Slashing stamp duty would be a wise move

The ‘rabbit out of the hat’ in Kwasi Kwarteng’s mini budget this Friday is likely to be a cut in stamp duty on property purchases. If so, it will be a popular and wise decision. Not only might it help generate extra activity in a housing market which looks like flagging as interest rates bite – or maybe mitigate a decline in activity – it should help to promote labour mobility by making it easier for job-seekers to move around the country to look for work or further their careers. Moreover, depending on at what level it is set, a stamp duty cut might well generate extra revenue, too. 

Never was there a better demonstration of the Laffer Curve in action than with stamp duty in the UK property market. In spite of hikes in stamp duty by then chancellor George Osborne, stamp duty receipts struggled to reach the peak they had achieved on the eve of the 2008/09 financial crisis.