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Economists warn stamp duty reform could push up prices

Economists are warning that the Chancellor's surprise reform of stamp duty could push up house prices.

George Osborne is replacing the old system of a few big jumps with gradual, tapered rises. He says that overall 98 per cent of homebuyers will pay less in future.

Business Editor Joel Hills has been finding out how it will work.

Autumn Statement: Inheritance tax relief for Ebola workers

As well as an overhaul to stamp duty, George Osborne announced a raft of additional key measures in his Autumn Statement, including inheritance tax exemptions for aid workers who travel abroad to help the Ebola crisis.

Additional key measures unveiled by the Chancellor:

  • Inheritance tax exemptions for aid workers who go to help with the Ebola crisis
  • Crackdown on tax avoidance, including a 25% levy on firms that divert profits overseas
  • Non-dom charges to be increased for people who have been in the UK more than 12 years;
  • £1.2 billion revenue from bank Foreign Exchange trading fines to go to GP practices
  • Air Passenger Duty to be abolished for under-12s.

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Osborne 'freezing public workers out of recovery'

Union leaders have criticised George Osborne for failing to reward public sector workers in his voter-friendly Autumn Statement.

With talk of £12bn savings so far from freezing and holding down the pay of dedicated nurses, teachers and other public sector workers - and similar to come until the deficit disappears - the Chancellor is effectively freezing public servants out of the recovery.

For six million public sector workers another four years of pay pain beckon as their pay continues to be held back below the cost of living.

– Frances O'Grady, general secretary of the TUC

The Chancellor's ideological pursuit of austerity economics is continuing to take its toll on our public services and has led to economic misery for millions of ordinary working people and their families.

Teachers' pay has also fallen well behind the rising cost of living with a cut of 15% in real terms.

– NASUWT general secretary Chris Keates

(It was a) low-key statement that included almost nothing of significance that hadn't already been widely trailed or previously announced.

It did confirm that the Chancellor continues to fail in his primary objective of cutting the deficit and none of the supply side measures announced today are likely to revive the Chancellor's failed programme of economic rebalancing.

– Grahame Smith, the general secretary of the Scottish Trades Union

Stamp duty reform 'will end up inflating property prices'

George Osborne's overhaul of stamp duties will harm - not help - home buyers by inflating house prices, a leading property campaigner has said.

There is a real risk that today's stamp duty changes will just end up inflating house prices.

A house sold at the current average price of £273,000 will now be liable for £4,540 less stamp duty, but since sellers want to maximise the sale price of their property, they will expect buyers to pay this money to the house instead. The result would be the price of this house increasing by 1.7%, while leaving struggling first-time buyers no better off.

You have to wonder whether George Osborne is trying to stoke up house prices in advance of next year's general election.

– Duncan Stott, Director of Priced Out, a campaign for affordable house prices

Mr Stott said any changes to stamp duty payments must be accompanied by major reforms to council tax payments.

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Osborne 'failed to tackle big household pressures'

George Osborne missed an opportunity to tackle the "big household costs" that are leaving families struggling, the Citizens Advice Bureau has said in response to the Autumn Statement.

A freeze on fuel tax, exempting children from air passenger duty and increasing the personal tax threshold are small gains for households.

But today is a missed opportunity to address some of the larger costs families face, particularly around childcare and energy bills and some people are still without access to basic banking services.

– Gillian Guy, Chief Executive of national charity Citizens Advice

'Vast majority' of homebuyers benefit from Stamp Duty change

Most homebuyers will benefit from the reform to Stamp Duty, the Council for Mortgage Lenders said. Credit: Rebekah Downes/PA Wire

The Council of Mortgage Lenders, which represents the UK's building societies, has strongly welcomed the Government's changes to Stamp Duty.

Director Paul Smee said: "This fundamental reform has been a long time coming, but better late than never. Although there are losers as well as winners, the vast majority of mortgaged transactions will benefit from lower tax as a result of this move."

Mr Smee said CML figures suggested that under the new system, only around 1.5% of transactions would attract more tax.

Over the past year the proportions of mortgages in different price brackets, according to the CML's figures was as follows:

  • up to £125,000 - 21.6%
  • £125,001-£250,000 - 47.9%
  • £250,001-£925,000 - 29%
  • £925,001-£1.5 million - 1.1%
  • Over £1.5 million - 0.4%

Miliband attacks Government's 'broken promises'

Ed Miliband has accused the Government of going back on its promise to cut the deficit by 2015.

Labour tweeted this image of David Cameron after the Autumn Statement. Credit: Labour

George Osborne admitted that the deficit was not falling as fast as he hoped when announcing his Autumn Statement today, promising to achieve a budget surplus by 2019/20 instead of the original target of 2015.

Ed Miliband said: "David Cameron and George Osborne have now failed every test and broken every promise they made on the economy.

"The Tories promised living standards would rise, but while millionaires have got a huge tax cut working people are £1600 a year worse off."

"We will balance the books in a fairer way and save our National Health Service with a fully-funded long-term plan."

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