- guardian.co.uk, Wednesday March 15 2000 16.55 GMT
Rather than continuing to rely on higher interest rates to cool the property market, industrialists are urging the chancellor to increase stamp duty on home sales.
They argue this will have the advantage over dearer borrowing costs of preventing a further appreciation of the exchange rate.
Mr Brown has bought this argument before. In his first mini-Budget in 1997, he increased stamp duty on house purchases worth between £250,000 and £500,000 to 2.5% from 1%. For houses costing more than £500,000 the duty was increased to 3.5%.
Further increases would go down well with hard-pressed manufacturers in the Midlands and North East, who feel the level of interest rates is being determined solely by events in the South East.
But Mr Brown will have to be careful not to antagonise the growing number of middle class voters who live, or aspire to live, in houses worth more than £250,000.
Higher stamp duty on home purchases may also make the jobs market less flexible by increasing moving costs.
To soften the blow to Middle England, the chancellor could decide to reform stamp duty on share trading. The London Stock Exchange has been campaigning hard for the 0.5% duty on UK equities to be abolished, or at least reduced.
Such a move would cement the City's competitive position in relation to other financial centres but it may also run the risk of stimulating a stock market which some believe is already in danger of overheating.
