Oral Answers to Questions

John Stevenson Excerpts

Tuesday 1st October 2019 Commons Chamber

[Sajid Javid]

We do not know that at all. That is just scaremongering from the Scottish National party. We know that businesses throughout the UK, including in Scotland, want this uncertainty to end and want us to leave on 31 October.

[John Stevenson (Carlisle) (Con)]

Does the Chancellor agree that if we were to leave with no deal, there could be a potential economic impact on our European partners and that therefore it is as much in the EU’s interests to reach a deal as it is in ours?

[Sajid Javid]

My hon. Friend has made an important point: it is in everyone’s interests—ours and our European friends and partners—that we reach a deal. Intensive negotiations are going on, both with the Irish Government and with other European partners, and there is a very strong recognition that it is in all our interests that we reach a deal.

Spending Round 2019

John Stevenson Excerpts

Wednesday 4th September 2019 Commons Chamber

[Sajid Javid]

Let me first say gently to the hon. Lady that this is a spending round. I have not referred to it as a spending review. As she may know, a spending review normally covers a number of years, whereas a spending round covers a single year. She said that I had not “dignified” it with an OBR forecast. No spending review or spending round comes with an OBR forecast; that is normally the case with a Budget, and there are two forecasts a year. I thought that she might already know that, but I am happy to let her know now. She also talked about the funding of sectors such as social care and youth services. I did refer to those: I set out plans for next year, but also plans for the future involving, for example, the new youth investment fund.

[John Stevenson (Carlisle) (Con)]

The Chancellor clearly recognises the importance of growing the economy, because it is through a growing economy that we can afford public services. I understand that, with a view to achieving growth—particularly in the north—there have been discussions about the possible creation of free ports in the north of England. Carlisle Lake District Airport, which is owned by the Stobart Group and which commenced commercial flights recently, has the ambition to create an airport free port. Would the Chancellor support that?

[Sajid Javid]

As my hon. Friend will know, we have accelerated our work on the free ports generally, which is being led by the Trade Secretary and the Chief Secretary to the Treasury. However, I should be happy to consider a proposal for an airport free port.

Spring Statement

John Stevenson Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

While the hon. Gentleman is entitled to his point of view and often makes a valuable contribution to the debate, he has to be careful that he does not accidentally veer off-piste into “talking Britain down” syndrome. He talks about a collapse in business investment, but I hope he would agree that this is likely to be a cyclical reduction in business investment. If he talks to businesses, they will tell him that they are postponing investment decisions until they have greater clarity about the future. I agree; we cannot keep them hanging there forever. We need to give them clarity and certainty as quickly as possible. I believe we will do that in this House over the next few weeks, and when we do, I believe that the great majority of that investment—postponed, not cancelled—will flow back into our economy later this year.

[John Stevenson (Carlisle) (Con)]

I am delighted at the Chancellor’s announcement about the borderlands growth deal, which is welcome news for the area. Will he confirm that Departments will move to an early discussion about details of the various projects with the local authority, so that it can get on with implementation as soon as possible? Would he like to visit Carlisle and the borderlands, to see those initiatives in action?

[Mr Hammond]

I can confirm that we want to move ahead as quickly as possible with agreeing the individual projects and getting disbursement under way. I would be delighted to visit Carlisle, to see not only the effects of the borderlands growth deal but the £100 million housing infrastructure fund investment that we are making to facilitate a major expansion of new build housing in the area.

Making Tax Digital

John Stevenson Excerpts

Tuesday 19th February 2019 Commons Chamber

[John Stevenson (Carlisle) (Con)]

I declare an interest as I am a member of a business that has submitted such tax returns. The digital system that we use has many advantages, is beneficial and creates efficiency within the business. I also completely agree with the Government’s desire to streamline the process, which is undoubtedly advantageous, and I agree with the Minister’s comments about there being no penalties.

However, I am aware of some businesses that are oblivious to the requirement and some that will struggle. May I gently suggest to the Minister that HMRC concentrates on larger businesses and gradually moves on to smaller businesses over time, giving smaller companies the maximum length of time to get themselves organised? Does he agree that the implementation period should be extended slightly if need be, but only for smaller businesses?

[Mel Stride]

My hon. Friend is absolutely right to observe that the smallest companies are, almost by definition, likely to find this change more onerous, and I will take his points on board. I certainly reassure him that HMRC will take a light-touch approach to penalties in all cases, particularly those involving small companies. Provided that individuals and businesses are not wilfully trying to avoid or change the amount of VAT that is due, we will take a proportionate and light-touch approach.

Oral Answers to Questions

John Stevenson Excerpts

Tuesday 29th January 2019 Commons Chamber

[Elizabeth Truss]

It is important that we keep no deal on the table to get a better deal from the EU. I strongly encourage the hon. Gentleman to support our deal as the best way to take no deal off the table.

[John Stevenson (Carlisle) (Con)]

Quite clearly, the Union of the UK is vital to the prosperity of Scotland and the border area. Does the Chief Secretary to the Treasury agree that Government initiatives, such as the borderlands growth initiative, also make a vital contribution to the prosperity and success of the region?

[Elizabeth Truss]

My hon. Friend makes a good point. The borderlands deal is an important way of stimulating growth across the border area, although it would also help if the Scottish National party Government followed through in Scotland on things such as the tax cuts we have introduced elsewhere in the UK.

