Who pays?

We pay, of course, for the government's latest grandstanding largesse.

The bear of little brain in Dowing Street doesn't seem to realise that he has been found out; everytime he stands up and waves his magic wand we know it's with OUR money paid for in more and more taxes.

The conceit of the man is breathtaking. The incompetence of his government is breaking all records. The urgent desire to now blame the press and the BBC for all the government's ills is catastrophically funny.

It's like being in a comic opera; except it's our country that is being treated like a doormat. But it gets more like Titipu by the day, what will the Lord High Executioner demand next?

By the way - are the housing market measures contingent on hard working families eating up all their left overs?

I love the line being peddled that hundreds of millions were put aside in the last budget. We are supposed to respond by saying how wonderful Gordon and Alistair are having put money aside in the good times!! A rewrite of history.

Surely we ought to seriously think about bringing back Mortgage Interest Relief. If we are to accept some sort of subsidy then why not bring back a system which enabled most of the older generation to get on to the property ladder.

Furthermore, if you look at the figures many of the older generation are now entering the time when they will die. Now if they have a property then it may be that many younger people will inherit either the property itself or the sale proceeds.

We are storing up so many problems which will actually impact next year. Consider a new American President. He/she will want the American economy to come good in 2012, when the next election is due.

Therefore, they will not want to reflate immediately, they will want things to get worse for a while so that they can blame Bush, and then get it better for 2012.

If Gordon Brown is hoping that the American economy will save him then I am afraid his strategy will be wrong. The situation is very bad, worse then anybody realises. If only the politicians and commentators would come into the real world they would soon have their worst nightmares confirmed.

So, Nick, I hope that you had a very nice holiday because what people have to realise is that we are paying for you to give us your comments through our taxes, ok licence fee to the BBC.

Team GB has lost the plot, we are up the Zambeze river without a paddle.

These sorts of schemes will be win-win for New Labour. If they don't manage to bribe enough clueless voters then the Conservatives will have to sort out the fallout and if the bribes do work then New Labour get another 5 years at the trough.

If I remember correctly, the sub-prime mortgage crisis was caused by poor people borrowing more than they could repay.

So the fix is to make it easier for poor people to get "low cost" mortgages....

Yeah, right.

do you mean £600,000?

As my name suggests, I am a retired person. I live comfortably, have no depts, no mortgage and live well within my means. How have I achieved this happy state, by paying off my mortgage early and not remortgaging to fund an excessively lavish lifestyle, by being prudent and saving for my retirement, by not changing my car and other lifestyle requirements for the latest model every year, in other words by being a responsible person.

How am I rewarded? By being required through taxation to fund other people's folly and irresponsibility.

This government has lost the plot and should go before it does more harm.

I do not agrea with the principle of taxing homes through stamp duty but if it stops people from taking on a mortgage that they cannot afford then at least it does some good in this respect. We all need to accept that the housing market is grossly over priced and that the bubble needs to burst. The sooner prices come down to realistic levels the sooner young people will be able to buy without state help.

One final thought. How many more mini budgets will it take and how many billions of our money spent before we get rid of this incompetent government and Prime Minister?

Dear god. Brown just can't stop spending our money can he?

Frankly, I'm baffled. A short while ago everyone was complaining that house prices were going up too quickly and people weren't able to afford them. Furthermore, house price inflation fuelled people's appetite for borrowing and that, coupled with the banking sectors greed, got us into the mess we are in today.

House prices have a very long way to go before we get back to where we were even five years ago. The measures the chancellor has announced today are likely only to keep prices at present levels if not push them up again.

It doesn't exactly fair that the government should use public (i.e. our) money to support a minority of people who wish to buy now. They might anyway be better off renting for a few years whilst house prices fall further - which they probably would and should if the government left it to market forces.

When the global situation improves, as it surely will (although here I agree with Darling that it may be some considerable while), prices will once again move up and that will be the time to buy.

Do you really have to ask?
The future's being mortgaged so that Brown can stay as Prime Minister for a few more months.

The 'right long term decisions for the country'? Don't make me laugh.

Providing state subsidies for new house buyers and help if you run into trouble in todays house market is akin to providng susidies to enable investors to continue investing in 1929.
This will all have to be paid for by us and our children long after Mr. Brown and his failed government are history

The right long term decision for our country is to hold an election. This diabolical government has gone on too long.

This comment was removed because the moderators found it broke the house rules. Explain.

I may be dim, but I dont understand.

Just a month or so ago, we were told that banks were going to insist on more equity when lending money. This was described by the Government as a return to prudent lending.

Yet a month later the Government is going to give people interest free loans to cover their deposits. This presumably means that if borrowers default, then the banks will get their cut first, and the taxpayer will end up with nothing.

Am I being stupid, or is this actually what Mr Brown is proposing ?

"Now this package is costing £600,000 upfront"

I think you mean £600 million. Otherwise the answer to the question "who pays" might be David Cameron - by selling his Notting Hill pad.

Nick, surely it is your job to ask these questions to Brown, and demand answers, not just to get fobbed off by what ever soundbite Our Beloved Leader is currently mouthing.

Mr Brown, you do not have the money to do this, stop spending on the never never, bite the bullet and sort out the main issues which is high taxation, high fuel bills and the knock on effect that this is causing.

People are having dificulties with their mortgages because their fuel and food bills have doubled.

Drop fuel duty by 10p and watch the money lost in Fuel Excise duty be made up by the increase of VAT in the economy as a whole.

raising the Stamp duty limit is a good idea but you could save more money to pay for it by dropping ID cards, that would help in your popularity stakes as well.

Why does this government always tinker with the economy and not make bold strategic decisions. This measure to help first time buyers is tinkering in the extreme.

As an analogy I was struck by another BBC article today about the drought in the Murray Darling basin. There they have a water drought with everything wilting due to lack of water. The only solution is rain. Digging boreholes for the lucky few doesn’t help the majority affected.

This measure by the current government is the same. The problem is a money drought. Businesses and activity are wilting because of a lack money. This measure will not help one jot. Measures to ensure the credit crunch does not paralyze the wider economy will. Otherwise, Alistair Darling’s observation on “this is the worst economic crisis in 60 years” may become a self fulfilling prophecy.

If you want to see what is going wrong then look at what has happened with the appalling PFI schemes where the taxpayer has been conned twice, once by the government and once by the the construction companies.

