A blog by Luke Akehurst about politics, elections, and the Labour Party - With subtitles for the Hard of Left. Just for the record: all the views expressed here are entirely personal and do not necessarily represent the positions of any organisations I am a member of.
Within 24 hours of each other the Tories propose to cut inheritance tax for millionaires whilst Labour cuts stamp duty for people buying homes costing under £175,000 and allocates more money to social and affordable housing.
posted by Luke Akehurst at 5:58 pm
Labour MP for North Durham since 2024. Labour Party activist since 1988 - firmly on the moderate wing of the party. Member of Labour’s NEC 2010-2012 and since 2020. National Secretary of Labour Students 1995-6. Parliamentary candidate for Aldershot (2001) and Castle Point (2005). Hackney Councillor (Chatham Ward) 2002-2014, Labour Group Chief Whip 2002-09, Chair of Health Scrutiny 2010-2014. Dad. Unite and GMB union member. All views expressed in a personal capacity. The rest will become evident from reading the blog.
21 Comments:
I couldn't agree with you more.
6:14 pm, September 02, 2008
It certainly should be the sort of dividing line we expose in the next general election.
If we can maintain the clear point that Tories exist to help the wealthy, and we exist to help everyone else, we should keep winning elections.
6:26 pm, September 02, 2008
No luke it doesn't at all. What it shows is that Labour are reducing stamp duty at a time when they should be sending a clear signal not to jump property market unless you can afford to.
What you are doing is trapping the poorest into buying when the market is in for at least 5 years of negative growth.
Personally I don't agree with stamp duty at all as you are paying tax on money you have already paid tax on. But to encourage the poorest onto the property ladder just to try and keep the property market going a little longer is doomed and irresponsible.
For too long the experts have been warning brown of the dangers of letting property prices get out of hand and now reality hits. It's not the time to be making it easier to buy.
If you want to reform the tax system the increase income tax and abolish VAT and stealth taxes such as stamp duty, inheritance and all the others. Raise the amount you can earn before paying tax.....£10,000.
As for the governments idea of getting housing associations to help people in trouble is also flawed. Housing associations are in deep financial trouble at the moment. Don't be shocked if you see a few big ones go the same way as the NR by the end of the year. They don't have the money to invest or help people in trouble.
What I would like to see from both parties is to see open costing for all these measures. The figures don't add up.
6:50 pm, September 02, 2008
If Labour really wanted to reassure worried people then surely it would have been better to reverse the last conservative governments welfare reforms.
Such as paying the mortgage of people who lose their jobs as a result of redundancy. That alone would probably make me vote Labour again because it aligns the party to working people again.
The last thing you want if you lose your job is bailiffs taking your home.
6:55 pm, September 02, 2008
It is a super policy idea, that hepls middle and working class people in tough times.
Obama had a great line. Mccain thinks middle class families earn 5 million dollars a year. How about cmaeron thinks that millionaires are middle class.
rich the whole point is just cutting stmap duty for year should hurry people back into the property market as they will want to get a house before the stmap duty is put back on. It seems a good idea.
9:48 pm, September 02, 2008
Luke
Please remember that it was a Labour Chancellor who abolished the 10p tax band and then gave the middle class an extra tax cut to say sorry for it. This is not the act of a party who believes in really caring for those at the bottom of the income scale.
The impression that Labour gives is that it wants to support the middle classes. They pay lip service to the poor but don't actually follow through with policies that really help.
Under Labour the gap between the richest and poorest in society has widened.
What is fair about retrospective tax changes which penalises those who can't afford to change their cars? Yet, that is Labour policy and it is those at the bottom who suffer most.
Labour pays lip service to caring for the poor and then fleeces them through the tax system.
Nice.
9:52 pm, September 02, 2008
In terms of Stamp Duty - what has changed since the last SD holiday? Back in the early 90s, Labour opposed the policy for exactly the right reasons. It does not work.
By leaking the policy in advance, the government managed to stifle the housing market.
The money for shared equity schemes will help very very few people (less than 10,000 households) and is, in fact, a subsidy for building firms rather than any real help for the potential homeowner.
Also - even the spin doctors in Downing Street couldn't explain how all of this is to be paid for. That is certainly not prudent.
Please look at what economic experts are saying about these hastily conceived policies. There is very little belief in what has been outlined today.
9:57 pm, September 02, 2008
Simon it was labour party that brought in the 10 p tax rate and replaced it with tax credits.
Plus the tory leader has never said he would reintroduce the 1p p tax rate so it is dishonest for tories to claim they can use this as a policy to beat labour with.
10:17 pm, September 02, 2008
Simon, you are spot on about shared equity schemes. They are a terrible investment for anyone looking to get onto the housing ladder. The only person who benefits is the builders.
If you also look at the quality of these shared builds then you will notice a massive difference between homes made to sell. They are poorly made and very hard to sell.
What the government should be doing is concentrating on helping those in the grips of repossession and letting the housing market stabilize naturally. It really is too late now to try and prop up the housing market, you are delaying the inevitable fact....it is going to crash.
