Ah, the joys of Spring. Hosts of waving daffodils, cheery birdsong – and a mini Budget update. If the country is to emerge from its collective wintry torpor then Mr. Hammond has to grow up, be a man and cut the Stamp Duty monster down to size. The problem stems from the clumsy ‘revision’ of the Stamp Duty escalator. Not only does it bend the Residential Property Market out of shape, but it is now costing the Treasury a £1billion per annum or more to sustain.
Like many government ‘ideas’, it reeks of incompetence and failure (thank you, George Osborne for this legacy). Prospective purchasers above a £1million, i.e. mostly in London, are being hit by a slew of aggravated tax costs. Not surprisingly, transaction numbers have been curtailed by 70% and any liquidity in the market has turned to stodge. This tax is perfectly collectable, but easily avoided – as long as you don’t do anything so ridiculous as move house.
The economy needs a cattle-prod to its buttocks and the health of the Residential Property Market, retail spending and UK growth are inextricably linked.
Forget about the reflationary effects
We can forget about the reflationary effects from past mechanisms, Quantitative Easing and cheap money. Hammond needs to take action so that the UK doesn’t end up in the economic IC unit, like so many of our European counterparts.
And don’t worry about making it easier for oligarchs to buy their mansions in Belgravia; the focus should on the broader aspects of the housing sector, since it plays such an important part in the workings of our consumer-led economy. Nobody needs a runaway property market but one that grows by around 3-5% would be nice.
I propose a 3% drop in this draconian tax rate. The revenues would all then come flooding back and with the coffers used for all manner of social welfare purposes. If Phil cannot stomach this radical suggestion then a somewhat pedestrian version of reform could be to legislate for the buyer and the seller to split the SDLT liability between them.
Developers are already growing timorous and are withdrawing from the capital. This means that the 300,000 new homes target, to mend the broken housing market, will be more unattainable than ever.
Why not go even further and reduce all taxes? There’s an idea! The left wing control freaks chastise us for wanting to be the Singapore of western Europe. What is wrong with aping this highly productive, low tax Asian economy? It is ranked as the most open, least corrupt, most pro-business culture, with the third highest per capita GDP in the world. Perhaps we could have a whip-round for the plane ticket and send Mr. Hammond there to learn basic economics.
Growth in this treasure island 2.2%, which is double that of Germany today. Inflation is 0.4% and unemployment 2.1% is a far cry from the European norm of 9%. It is principally a services dominated economy (73%), similar in scale to that of the UK (80%) in this respect.
Is it any wonder that the clever Mr. Dyson has moved his headquarters to Singapore in order to launch his new electric, toy car?
‘Taxing the rich until the pips squeak’
The neo-Marxist Labour Party wants to ‘tax the rich until the pips squeak’, driving wealth creators and capital from the UK and the poor souls left behind into destitution and state slavery. The Singaporean model would be good for the UK, by dropping taxes and encouraging inward investment. Most gratifying of all, our success would be loathed by the Eurocrats, who will see it as competition for the transient investor. This will be a huge threat to their crumbling, 1950s, East German style economic model of ‘managed decline’. Or should I say, just decline…
It’s about time that the Tory Party actually became Conservative, with a big ‘C’. This would prepare fertile ground for the advent of the post-Brexit era. Thankfully, we will be inoculating ourselves against the dreaded Euro-lurgy, where affected countries suffer shrivelling growth, ravaging unemployment and painful asphyxiation-by-national debt.
Come on Phil, put the perma-smirk away and jump-start your neurons. Shrinking violets are all very well for the Chelsea Flower Show, but we need boldness, courage and fortitude to take on the Stamp Duty behemoth. Are you up to the job Sir?