Call for new UK economy boost

Posted on February 22, 2009 by  
Filed under UK Mortgage and Finance News · Tagged:

The government is being urged to spend an extra £20bn to stimulate the economy through measures to boost the housing market.

The prominent group of Labour members – Progress, is calling for a freeze on stamp duty on houses valued under £1m for the rest of 2009 and the offer of a £1,000 tax credit to home buyers.

It also wants to see capital gains tax cut and Jobseeker’s Allowance raised.

Former MP Chris Leslie, who is behind the proposals, argues consumers could help the UK out of the economic slump.

Progress, an independent group made up of Labour Party members and trade unionists, promotes modernising ideas and policies.

Mr Leslie, a friend of Prime Minister Gordon Brown, says 2009 should be the defining year of the recession and argues prompt activity by investors and consumers could kick-start the economy.

As well as a stamp duty holiday for properties worth up to £1m, he recommends cutting the capital gains tax rate on new investments from 18% to 10%.

He also wants Jobseeker’s Allowance to be increased by £10. Current payments range from £47.95 to £94.95 a week, depending on age and status.

The paper by Progress recommends a combination of “£12.5bn of additional support and tax reductions stretching to all sectors across the economy”.

It also encourages the chancellor to add “a further £7.5bn in capital infrastructure investment in the current spending review period”.

Mr Leslie said: “The ideas we suggest are designed to ‘define’ 2009 as the bottom of the recession.

“Doing nothing would cost us all dear in the long run. Injecting money into the economy in 2009 will allow the country to return to growth more quickly than if we let the market continue to spiral downwards, which would lead to even greater budget deficits in the longer term.

“We hope that the chancellor will look seriously at these ideas but we are under no illusions about the difficult task he faces in an era of global recession and international credit dysfunction.”

On Wednesday, the prime minister said Britain was working with world leaders towards a “global deal and grand bargain” to deal with the economic downturn ahead of the G20 economic summit in London in April.

Contact us

Leave a Reply