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Eagle Eye

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Ben Chu: Darling giveth - and taketh away

Posted by Eagle Eye
  • Wednesday, 24 March 2010 at 02:11 pm

Now you see it...

So much for Alistair Darling's promise that this budget would contain no pre-election give-aways. From midnight tonight there will be no stamp duty on homes costing up to £250,000. Apparently this will be paid for by increasing the stamp duty on properties selling for more than £1m to 5 per cent.

But actually this looks more like a disguised take away than a give away to me. The Chancellor wants to encourage first-time buyers on to a property market that by historical ratios of house price to earnings is still overvalued. Those already on the ladder looking to sell will welcome new entrants to the market. But what about the best interests of those new entrants? Darling says the housing market is in a process of "slow recovery". Those first time buyers who act on the Chancellor's new incentives better hope he's right. Otherwise: hello negative equity.

I'm also less than impressed with all the stuff about guaranteeing everyone a bank account to tackle "financial exclusion". This sounds to me like more customers on whom the banks can levy their famously penal fees when they go overdrawn (assuming these individuals don't presently have bank accounts because they're hard up). So good news for the banks, but I'm not convinced it's such good news for the financially excluded.