Here in Exeter five high schools were built under PFI. Now Exeter wants to be a Unitary Authority and yet does not understand that these schools were built under the control of Devon County Council. Why should a person in Barnstaple, North Devon, pay for schools in Exeter when Exeter wants, no demands, that it be separate from Devon.

As for change requests to the actual design and equipment within the schools then just see how much is being charged where something needs to be done, a new plug, opening windows, hwere the classes were too hot the windows could not be opened to let fresh air in.

The cost of the buildings, about £98 million. The cost of the project over 25 years will be over £315 million, and the buildings will be 'given' to the council in pristine condition after the 25 years of the project. I regard this as very poor value, and this is happening all over the country.

Yet people wonder why the economy is in a mess. There is not the revenue to pay for all the PFI projects, so money has to be borrowed. Is that not the problem, capital projects have been turned into revenue projects, only there is no revenue!

I believe that this will cause outrage amongst many people, but I earnestly believe that we, the taxpayers, should not have to bail out either banks nor mortgage house owners.
Houses are first and foremost homes, and if ordinary people wish to play high finance dealers and purchase property for investment purposes, then let them take the losses as well as the profits.
The best thing that could happen is if the bloated, artificially high price of property slumped to its true value. In simple terms, a property going for £150,000 today probably has a true market value of £15,000. This would create a situation where people would not sell just to profit and first time buyers would have a more reasonable chance to buy without mortgaging their souls. Houses would continue to be put on the market when people needed to move, and once they saw the market was not going to rise, they would accept the new lower prices. There would be no alternative. In the end, the only losers would be the estate agents having much smaller commissions, and the banks who wouldn't receive such exhorbitant interest payments. This is an obvious solution, but knowing human greed and the grasping companies involved at all levels of home purchase, it would be tough to adopt. This is one scenario where active, government interference could be beneficial. But NOT this government, obviously!

Clear to me that 2 others who will pay soon are the Chancellor and the Housing Minister both of whom are nowhere to be seen on this issue. Nick, have we entered the final stages of a conversion to a presidential form of government with Downing St doing all the decision making?

What a surprise. Tax rebate, Interest Free Loans, Tax Credits... and whihc of these do I qualify for none.

Fine if I lived in the north but I live int eh south am struggling as m,uch as anyone else.

But Labour couldn't give a toss about me, just see me and people like me as a cash cow to squeeze.

MOre importantly, houses are over priced. Mine certainly is. Government needs to leave them to get back to 3.5 average earnings.

this is what Typical BBC "bring down the labour government" comments look like.

'Why doesn't the Labour government do something to help first time buyers? They never listen...'

They do something

'How much is this going to cost us hard working decent law abiding tax payer(Conservative voters) to pay for this.'

Just watched a repeat of 'Have I got news for you' on dave on freeview featuring Nick Robinson as a guest. Who treated the audience to a tory biased rant along the lines of 'Charging the motorist, charging for us to emty our bins...' this was before last September. You had no need to worry during your holiday all you little fans kept us on our toes and kept up the supply of newspaper clippings and adverts and comparing the size of Dave and Gordons polls.

So the Conservative party still has the BBC in its pocket. Maybe Cameron can spin it all better with his PR skills who knows?

When will Brown and his fellow fools realise that you can't SPEND your way out of economic hard times, you have to WORK your way out of them? All these measures will do is inject more inflation into the economy, which will result in more unemployment.

Clearly Brown is not content with having the worst economic situation in 60 years, but is aiming to have the worst one of all time. Yet another Labour Government will end in a huge financial mess.

When things looked very rosy not all that long ago, Brown was attributing it to the free market economy and his fiscal prudence. He seemed oblivious to the mountain of debt that was piling up.

Now the free market is handing us the other side of the coin and Brown is trying to play King Canute with these measures. His self-proclaimed record of fiscal prudence is in tatters and even the most blinkered can see him exposed as the clueless charlatan he really is.

These policies will only serve to exacerbate the situation at the taxpayers' expense and delay any real economic recovery as yet more debt has to be worked out of the system.

Gary Elsby wrote "The Tories are stone dead in the water when faced with such dedicated policy to help both the needy and the marketplace."

What a laugh. This is throwing away (badly needed) public money at a scheme which will not work. And there is nothing "socialist" about trying to keep pumped an overinflated housing market.

Buy anyone who hopes it will "preserve" house prices will be in for a shock - buyers will be demanding drops in prices for properties listed between £175,000 to £200,000 to bring them within the marginal rate.

And for the majority of buyers, a saving of £1,500 in stamp duty is nothing compared to the much larger savings they will make simply by holding off until vendors finally face the music and drop their prices.

These measures will just prolong the agony.

First time buyers would presumably like the house prices to fall quickly to a point that they can afford a mortgage.

This vague intervention will instead just slow the rate at which it takes house prices to fall and mean it takes longer for many people to get on the housing ladder.

Other countries are prepared for a down turn - they are taking serious actions and are injecting billions to stimulate the economy or have a budget surplus, so they are able to reduce taxes.

....otherwise it is business as usual for the UK. We are spending a few billion pounds of tax payers money to try and save Gordons job.

At least we can now put the failed experiment of socialism behind us. Big government controlling our lives failed in the 70s and it has failed with "New Labour" - let's hope this party has the good sense to just retire.

" In simple terms, a property going for ?150,000 today probably has a true market value of ?15,000."

Tee Hee.... I think that is a little optimistic.

I recently built a 2 storey extensiona dn teh labour was more thatn 15,000.

Hosue prifces are over valued. But a 500,000 5 bedroom house still costs 200,000 to build. It's never going to go on the market for 50,000 is it ?

It is not the job of Government to regulate the private housing market. Even the High Priestess of Friedmanism, Thatcher, said so.

If individuals are struggling with their mortgages then the Banks will have to take the hit - clearly a loan was advanced that was not financially viable in the long run, and the lender should have taken more factors into consideration. Most of this mess has been created by somehow allowing banks to be shielded from the full long term effects of their very short term actions.

What we need is a complete shift of attitude, where people view their properties as long term homes, in which to create stable bases for their lives - just speak to some Dutch people to understand how this works.

By viewing homes as money making assets we have created an unstable, consumerist society, in thrall to debt, greed and self interest, and absolving of personal responsibiliuty for their actions.

Unless Brown is working on a a grand scheme involving an expensive re-nationalisation programme, beginning by taking back a proportion of the housing sector into government ownership, then he is purely trying to buy a few percentage points in the polls.

