Darling backs away from stamp duty cut

Published 11th Aug 2008

The chancellor, Alistair Darling, is prepared to disappoint millions of would-be home buyers by ruling out proposals to revive the housing market, Treasury insiders warned last night. After a chaotic week of claim and counter-claim about Treasury plans to suspend stamp duty for first-time buyers, Darling has hardened his stance against the move, which he believes could cost billions to little positive effect.

Senior officials said the Chancellor might well take no action to prop up the market in the Pre-Budget Report this autumn. 'Alistair is not going to be buffeted into doing something by headlines,' said one insider. 'If the evidence is there that suspending stamp duty would help, then we will look at it. But at the moment the evidence is not there.'

Although work is under way on a range of options involving possible changes to stamp duty and other measures to help buyers, there is deep scepticism about the idea in the Treasury.

Whitehall sources suspect that Downing Street - desperate for some good news to bolster Gordon Brown's fortunes - encouraged newspapers to report that the government would help first-time buyers by suspending the one per cent stamp duty payable on homes between £125,000 and £250,000.

Darling's move to dampen the speculation followed claims from estate agents and opposition parties that government dithering over stamp duty had inflicted further damage on a market already in freefall, as people put off decisions and waited for the cut to be introduced.

But it is also evidence of the Chancellor's determination to assert his independence of Brown and the Number 10 machine. Officials insist he will take 'the right long-term economic decisions', rather than act for 'political reasons' to get a few days of positive headlines.

Vince Cable, the Liberal Democrat Treasury spokesman, said the stamp duty idea was ridiculous. 'What sort of a signal does it send when the government has to offer a bribe to get people to enter a declining market?' he asked.

Source: ' guardian '

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