Stamp Duty cut “illiterate” and budget abandons wind and solar power
RESPONDING to the Budget 2017, Craig Dalzell, Common Weal head of research, said:
“Philip Hammond’s 2017 Autumn Budget leaves much to be desired. In many instances, it fails to properly identify the problems that the UK economy faces and even where it does, it often offers ineffective or counter-productive solutions.
“The (lack of) environmental policies are a case in point. The tax increases on the worst diesel cars and the push to electrify transport are welcome but are more than countered by the freeze on fuel duty, the cuts to short haul air passenger duty (short haul air travel being the most polluting form of transport possible) and the push for even more oil extraction in defiance of the UK’s commitments in the Paris Accords. There was also no mention at all of wind or solar power which are rapidly becoming the cheapest as well as the cleanest form of power generation.
“On housing, the picture is similarly confused. The Conservative plan appears to be to “restore the home owning dream” and plans to do this by giving a massive bung of £15 billion to private housing developers over the next five years (substantially more than the extra funding given to the NHS over this period). This £15 billion sits on top of the £29 billion already promised for this period in previous budgets for a total of £44 billion.
“This policy will increase wealth inequality in the UK and further increase the already critical levels of private debt experienced by so many people in the UK and brings forward the day when this debt bubble triggers another economic crisis.” Craig Dalzell
“Common Weal has already shown that funding more private development will never substantially reduce house prices as doing so would inevitably cut into the profit margins of those developers. If the UK Government was serious about reducing housing costs then it would be embarking on a social housing program to rival that seen in the wake of WWII.
“The abolition of stamp duty for houses under £300,000 or on the first £300,000 on houses worth less than £500,000 has already been shown to be illiterate by the OBR, as it will simply cause the price of those houses to inflate to fill that gap on a 1:1 basis – which, thanks to the post-Brexit interest rate rise – may end up costing the buyer more in mortgage repayments than they save in stamp duty. This policy will increase wealth inequality in the UK and further increase the already critical levels of private debt experienced by so many people in the UK and brings forward the day when this debt bubble triggers another economic crisis.
“On housing and the environment, this Budget takes Britain backwards.”