At least he (as yet) is not looking at starting a war to get those points back.

Isn't part of the problem that the housing market was overinflated in the first place. House price rises were fueled by 100+% mortgages that outstripped the ability of the borrower to repay should the economic climate change.

Now that the lenders are being more cautious, thus preventing people being lured into excessive debt, there has been a correction in the housing market. This is a perfectly natural thing. Why does the government see fit to throw our money into the pot to try and prop up a failed and discredited system?

As a private tenant why won't HMG throw a little cash my way to keep me, and my family, off the streets? Why provide a means for people to invest beyond their means?

Looks to me like Brown is doing the right thing for the wrong reasons. GBP 125,000 has been too low a starting level for a long time.

As for "who pays", well, there are bound to be questions when this type of decision is made for purely political reasons. But I don't recall many Tory-biased commentators asking "who pays" about Osbourne's proposed inheritance tax cut.

safer to buy a caravan :)

I've missed your delusional rantings dhwilkinson!

“2. At 10:21am on 02 Sep 2008, voice_of_sense wrote:
I love the line being peddled that hundreds of millions were put aside in the last budget. We are supposed to respond by saying how wonderful Gordon and Alistair are having put money aside in the good times!! A rewrite of history.”

Of course. Churchill said that history is written by the winners. This piece of history is being written by the ‘Don’t want to be losers.’




“8. At 10:40am on 02 Sep 2008, pdlodge wrote:
Dear god. Brown just can't stop spending our money can he?”

No he can’t. He is a chronic spender. The country has the equivalent of 14 maxed out credit cards, five loans and a third mortgage.

He can’t stop himself, but we can stop him. Unfortunately the evil **** will probably hang on till 2010. By then he will have run up even more debts and it will take the Tories another 18 years to sort this mess out.

In response to dhwilkinson, I don't think that the BBC asking how New Labour are going to pay for this give away is trying to bring down the Labour government.

Most people can see that we are approaching a downturn in the world markets, this is the sort of time that we would expect governments to reign in their saving plans and try to weather the storm.

However, it looks like New Labour are just going to borrow even more money and hope that it can stop the market from crashing.

The only problem is that when/if the market crashes what happens to the loans the government have given? Will they just be written off?

Governments can't wage a magic wand and a big pile of money appears, that money has to come from somewhere - and the BBC are simply asking where the pile of money has come from. Oddly enough it is the role of journalists to ask tricky questions like that of the Government.

If you don't think the BBC should question this dhwilkinson perhaps you would feel more comfortable living in a country where the press is owned by the government? I do feel that at times there is a left-wing bias at the BBC but I admit that the journalist's own political views don't stop them from asking tricky questions of the government.

24. At 11:15am on 02 Sep 2008, heatonfan wrote:

And for the majority of buyers, a saving of ?1,500 in stamp duty is nothing compared to the much larger savings they will make simply by holding off until vendors finally face the music and drop their prices.


The current threshold of SDLT is £125,000. It has now been increased to £175,000, a difference of £50,000. Given the savings at the 1% rate, the maximum amount of money that can be saved is £500 per transaction. This is still less than the cost of the ridiculous, pathetic, unnecessary HIP’s.

Why doesn’t the government have a small outbreak of common sense and scrap HIP’s. They are a meaningless deadweight on the economy.

Since HMG bailed out their banking friends when they got into trouble it is only reasonable that they help to bail out the victims of their banking friends.

Of course, as taxpayers we all pay, but what is the alternative? People put out on the streets, lives ruined and all the disfunctionality of a shattered society? No way.

There are better gods than Mammon and this government will pay the political price for their worship of this idol which they very carefully made in their own image.

This entire episode illustrates the futility of the political class and their pointless egoism.

This is staggering.

The government is committed to "affordable housing" after years of double digit rises.

So the govt states it wants "affordable housing" but is now committed to spending billions of pound to try to ensure that housing doesn't get more affordable - that prices are propped up way above levels that people can safely afford.

The problems in the housing market stem from prices being too high, and people therefore borrowing too much money to buy them (pushing up prices further). Only Darling and Brown could come up with a solution that involves:

1) trying to keep house prices absurdly high
2) adding to already alarming govt borrowing to fund their bail out
3) giving loans to first time buyers to encourage them to get massively in debt buying houses that we all know are horrifically overvalued.

This isn't a bailout for first time buyers. Its a bailout for banks and builders. Its a bailout for big business who raked it in during the boom, and now face the inevitable bust.

Whatever next? Spending OUR MONEY to keep oil prices high?

Well done, the asking price of all houses less than 200,000 has now been reduced to 175,000.

Isn't the greatest stamp duty problem that it introduces artificial steps in the market?

Pay nothing for a 175,000 property, 1,750 for one costing 175,000.01, 2,500 for a 250,000 property but 7500 for one costing 250,000.01

If you are going to retain the tax at least rationalise it to remove the abrupt jumps.

These announcments are pathetic and show that there is a real sense of desperation at the heart of goverment.

One thing that the government should have considered is allowing individuals to hold residential property in their SIPPs. This would lead to longer term stability as individuals would be investing in property for the long term rather than speculatively. It would also help prvent a sell off as we are seeing now, helping to reduce the fall in asset prices. It is odd that it is about one of the only asset classes that is not allowed to be held in a SIPPs.

The £175,000 level is far too low. Who is this going to help in London and the South East? Is Gordon Brown forgetting that he is dependent on those living in the South East and London in order to win the next election?

This is a government bancrupt of good ideas, struggling to govern the country it has bancrupted.

I am reminded of the excellent film "Toy Story" with Gordon Brown as Buzz Lightyear.

He refuses to accept reality and believes he (the UK economy) really can fly and he can solve all of our problems.

Gordon might refer to it as "falling with style" but it is really a crash. This is just another feeble attempt at robbing Peter to pay Paul where the sensible, careful and prudent, now there's a word we don't hear anymore about Gordon Brown, are expected to subsidise and bail out the feckless, deluded or mere financial idiots.

I'm not the only one who thinks this way from reading earlier posts.

Go Gordon and go now!

Why should we use taxpayers money to keep house prices at an artificially high level? Let house prices fall to a level where they are affordable for first time buyers on average incomes. Some people who bought their houses in the last few years are going to lose out (myself included) but in the long term it has to be a more sensible approach for the economy.

