Thursday, August 07, 2008

Government dithering smashes housing market

Government dithering over stamp duty is set to cause an even worse crash than we were headed for.

The problem is this: Some journalists got the idea that Alistair Darling was going to introduce a stamp duty holiday in a similar way to that introduced by the Conservative government in the last housing crash.

The problem is that now we have uncertainty. Buyers who have to pay the tax may wait until they know because there could be a few thousand pounds in it.

This could all be a story cooked up by the media but the problem with that thesis is that we know that this Labour government (including the Tony Blair years) likes to manage news. Whereas in years gone by if a budget measure was in the press before it was announced to parliament, the chancellor resigned New Labour's news management has gone to such levels that we know about most of the budget from well briefed journalists long before hand. In other words this government has form for this sort of thing.

However no actual announcement has been made so the housing market is in limbo. The Conservative party have rightly asked for an end to the uncertainty and rightly so. We can stymie the housing market until October's pre budget report.

This is of course the problem with Labour and indeed its news management. It has no idea why things are as they are so sees no reason not to change. It sees no boundaries in common conventions. Frankly they have not got a clue and never had one either.

The BBC has this and the Daily Mail has this.

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