… but radical plans for infrastructure for the North of England were sadly lacking
It took a long time to get to the main event – the last five minutes to be precise. The Stamp Duty Land Tax has been reformed in a surprise move that will cost the government £800m but cut the tax bill of over 98% of home buyers.
It is clear that the Conservative’s view this as a risk worth taking as it will stimulate the market just as there have been signs that it is cooling.
It was a statement which was strongly crafted to highlight the differences in economic ideology between the Conservatives and Labour: boost the supply side of the economy by introducing tax breaks and cutting spending, which will lead to an overall increase in aggregate demand.
This leaves the government open to ‘all talk, no action’ criticism on the Northern Powerhouse concept
The rhetoric on boosting infrastructure pre-statement was strong but in the end there was more detail on previously announced measures rather than anything radically new. I was expecting more details on a high speed rail link between Leeds and Manchester but while it was alluded to it was not expanded upon. This leaves the government open to “all talk, no action” criticism on the Northern Powerhouse concept.
In fiscally neutral budgets it is always difficult to make any major changes but a stronger commitment to large-scale projects would have been a welcome boost to the infrastructure sector. It feels like an opportunity missed for construction.
Michael Dall is an economist for Barbour ABI
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