Today saw yet another blow for potential homeowners in Britain with news that the Government collected almost £1 billion more from home buyers in Stamp Duty in 2013-14 than it did in the previous year. The total soared by 19 per cent from £4.7 billion to £5.6 billon, according to Lloyds Bank. The average homeowner is therefore set to pay £12,000 in stamp duty over their lifetimes, with this figure skyrocketing in London to £38,000.
The rise is due in part to a combination an overall increase in the number of properties sold as well as the ratchet effect of more homes being dragged into higher bands. The ‘slab rate’ design in particular has been criticised by the TaxPayers’ Alliance amongst others. This means that buyers pay the higher rate on the full value of a transaction, not just the value over a threshold. The Institute for Fiscal Studies has called it ‘a strong contender for the UK’s worst-designed tax’.
London Central Portfolio and Cass Business School estimate that 13,866 people a year are reducing the asking price of their house to get under a threshold.
Much of the help given to buyers under George Osborne’s Help to Buy scheme will simply be taken back through increased Stamp Duty receipts thanks to higher prices. To me, this sounds like yet another seat for administrators on the whimsical carousel of Whitehall bureaucracy, where money is handed out by one administrator only to be taken away again by another.
The long term solution is clear: abolish Stamp Duty entirely. But in the mean time, home buyers desperately need relief now and the Chancellor should follow one of the three options in our 2013 proposals: halve the rates, reform the structure or double the thresholds.
If you haven’t signed up yet, add your voice to the StampOutStampDuty campaign with our quick tool to send a message to your MP. Go to StampOutStampDuty.org
Sir Peter Bazalgette, the chair of the Arts Council England, yesterday told a Centre for Policy Studies conference that the Government should continue give taxpayers’ cash to his organisation because the money is necessary to spend on ‘risky’ art projects. In other words, there are projects that profit-seeking companies and arts charities funded by charges and donations would see as a waste of their scarce resources. But this poor value for money isn’t a concern if it’s only taxpayers who will have to pay. Continue Reading
Thanet District Council in Kent has come under pressure to issue a compulsory purchase order (CPO) for local Manston Airport, which closed on 15th May, with the loss of 144 jobs. This marks a low point in the airport’s recent turbulent history, which had seen it host a James Bond movie and target 6 million passengers a year.
Manston Airport’s closure has proved contentious. A petition launched by Roger Gale MP has already attracted attention, and even Nigel Farage has waded in, describing the closure as “economic vandalism”. This support for the reopening of Manston Airport has culminated in the council’s consideration of a CPO.
That Manston Airport has closed is disappointing, not least for those who worked there. But it isn’t surprising. The airport has seen a series of owners, and none succeeded in making it viable. It is reported that Manston Airport had been losing £10,000 a day before its closure. Thanet taxpayers would therefore face a bill for £3.65 million a year if it were to reopen – and that’s before factoring in its price tag and necessary investment.
It would not be the first public body to purchase an airport with taxpayers’ money. Prestwick and Cardiff airports were bought by the Scottish and Welsh Governments respectively. Both have gone on to eat up millions of pounds. These examples should serve as a warning to Thanet District Council – a local authority not known for its aviation expertise – to focus on essential services.
If that’s not enough, then it should remember its other bad investments. Dreamland, a derelict theme park, was subject to a CPO in 2011. £6.8 million of taxpayers’ money has since been ploughed into the site without generating a single penny in return. The port at Ramsgate, meanwhile, has seen its revenue plummet under council ownership – yet still consumes millions of pounds in investment.
Central Government learnt the hard way in the 1970s that ‘picking winners’ becomes a game of subsidising losers. Thanet District Council, unfortunately, is yet to accept this. Losing Manston Airport would be sad, but throwing millions of pounds of taxpayers’ money at a white elephant would be tragic.
Fury continues to grow at Salisbury Council’s lack of coordinated thinking when it comes to encouraging shoppers into the city centre. With occupancy rates of less than 25 per cent at its Culver Street car park, the council have been reduced to slashing the price of parking there and now is offering free parking after 3pm everyday. For some traders this is a welcome concession, but for others it is too little too late and involves yet more taxpayers’ money being spent on a forlorn attempt to make the council’s white elephant car park more attractive to drivers. Continue Reading
Centre for Policy Studies (CPS) chairman Maurice Saatchi has called for small businesses to be exempt from Corporation Tax and investments in small businesses to be exempt from Capital Gains Tax. The policy is being launched at their Liberty 2014 conference to mark the group’s 40th anniversary. Continue Reading