Stamp Duty Land Tax (Reduction) Bill

Felicity Buchan Excerpts

2nd reading
Monday 24th October 2022 Commons Chamber

[The Exchequer Secretary to the Treasury (Felicity Buchan)]

I beg to move, That the Bill be now read a Second time.

We face challenging times, and challenging decisions need to be made, but one thing on which I hope we can all agree is that home ownership must remain within reach, and we must support the property market where we can. To do that, we are making good our promise to ensure that hard work is rewarded and people can keep more of their hard-earned money when they buy a home.

The property industry plays a hugely important role in our economy. It is crucial to our growth prospects, and it supports hundreds of thousands of jobs and businesses. Home ownership remains one of the surest ways to give people a stake in the success of our economy, and we know that stamp duty really affects people’s decisions on whether to buy a property. The Bill confirms a significant reduction in the cost of moving home and getting on the housing ladder, which will allow more people to buy and to move each year. It will also mean more business for painters, decorators, moving companies, plumbers, electricians, and all the industries that are reliant on a healthy housing market. More transactions each year will mean that more people can move more easily to find work, and that will boost labour mobility at a time when people do not need barriers to changing jobs.

Like many Members on both sides of the House, I grew up in a country where home ownership was a dream, but an achievable one. It is only right that we give those who are now seeking to climb on to the housing ladder a helping hand, so that this dream does not slip out of reach. Since 2010, we have helped more than 800,000 households to purchase homes through Government-backed schemes such as Help to Buy and Right to Buy, and we have made sure that stamp duty land tax works for those who wish to get on to and up the property ladder.

First, in April 2016, we introduced the higher rates of stamp duty for those purchasing additional properties, which form part of the Government’s commitment to first-time buyers. These rates are 3% above standard residential stamp duty rates. The following year, in the 2017 autumn Budget, we introduced first-time buyer relief to permanently increase the price at which first-time buyers start paying stamp duty. The Government are proud that nearly 700,000 purchases have benefited from this relief since its introduction. Because of our action, the annual number of first-time buyers is at a 20-year high.

However, this is not just about how we help people purchase within the existing stock of housing; we are also boosting investment in home building and affordable housing. In 2019-20, nearly 243,000 net additional dwellings were delivered—the largest number in almost 20 years—and the Government are on track to meet their commitment to deliver 1 million additional homes during the current Parliament. In the 2021 spending review, we also announced £11.5 billion for the affordable homes programme to build 180,000 more of the affordable, quality homes that the country needs, including tens of thousands for social rent.

The Government’s cuts in stamp duty land tax were implemented on 23 September with immediate effect, and we have introduced the Bill to confirm that change. Stamp duty applies to purchases of property or land in England and Northern Ireland, with land transaction taxes devolved to Scotland and Wales. Devolved Administrations will receive Barnett consequentials for that change, in the usual way. The Bill will increase the nil rate threshold, which is the level at which stamp duty starts to apply. It will double the threshold at which people start paying stamp duty from £125,000 to £250,000, saving a family purchasing an averagely priced home £2,500.

As I mentioned a moment ago, in 2017 the Government introduced first-time buyer relief, which applied a higher nil rate threshold for purchasers who had never previously owned a property as part of our commitment to supporting first-time buyers. The Bill will expand the generosity of that relief to ensure that those purchasing their first home pay no stamp duty on purchases up to £425,000, up from £300,000. The maximum purchase value for which first-time buyers can claim the relief has also been increased, from £500,000 to £625,000.

These cuts in stamp duty will mean that an estimated 43% of transactions each year will attract no stamp duty whatsoever, up from 25% before the introduction of the Bill. No one purchasing a second home or investing in a buy-to-let property will cease paying stamp duty, as the 3% surcharge on the purchase of additional dwellings will continue to apply. More than half all transactions in the east midlands, the north-west and Yorkshire and the Humber will attract no stamp duty at all, with about six in ten transactions in the north-east having no stamp duty liability.

We are lifting significant numbers of families, first-time buyers and home movers out of stamp duty, helping those aspiring to own their own home. That means that a couple buying an average home in the east midlands worth about £248,000 would otherwise have paid nearly £2,500 in stamp duty, but will now pay nothing at all. This measure will directly help people to keep more of their hard-earned money. An estimated 90% of those claiming first-time buyer relief will now be lifted out of stamp duty entirely. First-time buyers are able to access up to £8,750 in relief following the Government’s changes.

