Usually when a Chancellor announces their budget, it takes a while to unravel the spin and bluster to cut through to the real substance behind what has just been announced.
However, with Philip Hammond’s Budget speech today, there was very little even the notoriously spin-happy Tory party could do to disguise a critically stagnating economy with desperately low wages compared to an ever-rising cost of living.
Hammond’s stark announcement that the Tories would be abolishing Stamp Duty for houses under £300k (and under £500k in London) looked like a shining gem of a policy amongst a sea of utter gloom.
However, with this one positive announcement, the Tories have once again managed to take the public for a ride.
The Office for Budget Responsibility (OBR) says that the abolition of Stamp Duty would feed into house prices 1:1. In Layman’s terms, this means that because houses are in such critical demand, prices would actually INCREASE to take into account the reduced burden of Stamp Duty.
As noted in an extract on the Stamp Duty announcement, uncovered by Labour MP Alison McGovern, the OBR writes that the temporary abolition of Stamp Duty would:
feed one-to-one into house prices
The document then compounds things for Generation Rent, by stating:
…the main gainers from the policy are people who already own property
And, should the Stamp Duty cut be made permanent, the OBR estimates that house prices would be:
higher with the relief than without it
*STAMP DUTY SMALL PRINT*
The Tories were told by the OBR that abolishing stamp duty would actually INCREASE house prices due to the current huge demand.
The subsequent house price rise will cancel out any savings made. Policy announced for good publicity only.#Budget2017 pic.twitter.com/BkOFDF5EDM
— Evolve Politics (@evolvepolitics) November 22, 2017
Smoke and Mirrors
The Stamp Duty announcement is yet more smoke and mirrors from a Tory government in absolute turmoil. The policy will inevitably gain widespread positive attention throughout the right-wing press, with Tory-backing editors inevitably doing their best to ignore the very revealing OBR forecast predicting a subsequent increase in house prices that will actually hit first time buyers the hardest.
Rather than doing what the Tories claim it will do, as the OBR says, abolishing Stamp Duty will merely reduce the amount of money in the public purse whilst increasing incomes for property developers.
And, with the Tories announcing absolutely no plans to increase the pitiful amount of houses being built in Britain, prices are not going to go down.
If the Tories really wanted to help Generation Rent get on the property ladder, this policy is not the answer. It is actually completely the opposite.
The only people who will benefit from the abolition of Stamp Duty will be the already-wealthy.
What a f*cking surprise.
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