Don't let Gordon let house prices spiral out of control again - he's only interested in raking in stamp duty.

27 Ukasdaafan

Ok, get your point. Got carried away with my posting. But, when one considers horrible little unimproved flats, in tumbledown areas going for hundreds of thousands, my figure of £15,000 is realistic. Also, building costs like car garages are charged at whatever the punters will pay, so these too are likely to drop. Jerry built new properties are the biggest cause of this whole problem, being bought mainly by young, inexperienced people, who glad to have a home to call their own, enter into expensive, insecure mortgage arrangements.

The Tories are stone dead in the water when faced with such dedicated policy to help both the needy and the marketplace.

This comment is pure tribalism, and sadly on par with "CMRN SUX LOL!!!!!!!111".

I'm nearly 23, graduated with First Class Honours Law Degree from a leading university and unlike many students have no outstanding debts (I actually managed to work and balance my studies) yet how is this latest Government policy going to help me?

Many students and young people can afford to rent accommodation in parts of the country let alone buy it.

Smacks of an electoral bribe and its yet another copy of a Conservative Policy (this time from the early 1990s) which did little to improve things and cost the exchequer millions.

Neither party can offer a solution to the current problems but why doesn't the Government admit it's in a hole and stop digging for a change?

43
Just watching SKY News, I was alarmed to see the state of Gordon Brown. I am not one of his supporters, but seeing him next to the smirking Darling, as property was discussed, I felt pity. The man looks stunned, and disorientated. If he was my dog, I'd regretfully know the solution.

I remain as baffled as many that the focus of the media remains firmly on a government whose only, and most damning failure was its inability to regulate a sector that claimed to be capable of regulating itself. This nonsense is quite frankly a consequence of a cabal of incompetent self-seekers lending money they didn't have to people who couldn't afford to pay it back, all secured by assets that were transparently over-valued. Suddenly this becomes the fault of Government and we, the innocents, are expected to bail everybody out. When we, the innocents, were pointing out that the housing market wasn't sustainable.
We appreciate that the BBC correspondents can't blame the institutions, who provide their meal tickets, but they could drop a hint or two.
Let market forces prevail. Launch a Closing Down Sale and let that be a lesson to those who trusted money lenders.

Nick, please forgive my perhaps ignorant view of economics, but I can't see how scrapping stamp duty will help people afford a house, let me try and explain

Something is only worth what someone is willing to pay for it, so it's value is basically whatever the highest bidder wants to pay

Therefore, if I have, for example, 150 grand to buy a house with, I'll pay 150 grand for a house that I feel is worth the money

If I have to pay stamp duty (eg 1% or 1.5 grand) then really I actually pay 148.5 grand for the house and 1.5 grand stamp duty to Her Majestys Government

If however stamp duty has been scrapped on that purchase, I still see the house as worth paying 150 grand for, and the owner will still charge me 150 grand. Therefore I don't save a penny through this scheme. The only person who wins is the original owner of the house who gets a little more cash out of the sale.

Am I missing out on something?

43 power_to_the_ppl

Great to see your words of wisdom once again. I missed you, pal.

In response to Antichthon's comment:
"As for "who pays", well, there are bound to be questions when this type of decision is made for purely political reasons. But I don't recall many Tory-biased commentators asking "who pays" about Osbourne's proposed inheritance tax cut."

I thought that Osbourne actually laid out that the inheritance tax cut would be paid by increased taxes on non-doms?

And I also remember commentators saying that he may have over-estimated the amount of money his taxes on non-doms would raise.

Of course I may be remembering incorrectly - I haven't had the chance to go back and check.

Changing stamp duty hardly changes anything - it's only 1% of the cost, after all, and since prices still have double digits to fall if they're to regain any sort of parity with fair value historically (let alone fair value for a recession!), I can't see anyone will now rush to buy a depreciating asset because a portion of it is now 1% cheaper.

The other horrible irony of it all is that the Government continues to defer the cost of this to another generation by spending now and paying later, when the original cause of the country's financial problems was credit made too freely available without concern for the consequences. The solution to a problem of excess liquidity is surely to remove liquidity, not to add it in some vain hope of preserving the house of cards. Prices are falling because they're not appropriate for the market - even if you spend money to artificially prop them up, the problem doesn't go away. Then you have to either keep propping them up or let them fall at some point in the future. The pain has to be felt at some point, so might as well have it now and get it over with rather than throwing money at it and hoping it will go away...

The money would have been far better spent on reducing fuel duty, then everyone would have benefited. Not just people buying houses.

The question is: do these changes distort the market? If they do not then they are a waste of money. If they do they are insane.

Reducing stamp duty will tend to boost house prices (for one year) which is exactly the wrong thing to do and will prolong the downturn (again in a year's time). It will induce people who cannot afford the payments to take on mortgages. If house prices stop going down (unlikely) first time buyers will be hardest hit so in the end reducing stamp duty will help nobody neither the house buyer nor the Treasury.

Interest rates need to go up and stay up. Savings ratios are far too low and can only be increased by higher interest rates. This is the only way to make homes more affordable, by ensuring prices fall to sensible levels (another 20 to 30 percent drop at least)

These equity sharing schemes may be less expensive to society than repossession but they will not make houses easier to buy as the mortgage providers will only still lend on 70- 80 per cent of the net value and the deposit will have to be found. (Who will have the first charge is not yet clear, is it?)

All in all window dressing and being seen to be doing something but with the added real risk of continuing to destroy the value of savings which in the end will make things worse.

I hate Gordon Brown. Strong word, hate, and I don't use it flipantly.

Basically he will help those who are dumb enough to borrow way beyond their means, then when it inevetably goes wrong, I have to bail them out.

Thanks Gordon.....pillock!

I cannot understand what all the fuss is about. Years ago, we eleceted a socialist government (who hoodwinked us into believing that they had changed into the middle of the road party or even to the right).

There is a saying - a leopard can never change his spots. We can now add to that - once a socialist always a socialist.

Socilaists have been known to spend what comes easy to them by way of taxation. They have no idea as how to increase the earning power of the nation as a whole.

Come on guys let us be fair - if there is any one to be blamed for the mess, it is us. Not Gordon or Alaister or Jack. They are doing what their predecessors always did - spend, spend, spend....

May God help them by increasing their spending power!

Manji Kara

All those warnings over the last 10 years are unfolding in front of our eyes.