I should make it clear that these changes apply to stamp duty land tax, which covers only England and Northern Ireland, but they also mean—through the usual block grant adjustment—an additional £100 million for the devolved Administrations in Scotland and Wales.

The United Kingdom has always been a nation of homeowners, and under our plans it will continue to be so. We are cutting stamp duty for hard-working people and supporting them in getting on to and up the housing ladder. The Bill will reduce the up-front costs of moving, it will support the hundreds of thousands of jobs reliant on a healthy property market and it will help give people who aspire to home ownership the means to make it a reality. For those reasons, I commend the Bill to the House.

Vehicle Taxation Reform

Felicity Buchan Excerpts

Wednesday 19th October 2022 Westminster Hall

[The Exchequer Secretary to the Treasury (Felicity Buchan)]

It is a pleasure to serve under your chairmanship, Sir George, on my first outing as a Treasury Minister in Westminster Hall. I will begin by congratulating the hon. Member for Bath (Wera Hobhouse) and thanking her for securing this important debate on vehicle taxation. As today’s discussion has demonstrated, it is a highly topical issue.

These taxes bring in some £35.5 billion to the Exchequer every year—money that is essential to fund high quality public services. That sum is worth about 4.3% of our total tax take, so it is critical. As the hon. Member for Bath said, the taxes have a crucial role to play in our transition to net zero, to which this Government are absolutely committed. Vehicle taxation and its future are a matter of great public interest. Road vehicles in Great Britain covered almost 300 billion miles in 2021, underscoring our need to maintain high-quality infrastructure while minimising emissions. As we transition to net zero, it is vital that we also consider how we continue to pay for our roads, as well as our schools, hospitals and armed forces.

Let me begin to outline the background by exploring the present system of vehicle taxation. We have two main vehicle taxes in this country: fuel duty and vehicle excise duty. Fuel duty is currently the largest yielding excise regime, raising £26 billion in 2021-22. Vehicle excise duty, or road tax as it is sometimes known, is worth a further £7 billion a year. Altogether, those revenues equate to just under 40% of the total education budget for this entire financial year, as we have an Education Minister, my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), present in the Chamber.

We also have other smaller taxes, most notably company car tax, which raises some £2.5 billion a year. That tax applies when a car is made available to an employee for private purposes, since that represents a taxable non-cash benefit. The funds raised from all those taxes contribute to both road maintenance and the resourcing of other vital public services. The Government have refined those taxes both to help families and businesses navigate cost of living pressures and to support our net zero ambitions.

At spring statement 2022, the Government announced a temporary 12-month cut of 5p to fuel duty on petrol and diesel, worth £2.4 billion. That is the largest ever cash-terms cut to fuel duty. Perhaps I can use this opportunity to address a few points made by the hon. Member for Tiverton and Honiton (Richard Foord). First, we asked the Competitions and Markets Authority to undertake an urgent review of the market for road fuel. Its findings suggest that the fuel duty cut was largely passed through, but Government have asked it to do a fuller market study on the supply of road fuel, and Government will react to those conclusions.

I draw the hon. Member’s attention to the rural fuel duty relief scheme, which gives support to motorists by compensating fuel retailers in some select rural areas that meet certain criteria. If they qualify, there is a 5p per litre reduction for the retailers. We have also adapted those taxes to incentivise take-up of electric vehicles. Road transport accounts for a massive 24% of UK carbon emissions, so reducing those emissions is essential to the UK’s transition to net zero.

Industry statistics suggest that more than 1 million battery and plug-in hybrid electric vehicles are now registered in the UK, which is a huge success, but we need to go further and faster. To support that, we will introduce a ZEV mandate in 2024, and end the sale of petrol and diesel-powered vehicles by 2030 and of hybrid vehicles by 2035. At that point, all vehicles sold will be zero emission. In all, the Government have committed £2.5 billion since 2020 to support the transition to electric vehicles, with targeted funding to offset the higher up-front costs and to accelerate the roll-out of charge point infrastructure. That includes £500 million to support local charge point provision, £950 million to support rapid charging on motorways and major A roads, and funding for charge points in homes and businesses.

