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The Guardian - UK
The Guardian - UK
World
Mark Tran

Stamp duty: to suspend or not to suspend?

That is the question for the chancellor, Alistair Darling, and the prime minister, Gordon Brown, one year into the credit crunch.

The Guardian and Independent lead on the possibility of the government suspending stamp duty on properties worth up to £250,000 in an attempt to kickstart the moribund housing market.

Most of the papers - even the Sun - frown on this unashamedly populist idea.

The Sun argues that such a move would either send house prices out of the reach of ordinary people once again or lure vulnerable first-time buyers into debt.

Its more upmarket stablemate, the Times, considers stamp duty to be a bad tax and says tinkering with it would distort a market that already enjoys favourable tax treatment

Howard Archer, a financial analyst , ponders the impact of such a move on the government's already battered finances, saying: "They are in such a mess at the moment, you wonder if they can afford it."

The Independent's economics editor, Sean O'Grady, is one of the few commentators to back the proposal.

He argues that the property market is traditionally remarkably responsive to small but eye-catching initiatives.

In a reminder of the poor state of the housing market, the FT, among others, reports that home repossessions have leapt more than 40% since the housing market slowdown began last year.

Northern Rock, which had to be bailed out by the government, reported first half losses of £600m, worse than expected.

Editorial writers fear that mortgage defaults are the true threat to the bank - and the taxpayer - as it is now a nationalised institution.

The FT says it would be a mistake to take fright at losses and slow restructuring down - in other words, keep shrinking the Rock as much as possible.

This is an extended extract from the Wrap, theguardian.com's roundup of the day's news.

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