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Darling, not like that, you are missing it, as usual

Scotsman.com Business - My faith in Chancellor is rocked by strange choice of mortgage

AM I the only one who is more than a touch concerned that the man we entrust with the nation's finances, Chancellor Alistair Darling, is happy to openly boast that he has a mortgage with Northern Rock?

I'm surprised he's got a mortgage at all. Most people try to get rid of them by the time they are approaching their mid-fifties. But that is entirely his affair.

If he has to have a mortgage, as he is perfectly entitled to do, why couldn't he have chosen a slightly less racy lender than the Northern Rock? Personally, I have never had an account of any description with them and wouldn't touch them with a barge-pole....

I guess it's all a question of judgment, which brings me on to the Pre-Budget Report, which must go down as one of the most bizarre in the party's history.

Leaving aside the huge increase in inheritance tax relief, which I know is popular with the public, but could scarcely be described as mainstream left-wing ideology, the most indefensible part of the package has to be the massive tax bonanza for second homeowners, and buy-to-let landlords, while offering no help whatsoever to first-time buyers and those otherwise priced out of the market.

To cut the tax due on profits made by second homeowners and landlords from 40% to 18% at a time when we are in the middle of a housing crisis strikes me as either the height of negligence or incompetence.

I find it impossible to believe the Chancellor understands what he has done. Just as the market was cooling he will unleash another boom, the rewards of which will be reaped by the wealthy. Great news for those of us who, like Mr Darling, are already firmly on our way up the property ladder, but disastrous for young buyers, whose first home will now slip further along the distant horizon.

It has been easy to forget that the Government isn't just Gordon Brown this week and that someone else in Chancellor, but I suppose we must raise our eyes from the enjoyable sport of Brown Bottle Baiting and look at the incompetence of the rest of the team. And Darling in his bid to obey orders to outTory the Torys, without copying them, has been hastily throwing together policies which simply don't add up.

Comments

"To cut the tax due on profits made by second homeowners and landlords from 40% to 18% at a time when we are in the middle of a housing crisis strikes me as either the height of negligence or incompetence."

Au contraire: if rising house prices (if not, perhaps, values) are the main support of the UK's economic "success", any measure that helps prop them up before the bubble bursts makes excellent political sense.

To be fair, Darling has replaced a 40% rate with an 18% flat rate on CGT, but as there's no taper relief or indexation, my guess is it will mean a higher tax bill for buy-to-let landlords.

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