Blair's staunchest union ally calls for a clampdown on house price speculators

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THE GOVERNMENT will today be urged to clamp down on speculators who are helping to fuel rocketing prices of property in the South-east.

Sir Ken Jackson, engineering workers' leader and one the Prime Minister's most loyal allies in the union movement, will say that the Government has failed to tackle house price inflation around London and will warn that it is indirectly hitting manufacturing indsutry.

In particular ministers should take action to identify those people who simply "buy and sell" for profit and ensure they are subject to capital gains tax.

Sir Ken, seen as the most "Blairite" union leader, will tell a "manufacturing industry summit" today that between 7 and 8 per cent of those in the South- east property market move on within 18 months and are artificially pushing up property prices.

Such property dealing increases interest rates and damages British industry, Sir Ken will tell an audience of ministers, industrialists and trade unionists. He will also call for enhanced stamp duty rates on house transactions and a clampdown on banks and building societies which lend as much as 130 per cent of the value of properties.

The general secretary of the Amalgamated Engineering and Electrical Union said yesterday that he would be "an unyielding critic of anyone or anything that would make it more difficult for the manufacturing sector to grow".

Sir Ken will also point out that while it is important for the Government to back the hi-tech sector, it was also critical for ministers to be aware of the contribution made by more traditional industries.

He will point out that some 3.8 million people are still employed in industries such as aerospace, chemicals and motor manufacturing. Manufacturing still made up some 60 per cent of UK exports and 20 per cent of gross domestic product, he will argue.

Sir Ken will tell the conference, which is also sponsored by the Manufacturing Science Finance union, that while hi-tech industries were essential, manufacturing was also both creative and a "wealth creator".