In addition to those measures, the Government also use the vehicle tax system to incentivise the take-up of vehicles with lower carbon emissions. In 2017, the Government introduced a reformed vehicle excise duty system for new cars. Under that system, zero emission models pay nothing on first registration, while the most polluting pay more than £2,000. In subsequent years most cars move to a standard rate, currently set at £165 per year; meanwhile, zero emission vehicles pay nothing, either on first registration or subsequently. Company car tax, too, is adapted to the pursuit of net zero, and it has been effective in incentivising the uptake of electric vehicles and ultra-low emission vehicles. Company cars comprise a significant proportion of electric vehicles and ultra-low emission vehicles on the road today. Those cars will filter through to the second-hand market, increasing the supply of used electric vehicles and making the transition more affordable for consumers.

I will move on to the future of motoring taxes. I start by paying tribute to my hon. Friend the Member for Bexhill and Battle (Huw Merriman) who, as Chair of the Transport Committee, has done a lot of work on that topic. As more road users switch to electric vehicles, tax receipts from fuel duty and vehicle excise duty will decrease if the present system remains unchanged. The net zero review indicates that tax receipts from fossil fuel-related activity will eventually trend towards zero. Revenue from fuel duty is projected to decline from 1.2% of GDP in the middle of the decade to 0.2% by the 2040s, and revenues from vehicle excise duty will also fall. The Government are committed to ensuring that revenue from vehicle taxes keeps pace with that change, with taxation simultaneously remaining affordable for consumers. That will ensure that we can continue to fund the public services and infrastructure that people and families across the UK expect. In considering how to replace those lost tax revenues, the Government will also consider the secondary impacts of existing vehicle taxes, not least in reducing road congestion.

[Wera Hobhouse]

Does the Minister agree that the principle of all new taxation has to be that we disincentivise people from using their cars and incentivise more use of public transport? Ultimately, that is the most sustainable way to go forward.

[Felicity Buchan]

I am sure the hon. Lady will recognise that we have a medium-term fiscal plan coming up in about 10 days, and at this stage we will not commit to anything ahead of that plan.

I conclude by thanking the hon. Member for Bath for the opportunity to have a fruitful discussion about vehicle taxation. We are all aware of how important the issue is, given the fact that motoring taxes account for 4.3% of total tax take and £35 billion—a significant sum. We are also all aware that our constituents have a strong interest in any changes to vehicle taxation. I welcome the widespread support that hon. Members have expressed for using vehicle taxation to facilitate our transition to net zero, and I am grateful that so many hon. Members appreciate the need to reform vehicle taxation to maintain tax receipts while achieving net zero. We will listen to our constituents and to hon. Members as we continue to refine vehicle taxation and adapt it to the Britain of net zero, economic growth and fiscal responsibility.

Question put and agreed to.

Oral Answers to Questions

Felicity Buchan Excerpts

Tuesday 11th October 2022 Commons Chamber

[Judith Cummins (Bradford South) (Lab)]

17. What fiscal steps his Department is taking to support levelling up.

[The Exchequer Secretary to the Treasury (Felicity Buchan)]

It is a pleasure to answer my first question at the Dispatch Box, and to reply to the hon. Member for Barnsley Central (Dan Jarvis), who responded to my maiden speech.

The White Paper “Levelling Up the United Kingdom” set out a clear plan to level up every corner of the UK by 2030. We are also driving growth and unlocking housing across the UK with our new investment zones, and we are continuing to invest billions in regional infrastructure. That includes £1.7 billion allocated under the levelling-up fund, of which £500 million went to the north.

[Dan Jarvis]

It is a pleasure to see the Minister at the Dispatch Box, and I congratulate her on her appointment.

Previous Chancellors have not delivered the level of transformative resource required for levelling up. I know that the present Chancellor understands the huge potential that exists throughout the north of England, but it seems to many of us that the levelling-up agenda is sipping in the last chance saloon. Can the Minister say what will be done differently under this new Chancellor?

[Felicity Buchan]

We are absolutely committed to the levelling-up agenda. South Yorkshire received £570 million through the regional cities transport scheme, £95 million through the levelling-up fund and £46 million through the shared prosperity fund, and our ambitions for levelling up continue.

