It has been brought to my attention that, under a little bit of pressure, Labour spokespersons are beginning to talk about ideas, rather than merely exclaiming that a particular cut is the wrong cut, in the wrong place, at the wrong time. And whilst that might be true, it isn't very helpful in terms of addressing the public finances.
However, as usual, Labour do seem to be rather keener on finding ways of cutting Government income, rather than cutting expenditure, Liz Kendall's rather more honest piece in the Guardian honourably excepted. And, having failed to convince many people that cutting the standard rate of VAT back to 17.5% is a good idea, today's proposal form Ed Balls to use the income from selling 4G spectrum to, in part, introduce a stamp duty holiday for first time buyers is another of those seemingly obvious, yet curiously ineffectual, proposals that he appears to be good at.
Guido Fawkes has already covered the HMRC report which indicates that the last stamp duty holiday may have had precious little effect, and I suppose that, if you think about it a little bit, it's obvious why;
- If you're struggling to save up for a deposit, and in much of the country, it's going to be a struggle, taking a few thousand off of the asking price isn't likely to make a huge difference.
- Some of the saving is likely to be eaten up by sellers increasing the price a bit to take advantage.
- It doesn't persuade people to put their houses on the market, especially outside of London and the South East, where prices are no better than stable for the most part. If you've lost money, or are in negative equity, you're not going to want, or be able, to sell.
- If you are worried about losing your job, and there are many out there, particularly in the public sector, who are, you might not want to be committing yourself to a large mortgage.
- Oh yes, and mortgages. They're not exactly easily available and, if you can't get one, you can't buy a house.
If the HMRC report is correct, in that the stamp duty holiday only boosted house sales by 2%, if at all, and that the benefit mostly accrued to people who were going to buy anyway, it's a way of spending quite a lot of money for very little benefit.
So, come on Ed, you can do better than that... I hope...