Pat McFadden, the Secretary of State for Work and Pensions, accused the Tories of making unfunded tax changes and failing to learn from Liz Truss’s disastrous mini-budget
Kemi Badenoch’s pledge to abolish stamp duty is “desperate” and a reminder of Liz Truss, a top minister has claimed.
Pat McFadden, the Secretary of State for Work and Pensions, accused the Tories of making unfunded tax changes – and said they had failed to learn the lessons from Ms Truss’s disastrous mini-budget.
In a bid to enliven a lacklustre party conference, the Tory leader pledged to abolish Stamp Duty, which she said was a “bad tax” that puts a drag on the housing market.
READ MORE: Kemi Badenoch pledges to scrap Stamp Duty as Tories desperately battle for attention
Mr McFadden told TimesRadio: “Well, we’ve been in this movie before, haven’t we? With the Tories announcing tax changes that they couldn’t fund. It happened three years ago. It happened in their manifesto.
“I think it’s desperate from a party that couldn’t fund our last round of tax cut promises. And in order to try and have a short sugar rush, they’ve announced another round. And I’m afraid the stamp duty policy wasn’t the only unfunded spending commitment announced at their conference. They’ve got to learn the lesson of what they did in 2022, because the British people are still paying the price for it.”
The senior minister was pointing to the disastrous mini-budget which ravaged the economy with billions of pounds of unfunded tax cuts in 2022.
Ms Badenoch announced the plans on Wednesday at Tory party conference, only for it to emerge later that it would only be axed for people’s primary residences – and would still apply to second homes, properties bought by businesses and overseas buyers.
The move will benefit people buying expensive homes the most, as no Stamp Duty is paid on homes worth up to £125,000, rising as the property gets more expensive.
First-time buyers don’t have to pay stamp duty if their new home costs less than £300,000.
The Tories estimate the plan would cost around £9billion a year, which they claim would be funded out of £47billion in spending cuts to welfare, foreign aid and the size of the civil service. But economists have warned that the planned cuts are vague and difficult to assess.
Experts argue stamp duty is “not necessarily” the biggest barrier to buying a home for some people and the benefits to buyers from scrapping it could be cancelled out by house prices being pumped up.
Stuart Cheetham, chief executive of mortgage lender MPowered, said: “Scrapping stamp duty entirely would be very popular, and it would deliver a huge caffeine jolt to the sluggish property market.
“But there’s also a risk that it would drive up prices so fast that any savings for first-time buyers would soon be cancelled out.”
Lucian Cook, head of residential research at Savills, said that if scrapping stamp duty was a “simple tax giveaway, the likelihood is that the current stamp duty bill simply passes through into prices”.
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