[Judith Cummins]

Building on Bradford’s city of culture win and in a momentous year for Rugby League, I am supporting the plan for the transformation and regeneration of the home of the Bradford Bulls, the iconic Odsal stadium, to become a world-class sports, music and culture arena. This plan would be an incubator for the ambitions of the entire Bradford district, delivering more than £1 billion of socioeconomic benefits. Following the Bank of England’s repeated interventions, can the Minister confirm that round 2 of the levelling-up fund will still be going ahead in full, and will she and the Chancellor demonstrate that by meeting me, Bradford Council, the Bradford Bulls and the Rugby Football League to discuss our catalyst for growth?

[Felicity Buchan]

I can confirm that we will be going ahead with the second round of the levelling-up fund. There should be decisions by the end of the year, and I wish the hon. Lady well with her bid. An independent assessment of the bids is going on at the moment, but if that meeting is possible, we will do it. Clearly we would need to decide if that was appropriate. I congratulate her on her success in the first round of the levelling-up bids, where she got £20 million for the Squire Lane leisure centre.

[Martin Vickers (Cleethorpes) (Con)]

The renewable energy sector is vital to my constituency and the neighbouring area, and it has done a great deal to level up the local economy. Can the Minister give me an assurance that support for the sector will continue?

[Felicity Buchan]

We are very much committed to the sector, and I would be delighted to sit down with my hon. Friend to discuss this further.

[Mark Pawsey (Rugby) (Con)]

A key part of levelling up is the creation of investment zones, and the Chancellor will be aware of the proposals for a gigafactory at Coventry airport to support UK automotive manufacturing. Does the Minister agree that the joint application by the Labour Coventry City Council and the Conservative Warwickshire County Council for an investment zone at Coventry airport should be encouraged?

[Felicity Buchan]

We are encouraging all higher and local authorities to look at the investment zones and to apply. I think they are a great tool for development, so I would absolutely encourage that application.

[Pete Wishart (Perth and North Perthshire) (SNP)]

“Never has so much chaos been inflicted on so many by so few” will be the motto that will reverberate down the eons from this Government. Do they actually still believe in this fairy tale of levelling up? Is it not now just a matter of how far they are going to level us all down?

[Felicity Buchan]

Everything we are doing is being driven by a growth agenda so that we can level up all the way across the United Kingdom.

[David Morris (Morecambe and Lunesdale) (Con)]

The Eden Project North is, as far as I am aware, the only project in the second phase of the levelling-up round that has planning permission and land allocated. I would like to know when the decisions will be made so that we can get this shovel-ready scheme going. Eden has £50 million to put on the table, and we are asking for £50 million as match funding, in effect.

[Felicity Buchan]

Decisions on the second phase of the levelling-up round will be made by the end of the year, and I wish my hon. Friend well.

[David Linden (Glasgow East) (SNP)]

13. What recent discussions he has had with the Secretary of State for Work and Pensions on the potential effect of inflation on that Department’s budget.

--- Later in debate ---

[Christian Matheson (City of Chester) (Lab)]

The upkeep of the Chester city walls costs about £600,000 a year, but that money has to come out of the local authority’s highways budget. Can the Government set aside a small amount of money to help local authorities with the stewardship of internationally important heritage assets?

[The Exchequer Secretary to the Treasury (Felicity Buchan)]

The Government continue to support the heritage and cultural sector. There are several sources of funding from Government arm’s length bodies such as the National Lottery Heritage Fund and Historic England’s repair grants, so I encourage the hon. Gentleman to look into those.

[Paul Holmes (Eastleigh) (Con)]

Since the 1970s, residents in Eastleigh have long been expecting, and have been promised at times, funding for the Chickenhall Lane bypass, including being allocated funding in the 2015 Red Book. Will the Minister agree to meet me and Hampshire County Council to discuss getting this sorted for people who have simply waited far too long?

Oral Answers to Questions

Felicity Buchan Excerpts

Tuesday 28th June 2022 Commons Chamber

[Mr Simon Clarke]

Of course, we invested £1.6 billion in local authorities in each year of the spending review precisely to help them with all the responsibilities that they must discharge. I would say to all Departments and devolved Administrations that, if we are to live within the spending review, it is vital that they make responsible choices about how to deliver services at best value to the taxpayer. We cannot be in a situation where we chase after inflationary pressures as that will only worsen and prolong the crisis that we face.

