I don’t know why Brown didn’t reverse a Tory tax rise (introduced at a time when they were scrabbling for revenue themselves) and remove VAT from building work (it’s levied on all improvements - everything except new build).
It would help the builders - and people usually have to buy things to go in the extension/loft conversion. Plus, bricks, plasterboard and mortar are some of the few things we still produce in the UK.I can't see a 2.5% cut having much more effect on people's spending than the stamp duty cut had on the housing market.
The BBC (in the form of business correspondent Robert Peston, whose commentariat are a well-informed bunch - the blog's worth reading for the comments alone) are still talking about the crisis as a problem caused by not enough people buying houses at high enough prices :
"at the heart of our economic problems has been this decline in the housing market ... "
It's not a decline, it's a correction. What was amazing is that the boom (fuelled by easy credit, dual income buyers, and City bonuses) lasted so long. It was about four years ago that I started getting invites through the post to buy-to-let seminars. Isn't there a saying to the effect that when the taxi-driver starts giving you share tips it's time to sell ?
If the view of HMG (and Peston seems to have a hot-line to the Treasury) is that declining house prices are the problem, then the only way they'll fix it is by printing money.
(UPDATE - my commenters tell me that Gordo CAN'T scrap VAT on building work - like so many EU things, it's a one-way ratchet. We had an opt-out, but we got rid of it and we can never get it back again. That's also why the VAT cut was to 15%. Apparently the EU won't let us cut any more)
Dear Mr Brown
Are your debts becoming harder to pay?
Is your over inflated Housing Market in Crisis?
Have your Banks been squandering money at a level that could bring your economy down, but the revenue was good, so you didn't want to meddle?
Are you up a creek without a paddle?
If so, then:
Consolidate your debts into one easy to pay loan from the IMF !
With IMF loans your can delay the inevitable even further and maybe have enough spare for that holiday you promised yourself.
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