Labour increased the tax burden budget after budget at a time when the world economy was in a massive boom phase and people were taking on unprecedented amounts of debt.

They were told time and time again to slow the rate of public expenditure and reduce the tax burden (to below one of the highest levels in history) or else we would be in severe difficulty when the inevitable downturn came.

So now here we are at the start of a downturn, on the brink of recession and all that the government can do is spend billions and billions which we don't have and which we'll be paying for in the years to come. Now doubt under the next Conservative government, when we're all struggling to pay for Labour's recklessness, we'll be told by Milliband, Balls et al. that it's Conservative economic mismanagement.

And so the political cycle will start again.........

re: 45 phoenix

His sins have found him out.

We must be strong until 2010. Nevermore will Labour swig champagne at our expense. The 'party' is over.

At times when the economy is suffering and unemployment is rising, would it be a good idea to raid the RDA budgets? After all one of their key objectives is to create and sustain local employment.

My exerience of working with them, as a business owner, is that they are make a worthwhile contribution to the local economy.

Rather than some artificial kick start to the housing market, surely it would be better to strengthen and support the RDAs to keep as many people in employment as possible. After all unemployment is one of the biggest direct causes of mortgage arrears.

Encouraging young people to buy into a falling market is simply wrong. Housebuilders will be the gainers as they flog-off unwanted stock and the losers will be the chumps that buy them. Prices bubbled up and they must now fall. By all expert accounts the fall will be 25-30% in nominal terms from the peak prices achieved in 2007. There are many web sites where the comparable peak 2007 prices for neighbouring properties can be found. So far prices have fallen 10%. Buying now to save 1% stamp duty is plain daft.

Ta Phoenix, I've missed you too! We must once again spread the word to help turn Nu-Labour into No-Labour!

With regards to the income tax blunder for lower rate tax payers it is all mathematics. Labour have once again conned us - yes strong words, but Labour are a completely useless bunch of idiots! Way back when they annouced the introduction of the so called benefit tax system (scrapping of 10% levy) I immediately devised a formula showing that anyone earning under £18500pa would be worse off, I even showed it to friends and colleagues who thought I was wrong. Didn't take long to show I wasn't though - not one of the financial gurus picked up on this, why? Is this not what you/they are paid to do?
Once again, we have concerns that Labour have dug deep into their pockets and found billions to offer a rebate. COME ON - THINK. Do you really believe that the Labour Party are a party for the people, a party that gives, a party that we can trust????
I certainly don't! What have they done, where has the money come from?
40% tax payers that's where. Reduction is the band for where 40% tax is applicable. Do the sums - Labour have actually made themselves money.
Once this Labour party are voted out I think we will see better results for the country.
We have a failing NHS, Education, Law and Order and MOD. Each one of these Labour made their 'baby', the thing that they would make better - and yes everyone of them is worse. What happens, Labour blame the previous government.
Perhaps we should all remind ourselves of the decision the Labour Party took when it came to power - it sold 50% of the UK gold reserves to finance their pay rise - and if that wasn't bad enough, they sold it for half price $200/oz - not many weeks ago gold was in excess of $1000/oz. Even today it is greater than $800/oz.
Perhaps if Labour were not so greedy we would have cash in the pot for times like today!

32 powertothepeople
"I've missed your delusional rantings dhwilkinson!"

I haven't missed your pathetic attempts at baiting. I'm fairly sure Gary Elsby a victim of your biting wit on comment 43 will feel the same way.

The government has stepped in to help people in a difficult situation. Possibly losing there homes. I here some people Estate agents mostly wanting the stamp duty holiday to be extended to properties quarter of a million pounds.

I'm fairly sure you and your crowd would be complaining now if the Government didn't help people who were losing their homes. and didn't help first time buyers.

You are the dillusional one if you think that David Cameron and his chums would make any real difference to the economy. Its the Ideas of Thatcherism personal greed, society doesn't exist, you must own property and drive a big car. that has led to this mess. That was brought on by labours failure in the 1970s and 1980s but that wont help you now.

Hey Phoenixarisen I think you may need to visit a builders merchant. you couldn't buy the materials to build a flat for 15,000. Let alone the labour.
To self build a garage you will require at least 4500 bricks for a decent sized garage, cost about 1200 quid, Concrete for foundations say 20 square metres will cost you about at least 700, plus fo course the sand and cement for laying the bricks, flat roof at least another 500. Garage door, electrics, Switchs, lights, Making good and clearing rubble. You are looking at 5,000 before labour. And that is a single skinned wall for 20 square metres. There is no way you can build a flat for 15,000. Forget it.

Calming the waters and reassuring people is never easy, and in spite of Nick's best missteps and the howling mob, I'm sure, the Chancellor's policy will be effective. I really don't want to bore on about economic fundamentals again but this is a generally masterful move by the government even if some folks don't fully understand or appreciate it. It's an appropriate and proportionate use of power for both immediate benefit to Britain and fits quite neatly with the long-haul plan. I expect, the government will be feeling rather pleased with themselves, and deservedly so.

Hey Phoenixarisen I think you may need to visit a builders merchant. you couldn't buy the materials to build a flat for 15,000. Let alone the labour.
To self build a garage you will require at least 4500 bricks for a decent sized garage, cost about 1200 quid, Concrete for foundations say 20 square metres will cost you about at least 700, plus fo course the sand and cement for laying the bricks, flat roof at least another 500. Garage door, electrics, Switchs, lights, Making good and clearing rubble. You are looking at 5,000 before labour or VAT easy. And that is a single skinned wall for 15 square metres. There is no way you can build a flat for 15,000. Forget it.

Whilst I sympathise with those under financial pressure, I find it hard to swallow that the government will be using tax money to bail people out who quite simply got greedy when prices were going up.

As someone who has been saving diligently for 3 years to purchase a property, I wish I'd been reckless and purchased something that I couldn't afford with a mortgage that I could never pay back... at least that way I would be on the ladder.....

Come on guys let us be fair - if there is any one to be blamed for the mess, it is us.

How comes ? Never voted for them, campaigned against them and told everyone that this is what would happen.

Not my fault...Might be your fault... but ot mine.

All homes for sale at £200,000 have instantly been dropped in price to £174,999, and people selling '2nd hand' houses suitable for first time buyers now have to drop the price by the equivalent of 5 years mortgage interest payments to compete with HomeBuy Direct.