[Felicity Buchan (Kensington) (Con)]

T9. My constituents want to see a low-tax, high-growth economy where work and productivity are prioritised and incentivised. Will my right hon. and learned Friend assure me that the next move in taxes will be downwards and that that will happen at the first available opportunity?

[Lucy Frazer]

The Chancellor set out at the spring statement that he would be cutting taxes. We have seen that already in the universal credit taper rate and in the increase in the national insurance contributions threshold to £12,570, which will come in just a few weeks. We have also seen the announcement that income taxes will be cut in 2024.

Oral Answers to Questions

Felicity Buchan Excerpts

Tuesday 17th May 2022 Commons Chamber

The Chancellor of the Exchequer was asked—

[Felicity Buchan (Kensington) (Con)]

1. What steps his Department is taking to encourage levelling up across the UK.

[Ben Bradley (Mansfield) (Con)]

2. What steps his Department is taking to encourage levelling up across the UK.

--- Later in debate ---

[The Chief Secretary to the Treasury (Mr Simon Clarke)]

The levelling-up White Paper sets out a clear plan to level up every corner of the United Kingdom, including a mission to increase productivity and improve living standards in every part of the UK by 2030. We will do this through the record funding allocated in the 2021 spending review, including £1.6 billion for the next generation of the British Business Bank’s regional investment funds. That sits alongside significant investment in communities through the £4.8 billion levelling-up fund, and giving local areas a greater say in investment, working in partnership with the Government through the £2.6 billion UK shared prosperity fund.

[Felicity Buchan]

Parts of our inner cities suffer deprivation, including in my constituency in north Kensington. Does my right hon. Friend agree that levelling up is about bringing forward all our left-behind communities, whether inner cities, coastal communities or the north, and, I add rather cheekily, will he support my levelling-up fund bid for step-free access to Ladbroke Grove tube station?

[Mr Clarke]

I thank my hon. Friend for her question; she is an outstanding champion for Kensington and, as she rightly says, it is not the case, as is sometimes portrayed, that the levelling-up fund does not have real importance for London and the south-east because, as we know, there are pockets of deprivation across this country and it is vital that we address them. Over £200 million was allocated in the first round of the levelling-up fund for London and the south-east, and clearly my hon. Friend’s council may wish to consider making a bid for the fund’s next iteration when that opens.

Financial Statement

Felicity Buchan Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

As I have said, for those who are most vulnerable we are providing an extra half a billion pounds, and we are doubling the size of the household fund—local authorities are best placed to direct that funding. But we do want to support people into work, which is why I am proud of the record we have.

[Felicity Buchan (Kensington) (Con)]

I warmly welcome the tax cuts announced today, especially with the focus on low and middle earners. I note that the OBR has said today that interest payments on debt will quadruple next year. Does my right hon. Friend agree that with interest payments on our debt at £80 billion we need to maintain discipline on spending going forward?

[Rishi Sunak]

My hon. Friend makes an excellent point. She is absolutely right; the increase in debt payments is historic and it gives a glimpse of some of the risks facing us going forward. That is why it is right that we maintain headroom against our fiscal rules, and the best way to do that, in order to deliver a lower-tax economy, is to remain very disciplined on further public spending.

Oral Answers to Questions

Felicity Buchan Excerpts

Tuesday 15th March 2022 Commons Chamber

[The Economic Secretary to the Treasury (John Glen)]

He is not doing that. The schemes were set up in various ways, depending on the size of businesses, and it will be for the individuals who borrowed money to engage with the lenders to refinance those loans on a case-by-case basis.

[Felicity Buchan (Kensington) (Con)]

T9.   People in my constituency who live in mansion blocks where heating is paid for centrally do not currently benefit from the energy price cap. That is clearly an anomaly. Will my hon. Friend meet me to discuss ways in which we might ameliorate the situation?

[Helen Whately]

My hon. Friend has made an important point. We recognise that some people living in mansion blocks are part of a heat network and are not covered by the price cap. I draw my hon. Friend’s attention to the £144 million in discretional funding that went to councils as part of the recent £9 billion energy support package, and to forthcoming legislation in which we will give Ofgem new powers to regulate prices in the sector as a matter of priority.

