Northern Rock and Stamp Duty Land Tax

Damn. I spend a day out enjoying the North Devon drizzle, and it all kicks off behind my back.

As I have said often enough, The Goblin King's "sixty three consecutive quarters of economic growth" (the first eighteen were under the previous Tory gummint, of course) were based on an illusion of wealth caused by spiralling house prices* and artifically low interest rates**.

All bubbles burst eventually, and once they do, there is nothing you can (or should) do to stop it. I listed Nulab's first four desperate, and futile, attempts here. Throws five and six were ... on the same day ... £3 billion more for Northern Rock and they're seriously considering nicking the Tories' f***ing stupid plan to axe Stamp Duty Land Tax for first time buyers (which they in turn took from that economics genius Krusty Allsopp, 'nuff said), which will cost future taxpayers another few £ billion (the 'tax cut' won't be mirrorred by a much welcomed spending cut, it'll just be added to gummint borrowings, in other words, today's tax cut is a future tax hike)***.

To recap: house prices are falling at 1% to 2% a month (total housing stock falling in value at about £10 billion per week), but turnover is still shrinking rapidly, so who in his (or her) right mind seriously believes that a further 1% reduction in price will bring buyers flooding back to the market?****

At least Normant Lamont had the decency to throw in the towel after losing £2 billion in one day.

The delicious irony is, these bastard MPs are all second-home owners, so they are panicking on a purely personal level, as well as on a political level.

* The Goblin King: "I think the important thing is that over the last 10 years people in the South have seen their living standard rise substantially. They've seen their net wealth rise even faster than their incomes."

** Former Bank of England Governor Eddie George: "We knew that we were having to stimulate consumer spending. We knew we had pushed it up to levels which couldn't possibly be sustained into the medium and long term."

*** I'm not disputing that Stamp Duty Land Tax is, taken in isolation, a totally evil wealth/property tax, but my view is that it should be rolled into Land Value Tax rather than being scrapped, that's a political thing.

**** There's a fine article in The Times pointing out that the Tories tried the same wheeze in 1991 and it achieved nothing, via enuii at HPC.