Abolishing Stamp Duty is an excellent idea – but will it win the Tories a hearing?

The big set-piece speech at party conference represents, for any leader, more risk than reward. Even a very good one will, in the normal course of events, garner only a short period of good headlines and perhaps rally opinion inside the party; a bad one can be terminal.

Consider Sir Keir Starmer. The Prime Minister’s address to the comrades in Liverpool has been widely praised, with some describing it as the speech of his life. Yet once the media circus moved on, nothing had really changed. We’re back to talking about the looming budget and his government’s weird decision to collapse a major national security trial, just as we would have been anyway.

So if we find the Conservative Party having settled back into its familiar rhythms in a week or two, it won’t be because Kemi Badenoch didn’t deliver a good speech, or even a good conference. It simply reflects the limit of what a good speech or conference can do for a party or leader’s long-term fortunes.

And it was a good speech, as they go. As I wrote in the Sun on Monday, one of the things Badenoch had to do this week was demonstrate that she could make use of the media spotlight when she had it (her lack of enthusiasm for seeking it out is a broader problem). This she did; as a bleary press pack returns to London, Tory coverage is focused on her headline commitment to scrap Stamp Duty rather than the party’s internal divisions.

It’s a well-chosen policy, too. Stamp Duty is a very unpopular tax with anyone who understands its economic impact, which means the Conservatives secured the praise of a lot of very credible people. It brings in ‘only’ (a relative term in today’s fiscal environment) £11bn or so, which is about the same as Jeremy Hunt’s pre-election cut to National Insurance; but unlike that, abolition would stimulate positive economic behaviour which would mitigate that headline figure.

One of the biggest problems with Stamp Duty, for example, is that it disincentivises downsizing, because people are understandably reluctant to realise the fabulous cash value of their home and then hand a big chunk of it to the government – especially older people, who might otherwise be keen to move somewhere smaller but also cognisant that they could leave the whole value of their home to their children, should their estate fall below the Inheritance Tax threshold.

In a country which isn’t building nearly enough houses, under-occupation is a real problem, so it’s good to see the Conservatives pledging to do something about it.

Historically, there has tended to be an inverse relation between the number of specific and attractive proposals in a party’s manifesto and its proximity to power; making unrealistic promises is one of the comforts of opposition, whereas a party in government is much more aware of suddenly not having £11bn to spend.

But whilst there might have been the temptation, given the polls, for Badenoch to offer something absolutely wild, abolishing Stamp Duty falls into the sweet spot of ambitious, but plausible. This is wise: the Conservatives appear still to be the party most trusted by the British people on economic matters, and any path back to office – or even down from Golgotha – must be laid on that foundation.

If there was any disappointment, it was the lack of any larger offer on housebuilding. Abolishing Stamp Duty will have good long-term effects and encourage the more efficient distribution of existing housing stock, but it won’t actually get anything built.

Nor will it provide any immediate reduction in house prices; as during Rishi Sunak’s Stamp Duty holiday a couple of years ago, sellers will simply add the value of the tax onto the price of their homes, knowing buyers have the cash to hand.

This could, however, be a problem of Labour. If the Conservatives recover their position enough for it to seem even plausible that Stamp Duty might soon be abolished in the next parliament – and that’s a very big ‘if’, obviously – the market could slow right down as buyers and sellers wait for it to happen, which would do the economy no favours in the short term and heap more pressure on Rachel Reeves.