BETA filters Key Events (2) Back to the stamp duty, and this is from Ben Zaranko, an economist at the Institute for Fiscal Studies thinktank, on the Times story. (See 8.49am) Like other economists, Zaranko is not opposed to the cut in principle because he sees it as an inefficient form of taxation. Stamp duty is an evil, distortive tax. Not much should be said in its defense, other than the fact that it collects quite a bit of revenue. This could be a positive move if – and admittedly it’s a huge if – this is the start of a wider overhaul of how we tax housing in the UK. https://t.co/bvKrBDpIHk — Ben Zaranko (@BenZaranko) September 21, 2022 Stamp duty has been around since 1694 – but maybe it’s time for some reform to the way we tax land and property. For a sense of what it might look like, look no further than this chapter of the IFS Mirrlees Reviewhttps://t.co/74APieMd3X — Ben Zaranko (@BenZaranko) September 21, 2022
Putin’s partial mobilization ‘admission his invasion is failing’, says defense minister
Ben Wallace, the defense secretary, says President Putin’s decision to announce a partial mobilization in Russia is an admission that the invasion of Ukraine is failing. Wallace said: President Putin’s breaking of promises not to mobilize sections of the population and illegally annexing parts of Ukraine are an admission that his invasion is failing. He and his defense minister have sent tens of thousands of their own citizens to their deaths, poorly equipped and poorly led. No amount of threats and propaganda can hide the fact that Ukraine is winning this war, the international community is united, and Russia is becoming a global pariah. My colleague Martin Bellam has more on this story on the Ukraine Live Blog. Robert Peston, ITV’s political editor, is more skeptical about the plan to cut stamp duty. He explains why in these tweets. The Achilles’ heel of the British economy has for decades been the link between consumer confidence and house prices, and the associated link between the popularity of a government and the health of the housing market. If @KwasiKwarteng and @trussliz announce plans… — Robert Peston (@Peston) September 21, 2022 to cut stamp duty, as revealed in @thetimes, they will have to explain how this does anything other than reinforce the over-concentration of UK household wealth in the homes they live in – which has been the limiting factor in such important economic and social reform… — Robert Peston (@Peston) September 21, 2022 for as long as I can remember. The simple question would be whether this is just a crude way to partially offset the negative impact on the housing market from expected rate rises, which could cost the Tories huge numbers of votes, rather than one of the… — Robert Peston (@Peston) September 21, 2022 The structural fiscal reforms to boost productivity that the new prime minister and chancellor promise. — Robert Peston (@Peston) September 21, 2022 Here are tweets from two thinktank chiefs responding to the report saying Kwasi Kwarteng will cut stamp duty in the “emergency budget” on Friday. One is on the left and the other is on the right, but there is considerable overlap in what they say. These are from Torsten Bell, chief executive at the Resolution Foundation. He was a political adviser to Ed Miliband when Miliband was Labor leader. The case: There is a strong case for reform. Stamp duty is a very bad tax – especially at high levels – that hinders mobility. The opposite case: a blanket cut in stamp duty would boost house prices and mainly benefit wealthier households in the South East https://t.co/dyU6jGbuey — Torsten Bell (@TorstenBell) September 21, 2022 Ideally you would cut stamp duty at the same time as council tax reform, particularly to collect more from higher value properties. Then you have a really valuable tax reform – added bonus that would be unpopular with many, which is all the rage — Torsten Bell (@TorstenBell) September 21, 2022 And Robert Colvile posted a long thread on Twitter about stamp duty. It starts here and is worth reading in its entirety. Covile runs the Center for Policy Studies and helped write the Conservative party’s 2019 manifesto. And here are his conclusions. So yes, we need to cut stamp duty – we proposed £0 to £500,000, 4% from £500,000-£1m, then 5% above that (with an extra charge for non-resident foreign buyers). — Robert Colvile (@rcolvile) September 21, 2022 But we also need to maintain and at least increase the supply of development land to ensure that any cut does not simply increase demand for the existing housing supply. — Robert Colvile (@rcolvile) September 21, 2022 PS If your answer is that we need even more of this unearned housing wealth, then a council tax readjustment to move away from 1991 valuations