They haven't really thought this one through properly, have they?

I'm trying to find the small print on these interest-free loans here, but neither the Politics nor Business sections have anything in-depth.

I suspect the problem with these loans will be the same as the subprime borrowers had with the banks - paying it back. Only instead of the bankers taking the homes, it'll be the government.

Sort of the reverse of Thatchers house-buying scheme.

The stamp duty change makes some sense, albeit late in the day, but given the state of the economy and stirling bungee-jumping, the housing issue isn't the primary problem is it?

Given our imports from China and the US, plus fuel is charged in dollars, economic growth and the shoring up of stirling should the primary focus, as those two things would improve the housing situation anyway.

Brown, like a bad marksman, keeps missing the target.

I notice that my 'comment' @ 13 has been referred to the moderator.

A Tory trick to censure a responsible comment from readers.

There is nothing wrong with that comment and it does not break the rules.

It does, however, completely wreck the whole Conservative strategy of disinformation of the Labour's economic policy.

Put it back up for the whole world to see and for the whole world to see Tories crying onto their blank sheets of paper entitled:

'Policies'

Gary

Why do the interviewers let such people lie and not challenge them?

'All the world is suffering from the credit crunch'. No it is not. I am fairly sure Saudi Arabia has no concern at all over borrowing money. Bound to be plenty more. Obvious lie.

'The stamp duty holiday will help home owners'. No it will not, it will at best help those moving house or buying. NOT home owners in general. Obvious lie.

Unfortunately the BBC has some in house policy of wanting higher house prices unlike the rest of the nation. So they never attack these fools of politicians on the stupid concept of taking a little tax off in order to encourage the prices higher!!

What the country Needs is a halving of house prices and Higher interest rates. NOT 'getting the housing market going again'! For goodness sake, aghhhhhh! Encouragement to save not borrow their way to things. Then these turmoils would not be much of any concern to anyone.

Still 'help' first time buyers to pay today's prices when they should be another 10% lower priced a year later, thanks for nothing. A con on the victims.

Fancyanswer - and what about the money from North sea Oil that the previous administration wasted?
And the cheap sell off of National assets to line the pockets of the City?

They all dort it - it's the model that needs to change, not just the government.

Phoenixarisen

I fear you have an approach to economics rather like this Government.

A "market value" is just that. Three factors influence it.
1 The cost of producing a product (houses in this case).
2 The level of demand for the product.
3 The ability to access money to buy the product.

The cost of land is "purely" purchase driven (2 and 3 above) - even this government can't claim it will produce any more!

But the government sat on huge acreage, quite a lot of which, if it sincerely believed there is a need to get more homes available, it could have retained and then contracted building companies to construct units. That could have taken some 25 percent out of the "normal" sale cost out of the equation. Income from leasehold fees would have provided some return.

Demand has been rising for years. Can't stop that.

The Government could - and should - have stuck the boot into financial organisations who ratcheted up the income-to-borrowing ratios. Was a time when it was hard to get 4 times income the for a married couple. And at least a 10% deposit was required.

If Brown had wanted to, he could have stopped the stupid multiples, which simply allowed cash to flow into my 3rd element. If the then Chancellor had stamped down on the rediculous cash availability, prices would not have shot up... There just wouldn't have been the money available to support the dramatic rises.

So now Brown wants to offer "Free for 5 years" loans. He has no money. So where does it magically appear from?

I dislike taxes in principle (but absolutely accept the need for some functions to be run via "public funds ". This mob assumes that everything from birth to death is simply a taxable event!).

If Brown were really radical, he'd have scrapped stamp duty altogether - that's simply an obstacle to transactions - and introduced a low level of capital gains tax on the resale of houses. (Please don't get me wrong. I wouldn't like that either. But it could be a little less drastic than hammering people who want - or need - to move up the chain.)

The way stamp duty is applied is crass. If you used the same approach to personal income tax, there'd be no initial allowances or tranches, just an "everything at one rate". You wouldn't want that, would you?

(By the way. Brown set up Darling for a problem with his rediculous posturing over the 10p tax break. If he didn't want everybody to obtain that initial low rate, it should have been possible to introduce an "IF" clause into personal tax calculations.
So, IF total income is less than GBP X,000, apply 10p tax rate. If total income exceeds X,000, go straight to next tax band.
Surely it couldn't have been that hard to introduce. And would have protected the lower income folks, without all the jiggery- pokery, special payments, claims for credits that have to be paid via expensive and apparently incompetent HMRC offices.
Not a difficult exercise to include into IT programs - and not that hard for small businesses to work out.
But Brown and his mob dislike simple solutions. That goes against the notion that we are simply units in a state economy, who should be grateful for State intervention - using our money.
The man's quite possibly got a heart of gold. But a head as Red and centralist as anything I can remember.
He should have stuck to an academic life.)

Why is Nick Robinson suddenly so concerned about where this 'government' will find the money for this latest pork barrel enterprise? He was never concerned over the last 11 years when taxes were raised and money borrowed and wasted on a vast scale. He was always more concerned on trying to stick it to the Tories about unfunded tax cuts.

It's bleedin' obvious that NuLabor have wasted 100's of billions - what's a few more?

Peter Grimes

Just as I thought. Typically Gordon Brown headlines but look underneath and what you see is a viper's nest.
Encouraging niaive people to buy into a falling housing market
Building up hopes for those already struggling with their mortgage.
Try getting your mortgage interest paid.
It's a minefield and you have to be penniless and jobless.
If you do get it there will never again be any incentive to take a poorer paid job. You won't be able to afford to.
Married with children. More marriage breakdowns as partners leave their families who can get mortgage interest paid and all the benefits if there is only one non working parent.
I could go on and on
I only hope you the media will see through this and expose it for what it really is.
A blatant attempt to con the most vulerable people into thinking they will be alright with this totally discredited government.

Who pays? Well, guess what, it's us poor old taxpayers. We all pay for a series of measures designed to distort the housing market and keep prices artificially high so that first time buyers still struggle to get on the market. So I guess first time buyers are going to pay twice over.

#47 michael24easilybored

I believe that Stamp Duty is added to the final price, rather than being part of the payment to the seller.

ie. you agree to buy a house for 150,000, you pay the seller 150,000 and the government wants 1,500 on top = total payment of 151,500.

Therefore the seller doesn't gain anything by removing the tax, the buyer just doesn't have to pay the extra tax on top.

