Chancellor Alistair Darling has refused South Australia drought worsens ...
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Blair scared of Brown - Prescott ... to rule out changes to stamp duty after reports it may be temporarily axed to boost the housing market.

He said he was considering "a number of measures" to help people during the economic downturn.

The BBC understands that the most likely option is to allow home buyers to postpone payment of stamp duty.

Mr Darling also said Prime Minister Gordon Brown could "turn things round" and win the next general election.

People buying homes costing between £125,000 and £250,000 pay 1% stamp duty at the time of sale.

Those spending more than £250,000 pay 3%, while homes worth £500,000 or more incur a 4% rate.

Windfall tax

The Sun newspaper reported on Tuesday that stamp duty was to be temporarily axed, as part of an economic recovery package being put together by the prime minister.

Asked about the report in a wide-ranging interview on BBC Radio 4's Today programme, Mr Darling said he was "looking at a number of measures" and had not "concluded exactly what we need to do".

A temporary deferral would allow house buyers extra time to pay the tax while the government would not lose out on the revenue altogether - last year it raised £6.5bn from stamp duty.

The Conservative government temporarily suspended stamp duty for all properties worth less than £250,000 during the last housing recession in 1991, in an effort to boost sales.

Shadow chief secretary to the Treasury Philip Hammond told the BBC the government should adopt the Tories' "fully costed" plan to lift 90% of first-time buyers out of stamp duty altogether.

'Enthusiasm and zeal'

But he added: "There's no magic wand. They got us into this mess by not behaving prudently during the good years."

During his interview, Mr Darling conceded that it was "very difficult to speculate" on what would happen to house prices in the coming year, but added that it was "perfectly true" the British economy would slow down.

He also argued that there were problems in "practicality" with calls for a windfall tax on energy companies but said he would work with energy companies to try to help people meet higher payments.

The chancellor, who is deputising for the prime minister while he is on holiday, also said he was optimistic Gordon Brown could overcome his current political difficulties to "turn things round" and win the next election.

Asked if Foreign Secretary David Miliband would still have a job in government after his recent article on Labour's future, which failed to mention Mr Brown, he said: "Of course."

Mr Darling said his colleague had been trying to get across that, as long as the party was able to "recapture the same enthusiasm and zeal", it could win the next election.

Pressed on whether Mr Brown had that zeal, he said: "He has and that's why I have supported him over all these years.

"I think the prime minister is very focused on what we need to do to recapture people's enthusiasm," he added.

"I am very clear in my mind that, provided we can get across to people what we're for, the difference that the government can make, the clear principles of fairness that govern everything we can do, then we can turn this situation around ...

"I'm optimistic we can turn things round and we can win."

(BBC)

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