is a much fairer and less distortive way of doing it (although it is not just popular) — Robert Colvile (@rcolvile) September 21, 2022 The Department for Business, Energy and Industry has now published details of the energy support package for businesses. The section says: Through a new government energy bill relief programme, the government will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector such as charities and the public sector such as schools and hospitals) whose current Gas and electricity prices have inflated significantly in light of global energy prices. This support will be equivalent to the energy price guarantee put in place for households. It will apply to fixed contracts agreed on or after 1 April 2022, as well as metered, variable and flexible tariffs and contracts. It will apply to energy use from 1 October 2022 to 31 March 2023, for an initial period of six months for all non-residential energy users. The savings will first appear on October bills, which are usually received in November. As with the Household Energy Price Guarantee, customers do not need to take action or apply to the system to access support. Support (in the form of ap/kWh rebate) will be automatically applied to bills. To manage the support, the government has set a supported wholesale price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices expected this winter – the which is a reduced price per unit of gas and electricity. This is equivalent to the wholesale component of the energy price guarantee for households. It includes the abolition of green levies paid by non-domestic customers receiving support under the scheme. My colleague Graeme Wearden has more on this on his professional live blog. Updated at 09.16 BST
Liz Truss reportedly includes stamp duty cut in ’emergency budget’
Good morning. Jacob Rees-Mogg, the business secretary, will this morning give details of the energy support package that will be available to businesses over the next six months. I’ll cover the political reaction here, but my colleague Graeme Wearden will lead the coverage of this on his professional live blog. Under normal circumstances, a government announcement of this nature, involving spending in the tens of billions, would be made in the House of Commons, where MPs could ask Rees-Mogg about the details. The Commons are open today, but only for MPs to swear in the new king. It does not meet properly until tomorrow, and it is not clear why a full statement could not be scheduled for today. This is the second time an energy support measure has been announced in a way that minimizes parliamentary scrutiny. when Liz Truss announced the energy price guarantee, she did so in the form of a speech at the start of a debate, rather than a Commons statement, which would have allowed around 100 MPs to ask a question about it. However, we get a Commons statement on Friday when Kwasi Kwarteng, the chancellor, will unveil his “emergency budget” and this morning Steven Swinford and Henry Zeffman in the Times say it will include a surprise stamp duty cut , as well as the tax cuts already promised (reversing the rise in national insurance, canceling planned corporation tax increases and temporarily suspending green levies on fuel bills). In their story – which is not contradicted by No 10 – Swinford and Zeffman state: Truss believes a reduction in stamp duty will encourage economic growth, allowing more people to move and enabling first-time buyers to get on the property ladder… Under this system, no stamp duty is payable on the first £125,000 of any property purchase. Between £125,001 and £250,000 stamp duty is levied at 2 per cent, £250,001 and £925,000 5 per cent, £925,001 and £1.5 million 10 per cent and anything over £1.5 million 11. For buyers for the first time the threshold at which stamp duty is payable is £300,000. During the pandemic the stamp duty threshold was temporarily raised to £500,000 to stimulate the property market. Truss has previously said that reducing stamp duty is “critical” to economic growth. As chief secretary to the Treasury he said the higher rate of stamp duty, introduced by George Osborne, was “clogging” the housing market and leading to fewer transactions. Much later today, Truss will address the United Nations General Assembly. As Pippa Crerar notes in her preview, Truss will link her own low-tax economic philosophy to the cause of global freedom. Here is the agenda for the day. 9am: Jacob Rees-Mogg, the business secretary, is due to announce details of the plan to cap energy prices for businesses. From 10am: In the Commons MPs swear an oath of allegiance to the new king. 11.30am: Downing Street briefs lobby. Lunch (UK time): Liz Truss hosts a business roundtable on economic development in New York,…