If I'm wrong I'm sure someone else will put me right ;o)

GB says and we pays!

All MP's form whatever party are and always will be out for themselves and the companies they work for.

To top it all off they get paid wages, (a big bonus from the public), for there non existent work as so called politicians supposedly working on behalf of the public!

Tom Fullery

I've never understood why it is that political commentators absolutely roll over and kow-tow to lies. Darling has lied today and before but no one has ever nailed him, they've just let him get away with it.

Why?

Quick history lesson. MIRAS. Why did that cause a bubble of house price inflation??????????????? because it lowered the cost of borrowing.

Darling must have skipped class that week.

The thing first time buyers need is generally lower prices (ie a house price crash!) not propping them up with dubious schemes that would appear to do more to bail out newbuild developers than anything else, effectively meaning they can charge more to first time buyers as the cost of borrowing is cheaper.

Great plan Darling. Im sure you will get a nice directorship from Barratt and Wimpey when Gordon fires you.

fairlyopenmind

What would be wrong with a single flat personal income tax rate and a single threshold above which tax is paid? No really, its a genuine question.

I can see many many benefits coming from it. It would be simple to understand, simple to administer, and above all, cheap to implement.

dhwilkinson wrote
"So the Conservative party still has the BBC in its pocket. Maybe Cameron can spin it all better with his PR skills who knows?"

Shocking...11 years of Blair/Brown Broadcasting via the BBC and Blair/Brown SPIN...now all of a sudden labour is failing everywhere as 11 years of policies/mismanagement comeback to haunt them and its the conservatives or BBC's fault!

I can hear those straws being clutched...

#63

It's the very fact that the government constantly feels so pleased with itself that is causing its marked lack of popularity.

It may be a Scottish thing to look smug and self satisfied all the time but it's not an English thing.

The current prime monsiter has clearly learned nothing form the Darien Company that bankrupted Scotland an caused the act of union or John Law the Scottish financier who bankrupted France. Guess how he did that? The over supply of cheap credit to buy worthless assets in the Mississippi company.

What, pray does Zen Buddhism have to offer on this unique coincidence of profligate Scottish 'financiers'?

If the government really are sitting back feeling pretty pleased with themselves then they will just do themselves even more damage. It's about time they adopted the Alistair Darling approach and all admitted what a total stuff up they've made of the past eleven years.

Where are the power stations? Where are the motorways? Where are the high speed rail links? Where is the transport infrastructure that keeps a modern economy moving and competitive? They haven't proposed a thing; everything they've done was already proposed by the tories. Eleven years and their best shot at a Nuclear policy is a botched deal to sell british Energy to the French? What a bunch of dithering and incompetent chumps.

I know who I want to pay for all the hand-outs - it should be the Labour client-state in the local and central government bureaucracy and quangos, plus the professional welfare-state claimants (who trained by leaving school with no qualifications, and then did an apprenticeship in avoiding doing the jobs immigrants are now doing). Labour's entire philosophy of propping up failure and penalising success has now failed twice in my adult life. We need to cut the state payroll, income taxes and saving taxes ASAP ! All power to the people !

"53. At 12:27pm on 02 Sep 2008, CaptainJuJu wrote:
I hate Gordon Brown. Strong word, hate, and I don't use it flipantly.

Basically he will help those who are dumb enough to borrow way beyond their means, then when it inevetably goes wrong, I have to bail them out.

Thanks Gordon.....pillock!"




Strong words? Not strong enough. I despise Gordon Brown, but then, I’ve met him. Well, not actually him, but people exactly like him.

Some years ago when I was a lending officer in a bank, I would regularly see people who were already in over their heads, and who were trying to borrow yet more and more money.

One man I saw was a typical case. He had an existing loan, and came in to massively increase his borrowing. Although he was already up to his limit, he could just about manage his repayments at that time.

I refused to give him another loan, and warned him he shouldn’t look for further credit elsewhere. Of course he did. A year later we received a letter from a Debt management agency. He couldn’t pay his loans and was trying to reduce his payments. A quick search revealed he had taken out two loans since I saw him.

I rang the agency, and told them that we were responsible lenders, and informed them he had been turned down by us the previous year. I told them to go and speak to the two irresponsible ones he had borrowed from since then, as they had caused the problem.

He went bankrupt shortly afterward. He just couldn’t cope with his debts but he couldn’t stop incurring them. He and Gordon are the same type.

Darling: These are the worst conditions in 60 years! We're doomed!
Brown: I am King Gordon, ruler of Great Britain! The fundamentals of our economy are very strong!
Darling: But the peasa--- I mean electorate, what about them? We've run out of money and we have crippling debts!
Brown: Borrow more.
Darling: But that'll mean the problem will get worse!
Balls: So what?
Brown: Listen Darling, how will we get re-elected if we don't spend money?
Darling: There isn't any money!
Brown: LA LA LA LA LA!
Darling: There isn't any money and we can't raise taxes---
Balls: RAISE TAXES!
Brown: Yes! Raise taxes! ... Blears! Where is she?
Blears: I am here master. Your wish is my command.
Brown: Blears go to the press and tell them how great I am, then think of and implement a new tax. No do it the other way round.
Blears: Yes master.
Darling: But---
Brown: LA LA LA LA LA!
Balls: Hahahahahaha!
Darling: Noooooo
Balls: Hahahahahaha!
Blears: Tax... Tax... Tax...
Brown: Everything's going to be fine!

A Tory trick to censure a responsible comment from readers.

Any entity that loses touch with the centre is doomed to fail, so the pro-Tory comments in here are just a bunch of zealots talking to themselves. Camerons bullying at PMQ's has encouraged the wannabes, and that's something he has to accept responsibility for.

While the Tory sympathisers are smoking their crack pipe and believe they're helping win the election and usher in a Nirvana, they're doing the exact opposite. If they but realised how empty and nasty their comments looked they'd, probably, be horried and deny they made them.

It's clear to me the Tories have no forward thinking policies or sense of social fairness, and their leaders and friends and allies remain unfit for power. Indeed, I believe the revolution Labour can unfold will both shock and shame them. I hope so because their perfomance is pitiful to watch.

MrMickS

You could well be right that a dramatic simplification of the tax system would be a good thing.

I can't see this lot getting so radical. And I don't claim to have any understanding of the overall impact on public funding.