10:21 pm, September 02, 2008
Tax credits are more expensive to administer than the PAYE system - plus a lot of people are put off from applying for them because of the complexity of the form. So people have to spend hours getting money back via a system that costs more to run than letting them keep more of their own income in the first place.
I am not comparing and contrasting between parties - I am simply looking at what the governing party claims to do and what they actually achieve.
The 10p tax band was a step in the right direction - abolishing it without providing proper support was indefensible.
If you wish to defend it here, I should be delighted to read it.
Also - the OECD (probably the most respected international economic commentators) has made it clear that the UK is the only major economy that will enter recession this year.
Can you defend that?
If we really are better placed than anyone else to weather the storm, why are we are the only ones now in recession?
10:41 pm, September 02, 2008
We are not in recession. Actually Germany, and France had negative economic growth we did not. We are not in recesssion. We had 0.0% growth you need negative % to be in recession. You need two consecutive quarters to be in a recession.
The USA only avoided recession because they pumped a fortune into the economy in a lame attempt to stop economic devastation before the election. We do not have a election for two years so do not need fake attempts at keeping the economy going.
The Germans and french have allready entered recession we have not. The USA will fall apart after the election. .
11:14 pm, September 02, 2008
dirty euro
Youv'e obviously missed the news to-day from the OECD that the UK faces a severe recession and we are now bottom of the G7 nations,even worse than Italy,now that brings a whole new meaning to economic mismanagement.
On topic,any money that is subject to inheritance tax has already been taxed several times;taxed on income,taxed on savings and or dividends plus capital gains tax.
Anything left should not be taxed any further.
Labour need to fucus their efforts on cutting their massive waste and abuse of taxpayers money,£ 1.8 billion on tax credits that is overpayed every year and not recovered due to the incompetent way it is administerd,the billions wasted on NHS computer systems that never become operational,e-universities,parliament buildings,the million or so non jobs they created,the billions wasted on the Iraq war and the bloated size of our government and parliament.
That would release billions to meet even Labour's bloated funding needs.
12:40 am, September 03, 2008
Hi Luke,
The recent Tory announcement, although related to property, is not a direct response to the current housing market problems - its more a culmination of what they have been thinking about tax for some time, and partly mimicked by Labour anyway.
The Tory plans should be condemned, but you are not really comparing like with like.
6:25 am, September 03, 2008
I agree with Luke, and it's why the Tories will win. Labour detests aspiration and will penalise success. Want to better yourself at uni - tuition fees. Want a nicer house - stamp duty and absurd rates of council tax. Ah, you didn't save for your old age did you? We'll murder pensions. The fact is that the govt should probably reduce stamp duty and inheritance tax. Both would help boost the economy, but the dividing lines are clear. Labour taxes, penalises and undermines aspiration.
8:19 am, September 03, 2008
"On topic,any money that is subject to inheritance tax has already been taxed several times;taxed on income,taxed on savings and or dividends plus capital gains tax."
It probably hasn't you know. I'd bet 90% of the average inheritance is made up of a primary residence - someone's house. On which they pay no capital gains tax.
Additionally, if they've owned it for 20 years or so, 90% of the value will have come from inflation, not their income.
Regardless, it's someone else who has paid any of that tax. I don't see why getting money from a generous deceased relative should result in less tax than getting money by going out and working for it.
1:14 pm, September 03, 2008
Simon, for your information the UK is the only country to enter a recession. We are in a recession now and we are the only in a recession.
Germany is seeing growth, so is France and now the USA....the UK I'm afraid is in a far worse position. You are forgetting about exports something the UK has little of and Germany has lots of......
Anyone worth their salt in business will tell you we've been in a recession for the last 8 months. The figures are always 6 months behind.
5:54 pm, September 03, 2008
You're a decent cove, Lukey boy, but the story is moving way too fast for you.
It's now Charles Clarke and his piece in the New Statesman.
Brun is a corpse. An absolutely useless excuse for a human being let alone a politician.
Time to take your axe to his ghoulies.
8:49 pm, September 03, 2008
Charles Clarke is a nobody he was fired by Blair as he was not up top job as home secretery no one cares what he says. He is just a old twited failed loser who want to kick his own party in the teeth.
Why did he choose now when we wanted to get kick started again after the recovery pacage.
9:19 pm, September 03, 2008
Rich - from Labour Matters.
..."Now the government has strengthened the safety net again; up to a point. The waiting period for receiving ISMI (after losing your job) will shorten from 39 weeks to 13 weeks and the capital limit for claims will be raised from £100,000 to £175,000"..
12:06 pm, September 06, 2008
It doesn't take much to be a millionare these days - most reasonably sized houses in London cost in excess of £1m but it doesn't mean that these people are stinking rich.
If you had a £1m 4 bedroomed house in London how would you feel if the government took £400K of that and downsized you into a 3 bed semi?
3:13 pm, September 08, 2008
House prices are false and must come down 75% at least, if this happened then they were held down and regulated, it would do a lot of good for the economy and society
5:42 pm, September 08, 2008
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