Downing Street Says » Housing announcement

Put that the Prime Minister s Spokesman (PMS) had previously said that taxation matters were for the Pre-Budget Report (PBR)/Budget and asked why a taxation matter had been announced before the PBR/Budget, the PMS said that he had previously said that those were matters for the Treasury and the Chancellor; the point at which the Government set out its overall economic policy was in the Pre-Budget Report and the Budget.

Asked repeatedly where the 600 million to fund the one-year Stamp Duty holiday would come from, the PMS said that there were two different elements. Firstly there was the DCLG package, which was funded, and secondly the Stamp Duty measure, which would be looked at in the round alongside all other Government measures and the Government s fiscal projections at the time of the PBR. Decisions about tax, spend and borrowing were matters for the Treasury to consider in the normal way as part of the PBR and Budget process. The Government had set out very firmly and clearly its spending plans for the period up to 2011.

Put that the Government had not decided how to pay for it, the PMS said that the tax change would be considered alongside the Government s fiscal projections at the time of the PBR.

Put that what had been announced today was just an intention, the PMS said no; the Government was going ahead with the plans announced today and the Chancellor had made that very clear. The Government would consider its overall tax, spend and borrowing plans at the time of the PBR and the Budget in the normal way.

Put again that announcements of this sort were usually made at the time of the PBR or the Budget and asked why these announcements had been made today, the PMS said that the Government wanted to take decisive action in order to help people immediately who were effected by what was happening in the housing market.

Asked if the announcements had come today as a response to speculation over the summer about whether or not the announcements would happen, the PMS said no; this was something that the Government had been considering over a period of time. Now that the summer holiday season was over the Government had taken the first opportunity to make its intentions clear.

Asked if the Government felt that things could be getting better in 12 months time, the PMS said that this was clearly a challenging period, but that he was not going to make a forecast about the housing market.

Put that the 600 million figure was presumably an estimate due to the fact we did not know how many houses would be sold in the next year, the PMS said that all Treasury costings were estimates.

Asked if the Government would consider extending the Stamp Duty holiday for another year, the PMS said that that would be a matter for the Chancellor to consider at the appropriate time.

Asked if the lower threshold of tax ( 175,000) would be changed, the PMS said that the announcement today on Stamp Duty was up to this time next year.

Asked repeatedly if it was the Government s policy to encourage people who otherwise wouldn t be able to afford to go into the housing market to buy at a time of falling house prices, the PMS said that it was for individuals to make decisions about whether or not they wanted to purchase their home or choose another option. What the Government was attempting to do today, in a targeted way and building on what we had done previously, was to help those people who were affected by what was happening in the housing market in a comprehensive way. The Bank of England had already taken action to enhance liquidity in the mortgage market and the Crosby review, reporting to the Chancellor, was looking at how to improve functioning of the mortgage market. There had been an interim report in July and the final report was expected in a month or so. These measures should not be looked at in isolation; they were a range of measures to help people who were affected by what was happening in the housing market.

Asked if there was a cap on the number of times someone could qualify for the Stamp Duty exemption, the PMS said that people should go to the Treasury for details.

Asked if it was the Government s belief that these measures would help rescue the housing market, the PMS said that the Government was not making a forecast for the housing market, but trying to help those individuals, particularly those on lower or medium incomes, who were affected by what was happening in the housing market.

Asked if the Government accepted that these changes would not fundamentally change what was going on in the housing market, the PMS repeated that he was not going to make a forecast for the housing market; this was about helping individuals who were affected by what was happening in the housing market.

Asked if there was a danger that this could exacerbate falling house prices if people lowered asking prices to 175,000, the PMS repeated that he was not going to get into forecasts about individuals behaviour.

Asked who would be helped by the Stamp Duty exemption, the PMS said that it helped those who were currently considering purchasing a property in the range of 125,000 to 175,000, who would now not have to pay Stamp Duty.

Asked if the Government would accept that one of the problems of this could be that there was now only a 75,000 gap between paying 1% Stamp Duty on properties above 175,000 and 3% Stamp Duty on properties above 250,000, the PMS said that the Government would accept that what we were doing was helping people who wanted to purchase properties up to the value of 175,000. Wider questions about tax structures should be addressed to the Treasury.

Put that the package announced by Hazel Blears would cost 1 billion and asked why Scottish taxpayers should pay for what was essentially an English problem, the PMS said that what was happening in the economy at the moment was affecting all parts of the United Kingdom and Government s economic policy was a matter for the United Kingdom Government.

Asked where the 1 billion was coming from, the PMS said that it was fully funded and that people should speak to DCLG for details.

Asked about the Government s view on the Organisation for Economic Co-Operation and Development s forecast for the end of the year, the PMS said that the Treasury would give its updated forecast at the time of the PBR. Clearly, these were challenging times for all economies, but the fundamentals of the economy remained sound and resilient, as the Prime Minister had been saying yesterday.

Put that the Prime Minister s two announcements made independently of the PBR and the Budget, on 10p tax and Stamp Duty, had hindered any expectation of stable taxation policy, the PMS said that he would not accept that. As the Prime Minister had said yesterday, we currently faced a fairly unique set of economic circumstances and many people in this country would welcome the fact that they would be receiving 120 this year through reduced income tax for basic rate payers, and many potential house buyers would welcome the benefits that today s announcement on Stamp Duty and the other measures would bring.

Put that there had been a claim in The Times today that the Prime Minister had leant on the Chancellor to change his forecast in the Budget, the PMS said that he was not aware of that happening.

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» Tuesday, September 2, 2008

Housing announcement

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