There is still a public perception that those who can pay more, should contribute more for public services. I've never worked out whether that meant proportionally more or more in absolute terms. It does seem odd that someone who earns around 40,000 pays the same rate of tax as someone on 4Million (even if the latter contributes much more in absolute terms - unless there's some really good tax-avoidance advice!).

My concern was that Brown's approach favours state handouts - i.e. creating voter dependency - rather than finding easy ways for people to retain what they worked for.

I hate it when politicians say "Well, if you reduce tax-take, which public services do you want to destroy?". Fact is that we've had thousands of people employed to do tasks that were created BY the government's legislation and regulation, in order to manage tax credits etc. etc. They call it "modernisation". I call it complication.

An old theme. If you've never been engaged in a real business, you have no idea what impacts change can have. This lot assume that computerisation equals being modern. It certainly can be a real contribution, under the right circumstances. But the profligate spraying of loot over systems that are poorly conveived, badly designed and in many cases unfit for purpose - and almost always way more expensive with far less deliverables than expected - is a key-note of the Blair/Brown era.

I'm happy paying taxes for things I believe the State should provide. But totally unhappy having a part of that tax plopped in the laps of growing numbers of "advisers" and spin doctors. If Ministers aren't bright enough to work out what to do, they should ask civil servants. If they want special advisers - the Labour Party should pay for them.

(But I forgot - senior civil servants aren't really the custodians of the nation anymore - just politicised apparatchiks. Another shame!)

Charles E H

You don't have to be a dyed-in-the-wool supporter of any party to be critical of a government (or any other organisation, come to that!).

I've found fault - that's to say I disagreed with - both Tories and Labour. (Even the Libs at a local level.) That's about taking a view of what they do, not tribalism!

Maybe a lot of tunnel visioned people on this and other sites, but don't pressume they are against people. Many of them, like me, are probably against bad delivery and the squandering of OUR resources.

81 niper

Just thought I'd inform you that I am not a die hard labour supporter. You might see that if you read my last comment. Speaking of straw. how will Rumplestiltskin Cameron spin us out of this worldwide economic crisis?. They are a little quiet about themselves.Hiding there lights under a very thick bushel.

You complained about Blair spin self righteously but it seems to be OK if Cameron does it if so It must be ok to criticise him for it.

Has anyone done the maths, if you divide £600,000,000 by £1750 the answer is 342,857, this is apparently the number of property transactions expected at or below £175000 for the next year. Given that mortgage approvals for the whole market are running at 33,000 per month ie:396000per annum and they are only approved mortgages some of which will not be taken up these figure published by thr Government are just plain wrong or lies.

The only action needed is for interest rates to be reduced and for people to perceive that houses and flats are not only affordable but appear cheap. Whether we are near that point is debateable, what is certain is that interest rates must be reduced very soon or all these pathetic actions by a trully bad government will be seen as what they are, the actions of people who have no understanding of business or markets.

#86

Excuse me, but as I remeber it was half the NewNewLabour cabinet who admitted to a bit of whacky baccy inhalation shortly after their appointment this time last year.

No tory sympathiser is hoping to usher in a Nirvana - that remark shows the head in the clouds idealogical utopian view of NewLabour.

The reason tories get elected is to sort out the financial disasters of previous Labour adminstrations with their wrong headed Zen idealogies; hence Thatcher after Callaghan and Healey's disaterous trip to the IMF; hence Heath after Wilson's disasterous "pound in your pocket" devaluation; hence Churchill after Atlee's disasterous bankrupting war loan form the US.

That is why a tory administration in 2010 is as certain as night follows day because all Gordon Brown can do to get us out of his credit fuelled excess is to spend more money. History rhymes.

#fairlyopenmind

Completely agree. the whole 10p tax fiasco is a good example of this. tax bands change; many people lose out and the government is forced to compensate them. rather than force lowe earners to claw the money back in tax credits why not just revert to the previous tax bands? But no, that's too simple and instead we have millions of extra tax credit forms to process and all the administration costs involved in doing that.

#85 LOL!

Your not John Bird or John Fortune by any chance?

There should be a shakeup up the comments section here on the bbc blogs. Many people constantly get their comments banned for breaking the rules, yet think they can continue to post abusive mesages about the government and worse, other members. Thats not to say there shouldnt be healthy criticism and debate over the goverment - but if your comment basically amounts to 'I dont like this party or that poster', without any facts, argument or civility, then your just wasting space.

I'd reccomend a '10 strikes and your out' rule - ie, if 10 of your comments are removed for breaking rules, you should be banned from posting. Its standard policy on most forums.

The reason tories get elected is to sort out the financial disasters of previous Labour adminstrations with their wrong headed Zen idealogies

That's been the historical lie but things are changing. The savvy politician, journalist, and freewheeling armchair pundit has a clue about this. The rest don't.

Perception lags reality, so the mere technicians spin their wheels and wave their arms, but the master is already ahead of the game and has won before the first shot is fired.

If I may paraphrase the unexpectedly statesmanlike Peter Mandellson, I'm insanely relaxed about the next general election. Not arrogantly, but reverently in respect of realities.

Wow Nick, descending from the bosom of the Beeb to chat to us mere mortals are you?

The BBC's very own Nick
Very rarely misses a trick,
Though sometimes he's biased
He's not nearly as pious
As the MPs who make us all sick!

Alistair Darling says unemployment is at historically low levels.

Aren't they trying to get 1 million off disability allowance and back into work?

In other words 1 million can be instantly added to the current unemployment level making it near historically high levels.

These small measures are just tinkering at the edges, they will not restart the market. The market has stalled due to a total lack of confidence in it. No one buys when prices are falling.

Every Labour government has ended with economic collapse and this one is no different. Its policy of high tax and spend and massive levels of waste has not worked and is slowly coming to an end.

Roll on 2010.

oh dear; I think that Brown/Darling have just confirmed my worst fears; they really don't have any idea what they're doing and are just getting the country into increasingly worse trouble in the longer term.

They're approaching all the problems in completely the wrong way due to their 100% denial that there's anything wrong with their general governmental financial history/plans.

Their whole approach is unsustainable and the processes/laws that they've put in place don't do the job properly.

They're still blaming everyone else for all our woes and at the end of the day they're increasing taxes to bribe/con the electorate into thinking they're getting a good deal when in reality the tax payer's getting completely conned in the long term.

I just hope that we have an election before they manage to complete their scorched earth policy.