Financial Services: UK Economy

Felicity Buchan Excerpts

Thursday 9th December 2021 Commons Chamber

[Anthony Browne]

I agree. I support having a secondary objective of international competitiveness and growth. A regulator could decide on policy A or policy B and, from a UK perspective, it could make no difference in terms of consumer protection or prudential stability, but one could mean that we were more able to compete internationally. We asked the chief executive and chair of the Financial Conduct Authority about this in the Treasury Committee yesterday and they went through the details on how that might affect their thinking. But we absolutely must not lose sight of prudential stability. We have had a crisis once and we do not want it again.

We must maintain our support for innovation in financial services, as long as it brings real consumer and economic benefits. We must ensure that the fintech sector thrives. Creating a digital identity ecosystem, which the Government are looking at, will certainly help. As cryptocurrencies grow, it is inevitable that they will need some form of regulation to protect consumers, but it must be done in a proportionate way that focuses on tackling any harms. It is absolutely right that the Bank of England is exploring central bank digital currencies. We do not know whether retail customers want direct access to central bank funding, but it is absolutely right that we try to find out.

Finally, I want to cast our eyes across the world, and look at international partnerships. We are no longer part of the EU, and we do not know what our future relationship with it will be. As I said earlier, I consider any memorandum of understanding as a “nice to have” rather than a “must have”, and it certainly must not shackle the UK’s new regulatory regime. Any partnership would require both sides to agree it, and there seems little political desire for that at the moment on the other side of the channel. Rather, UK-based banks are worried that the EU is considering ways deliberately to make it more difficult to offer services to their EU-based clients, and we have to keep an eye out for that. That makes it all the more important that the UK forms meaningful partnerships with other international financial centres. I have long advocated a close financial services partnership between the UK and Switzerland, a major financial centre. We share a common approach, a global outlook and pragmatism.

[Felicity Buchan (Kensington) (Con)]

Will my hon. Friend give way?

[Anthony Browne]

I am happy to give way to my hon. Friend and current member of the Treasury Committee.

[Felicity Buchan]

Does my hon. Friend agree that given their importance to our economy, both in London and throughout the country, we need to ensure that financial services are at the front when we are negotiating trade deals and market access with other countries?

[Anthony Browne]

I very much agree. I was coming to this point. If we can get those elements into trade agreements, we should aspire to do that. However, often, regulatory agreements between regulators are more appropriate.

Budget Resolutions

Felicity Buchan Excerpts

Wednesday 27th October 2021 Commons Chamber

[Felicity Buchan (Kensington) (Con)]

I warmly welcome this positive, optimistic Budget, which puts post-pandemic economic recovery at the heart of what we do. We currently have the fastest-growing economy in the G7. The OBR has predicted 6.5% growth, although looking at recent statistics, I think it could be higher. Next year, we are looking at 6% growth. That is very strong. We are also looking at employment getting back to pre-pandemic levels, and at wages going up.

But more important than my welcoming the Budget is the fact that the markets have welcomed it. Gilts have rallied substantially this afternoon. Ten-year gilt yields have gone down 10 basis points, or 0.1%. This is relevant to all of us because, as the Chancellor said in his Budget, 100 basis points, or 1%, means either a cost of £23 billion or a reduction of £23 billion, depending on which way yields go. That is a real endorsement by the gilt markets of what we have done today. It is telling that the Debt Management Office has said today that our anticipated sale of gilts will be down £57.8 billion, relative to what we thought we had to do at the beginning of the year. That is huge—we have almost £60 billion less debt that we have to go into the markets to sell.

I also welcome the Chancellor’s statement at the end of his speech that the direction of travel was to lower taxes. I feel very strongly that, while we have had to do some things because of the exceptional circumstances of coronavirus, in the long term we need to be a low-tax economy. It is with lower taxes that we encourage growth and get more investment, which leads to greater productivity, which is key.

