A significant rift has erupted at the heart of the Labour government, pitting Chancellor Rachel Reeves against Deputy Prime Minister Angela Rayner over a controversial proposal to hike stamp duty.
The clash, revealed by The Guardian, centres on a bold plan put forward by Ms. Rayner to significantly increase stamp duty land tax (SDLT) on purchases of residential property. The Deputy PM argued the move was a necessary measure to generate vital funds for public services, a cornerstone of the party's election promises.
The Chancellor's Veto
However, the proposal was met with firm resistance from the Treasury. Chancellor Rachel Reeves decisively overruled her cabinet colleague, citing major concerns that the tax increase would place an unbearable burden on British families and risk destabilising the UK's fragile housing market.
This isn't the first time the two powerful ministers have found themselves at odds. The report highlights a pattern of disagreements on fiscal policy, suggesting underlying tensions within the new administration over how to balance its social ambitions with economic reality.
Market Jitters and Political Fallout
The very suggestion of a stamp duty shake-up has sent ripples through the property sector. Industry experts warn that any increase could severely dampen market activity, making it harder for first-time buyers to get on the ladder and discouraging those looking to move home.
This public disagreement exposes the difficult tightrope the government must walk. It must find the revenue to fund its ambitious plans for renewal without resorting to tax rises that could alienate its voter base or harm economic growth.
The outcome of this power struggle signals Chancellor Reeves's unwavering commitment to a cautious, market-friendly approach to taxation, setting a clear precedent for her tenure at the Treasury.
