Brown should have said the government will not, and cannot, stop house prices falling. The stamp duty holiday is a bad mistake - all too characteristic of the prime minister. It's an expensive way to entice first-time buyers into negative equity, as all predictions are of steeper falls in house price. That money - maybe £600m - would be much better spent letting councils buy homes to keep a roof over the heads of families whose own homes have been repossessed - and buying cheap properties for social housing.
This is part of Polly Toynbee's article today calling for the Labour Party to get rid of Gordon Brown. I've not trabelled as far as Polly has on this: yes, there needs to be an abrupt change in the government's approach, and if it takes a new leader to get it, then I want one too. I've not yet seen that kind of new leader, though. It may be Miliband, but unless he starts talking about new policies, we won't know. But I certainly do agree with Polly about stamp duty, as I wrote a month ago:
I'm not convinced that any subsidy for the housing market is sensible: even schemes such as the special one for key workers seem to me likely to have a marginally inflationary effect, and the heart of our housing problem is price inflation. Except for those people who will go into negative equity, house price falls should be welcome, and the government should do nothing to try to prevent them. So I think tax breaks to prop up the market are a mistake.... A Labour government should simply be trying to help those at risk of repossession.
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