As many colleagues have said, we are clearly investing an awful lot in public services at the moment, and it is good that we are providing that investment. However, I say to my colleagues on the Front Bench that we must ensure that we get value for money from that expenditure. Let us account for every pound of it, because the numbers are substantial. Many people have alluded to inflation, and inflation is forecast to go up, peaking at 4.4% according to the OBR forecasts. As far as that concerns wages, of course we want people to be well paid. We want a well-paid economy and well-paid workers, but let us ensure that we also get the skills and the productivity improvements in place.

This is a great Budget. I am conscious of the time, but I would like to talk briefly about a few issues in my constituency. First, I warmly welcome the tapering for universal credit, a strong development which goes to the Conservative ethos of ensuring that work pays. I am also glad to see that we have made progress on the residential property development tax. Grenfell Tower is in my constituency, so I am glad to see there has been progress, but I am conscious that we are still awaiting further details on 11 to 18 metres.

Although bank corporation tax rates will go up, we have reduced the surcharge, which I am glad to see. I object to the attitude of some Opposition Members who are so negative to financial services. I remind everyone that financial services are critical to our economy.

[The Chief Secretary to the Treasury (Mr Simon Clarke)]

They are worth £76 billion.

[Felicity Buchan]

I believe that is 11% of our total tax take. This is an issue not just for London but for Edinburgh, Glasgow, Newcastle, Leeds, Bristol and Chelmsford. Financial services are critical, so let us not talk them down, as that would be equivalent to California talking down the film industry. Financial services are a huge source of our exports.

Finally, I welcome the £7 billion-worth of measures on business rates. These are short-term measures. I welcome them but, as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) has just said, we need a longer-term solution. I would like to work with my Front-Bench colleagues on finding that solution.

One small technicality: the 50% discount for hospitality will be capped at £110,000. I represent a central London constituency with a lot of retail and hospitality. Central London has suffered about the most in the country, but many of my businesses will get very little help on a percentage basis. I would appreciate a conversation on that point.

This is a very strong Budget. The economy is faring well. We have alluded to some risks, but we can all get behind this Budget, which is good for the country and good for Kensington.

Finance (No. 2) Bill

Felicity Buchan Excerpts

Committee stage & Committee of the Whole House (Day 2)
Tuesday 20th April 2021 Commons Chamber

[The Temporary Chair]

We will move on to Felicity Buchan.

[Felicity Buchan (Kensington) (Con)]

I speak in support of the Bill and against the amendment. The stamp duty holiday has been an unequivocal success in stimulating the market, and I welcome its extension. Many of my constituents will also welcome the surcharge for non-UK residents. In my constituency, many foreign investors buy flats and houses as financial investments, and often these lie empty; in effect, they are bank balances in the sky. This has real implications for my constituency. It leads to hollowed-out communities, and it makes it very difficult for shops, restaurants and businesses to be viable.

I welcome this Government’s focus on house building. Last year, we built 243,000 houses. That is the most in 33 years. For so many of my constituents, buying a house is almost an unobtainable dream. We need to build more houses, and we need to build more affordable housing. That is especially the case in London, where the Labour Mayor’s record of building housing has been lamentable. In 2016, he was given a budget of £4.62 billion to build 116,000 houses. How many had he done by December? Only 56,000—less than half. It is lamentable.

I also welcome the Government’s new measures on guaranteeing mortgages up to 95%. Again, this will help my young constituents and key workers to get on to the housing ladder. In my borough of Kensington and Chelsea, we have so many private renters. Some 44% of my constituents are private renters, because people cannot afford to get on to the housing ladder. Rent is a huge proportion of my constituents’ incomes. Rent is 26% of the median average income nationally. In my constituency, it is a whopping 75%, so I welcome all the support to get young people in my constituency on to the housing ladder.

I support the measures in the Bill, but like my hon. Friend the Member for Orpington (Gareth Bacon), I encourage Government to be more radical when it comes to stamp duty and to make a fundamental reform. Stamp duty is essentially a tax on social mobility. It prevents people from moving closer to new work opportunities. It prevents young and growing families from moving from one to two-bedroom flats to bigger family houses. It prevents older people from downsizing.

In my constituency, it has led to very perverse consequences. People cannot afford to move, so they start extending their houses. That has led to an onslaught of basement developments. One house in my street went down an extra three storeys below the lower ground floor. That has now been banned by my council, but this causes undue distress to my constituents and intolerable noise and disruption that goes on for prolonged periods. We have to make it easier for people to move.