’t believe it. The entire nation is borrowing from the future to save the skin of Gordon Brown.
Recessions are not pleasant for most of us but they are necessary to correct the market after a period of runaway growth. Mr Brown’s protestations of unique circumstances not enountered for generations are ridiculous. We regularly have boom and bust in pretty much every market.
The government recently added nearly £100bn to the national debt with the Northern Rock fiasco – that’s around £3,000 for every household in the land. In 2007 the national debt was estimated at 43% of DGP (Source: CIA World Factbook) which ranks us 50th worst in the world. However there have been others who argue that much of our debt is disguised:
The respected Centre for Policy Studies think tank says the official Treasury figure of £487 billion wrongly excludes the cost of public sector pensions liabilities, the hidden costs of Labour’s flagship Private Finance Initiative contracts and debts incurred by Network Rail.
When these are taken into account the total is £1,340 billion, which is 103.5 per cent of GDP
So while Gordon and his buddies go about freely spending our money let’s not forget who will pay the price in years to come.