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Stamp phobia

• Robert Peston
• 7 Aug 08, 12:20 PM

I was supposed to be interviewing the chancellor this morning about the lessons of the credit crunch.

It was something I'd arranged with the Treasury over the past fortnight, to mark the anniversary of when it became much harder for our banks to raise money and a serious downturn in our economy began.

I was an hour from asking Alistair Darling my first question when I received a call from the Treasury. An official enquired whether I would be asking the chancellor about his plans for stamp duty, following all those reports that he is planning a temporary suspension of that tax on house purchases.

Stamp duty would never have been the heart of the interview. But I could not ignore it.

The precipitous fall in house prices we are seeing is part of the fall-out from the crunch. So Mr Darling's plans for possible changes to an important tax on housing transactions are material to any general discussion of the causes, consequences and future shape of the economic mess we're in.

It would have been weird to ask nothing about stamp. And what I particularly wanted to know is what the chancellor would say to potential house purchasers who may be holding off doing deals in the hope that stamp will be waived in the autumn.

That is a relevant question because we were contacted by estate agents yesterday claiming that the uncertainty over what will happen to stamp duty is further reducing activity in the already flat housing market, to the extent that they are quite concerned.

Long story short, I could not tell the Treasury that I wouldn't ask about stamp.

And the Treasury then cancelled the interview.

Which didn't surprise me or make me feel particularly grumpy. It would have been absurd for me to skirt around stamp, but the chancellor feels the resonant subject isn't quite within the spirit of the interview he agreed.

However the much more important point is that the chancellor feels he can say nothing about stamp, that to utter a world right now would be to pour petrol on a raging fire.

If he were to imply that there is not going to be a cut or suspension, and then there was a change, well he would be toast.

And he couldn't announce the details of any stamp plans he may have, because the Treasury doesn't know what's affordable so many weeks before the Pre-Budget Report - and, anyway, it would be wholly inappropriate to announce a tax change so potentially important during the summer recess.

So Alistair Darling has chosen to keep schtoom. But that too has a cost.

The prevailing view since is that he is going to make a stamp change. And that may well be encouraging those thinking of buying a property to delay, thus sending the housing market from torpor to coma.

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Barclays: credit and credibility

• Robert Peston
• 7 Aug 08, 08:29 AM

Over most of my 25-year stretch in journalism, has been the bank that swaggered and then stumbled.

Which is why so many observers of the banking scene have been assuming that, at some point during the current downturn in the banking cycle, Barclays would come up smelling of something profoundly unpleasant.

But so far it has performed significantly better than many of its peers. And although its chief executive, , says he's "acutely" disappointed with a to 拢2.75bn in pre-tax profits for the six months to 30 June, I visualise him saying that with just a hint of a snigger - because the decline at Barclays is far less than at most of its British competitors.

Barclays has done particularly well, given that so much of its growth over the past few years has come from an investment bank, , that positioned itself as the bank that liked to provide leverage.

So more-or-less every analyst on the planet expected Barcap to be the pre-eminent credit-crunch victim. But, to date, Barcap has not suffered credit losses anywhere near as big as , or , or even our own (there'll be more to say on the RBS mess tomorrow), and it remains profitable to the tune of 拢524m (down almost 70%).

How has Barcap avoided the silly risks that others wallowed in? It's difficult to be sure, since on paper Barcap is stuffed to the gills with CDOs, and monoline exposure and leveraged loans. But its apparently sitting on the less toxic stuff. And if it were to survive this ghastly phase of the banking cycle without suffering significantly increased losses, well it would have earned some respect.

Which is not to say it's avoided all pain. Barclays' losses from what we now appear to be calling credit market dislocation (but which most of us would call "making foolish bets") were 拢2bn, give or take a few million, and were split roughly evenly between the first and second quarters of the year.

More-or-less all its other businesses - from Barclaycard, to retail banking in the UK and around the world, to commercial banking, to wealth management, fund management and custody - are doing okay.

And there are three very striking features of these figures:

1) impairment charges, ignoring the credit-markets ghastliness, are up only a bit - and charges against loan losses in UK retail banking are only very slightly higher (which will make HBOS feel queasy);
2) it's been ruthless in cutting costs, to prepare itself for leaner times;
3) and it has captured a staggering 26% of the new mortgage lending market, up from just 6%.

That last statistic tells you quite how hobbled are most of the other British banks. Barclays is capturing huge share of a rapidly shrinking market because it has the wherewithal and confidence to play.

And lest you think it is taking foolish risks with house prices falling, the average value of these new mortgages is 51% of the value of the respective properties - so it'll make good money on all scenarios for our economy other than Armageddon.

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