Oral Answers to Questions

John Stevenson Excerpts

Tuesday 11th December 2018 Commons Chamber

[Mel Stride]

The best deal for the country, and indeed for Scotland, is the one that the Prime Minister has brought forward, and which she is now looking at with our European partners in Brussels: one that sees a free trade area right at the heart of our arrangements; that has no tariffs between ourselves and the EU27; that gives us control of our borders; that makes sure we put an end to sending vast sums of money to the European Union; that gives us control of our laws; and that enables us to conduct our own international trade affairs.

[John Stevenson (Carlisle) (Con)]

Does the Minister agree that what is of equal importance are the economic relationships within the UK, and that initiatives such as the borderlands growth initiative are a priority for the people of the borderlands region?

[Mel Stride]

My hon. Friend is entirely right. That is why in the last Budget, Scotland benefited from £950 million in additional Barnett funding, and why we are investing £1 billion in up to six new city deals, including in the borderlands area—some of those deals have been concluded and some are under discussion.

Oral Answers to Questions

John Stevenson Excerpts

Tuesday 6th November 2018 Commons Chamber

[Mr Hammond]

As the right hon. Gentleman will know, we have launched a significant initiative for the FE sector with the Government’s new T-level programme, which is being rolled out over the next few years. The programme involves a funding commitment of an additional £500 million a year to increase contact time between learners and teachers or work environments by 50%.

[John Stevenson (Carlisle) (Con)]

Education at all levels clearly matters for our economy and our country. Financing education properly is important, and I will be taking a keen interest during the spending review. However, does the Chancellor agree that money is not everything and that good teaching and well-managed schools are of equal importance?

[Mr Hammond]

Of course. My hon. Friend is absolutely right. They say, don’t they, that no one ever forgets a good teacher? This is about excellence in teaching and in the leadership of our schools, and a well-resourced system led by excellent leaders and staffed by brilliant teachers is the best guarantee of Britain’s bright future.

Spring Statement

John Stevenson Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

The payment profile has three parts. There are payments during the two years—more or less—of the implementation period; there are payments as the EU dispenses the so-called reste à liquider over the following few years; and then there is a very long tail of what will actually be very small payments relating to pensions. Of course, by their nature, they will stretch over a very long period, but they are very small amounts of money.

[John Stevenson (Carlisle) (Con)]

Carlisle Lake District airport is about to open for passenger flights; we have a garden village development south of the city; and there is the prospect of a borderlands growth deal. Does the Chancellor agree that the only way to grow the economy and balance the books is through such investments? Does he also agree that it is important for the Government to support local initiatives of that kind, because they will help to rebalance the economy and sort out our finances?

[Mr Hammond]

Yes. Local government, local people and local businesses understand best how to grow the economies of their regions. I welcome the initiatives that my hon. Friend has mentioned. I am aware of the garden village, and I look forward to perhaps being able to visit it in the spring.

Oral Answers to Questions

John Stevenson Excerpts

Tuesday 27th February 2018 Commons Chamber

[Elizabeth Truss]

We have provided local councils with council tax flexibilities to enable them to fund spending in their areas. It is absolutely right that councils should not waste money and should find savings. The fact is that we went through an incredibly profligate period under Labour in which the Government were running record deficits, and we have succeeded in reducing the deficit by three quarters. I must also point out to the hon. Gentleman that councils have reserves of £23 billion. In fact, those reserves have increased by £8 billion since 2010.

[John Stevenson (Carlisle) (Con)]

In Cumbria, the Labour council leaders failed to reach a devolution settlement with the Government that would have brought in additional resource. Does the Minister agree, however, that this is not just about resource and that it is also about council structures, leadership and creating efficient organisations?

[Elizabeth Truss]

My hon. Friend is absolutely right. Lots of councils have done things better and more efficiently, and have led the way across government. We have given more powers to local Mayors, and we are giving Mayors across the country £4.8 billion of new investment over the next 30 years.

Stamp Duty Reform

John Stevenson Excerpts

Tuesday 23rd January 2018 Westminster Hall

[John Stevenson (Carlisle) (Con)]

I beg to move,

That this House has considered reform of stamp duty.

I am delighted to serve under your chairmanship, Mr Streeter, and to have secured the opportunity for the House to debate and discuss stamp duty and its possible reform. I will be speaking in this debate as a politician, but also partly as a practitioner—I am a solicitor who is still in practice. I do not think I have to declare an interest, but I nevertheless think it important that it is on the record.

As everyone knows, property is a huge issue in this country. We like to think of ourselves as a property-owning democracy, and it has certainly been the long-standing ambition of the Conservative party that we see our country as a property-owning democracy, but we should not forget the significant private rented sector, which represents around 20% of the market. It is important to acknowledge the part that it and social housing play in the mix. In many respects, the key issue in housing policy is to get the mix between property ownership, the private rented sector and social housing right.

The other big issue in housing is supply, and in many respects that could be a debate in itself. That issue is clearly of concern to the Government. In my view, we should be looking for a national housing framework with a more flexible local policy. I can give a very simple example: the Carlisle housing market is different from the Lake District housing market, which is different from the Manchester and London housing markets. I acknowledge that is very much a separate debate.

Another issue is property taxes. That is extremely important, especially for public policy. Property taxes are very much part of our tax system. Council tax raises £32 billion a year. Business rates raise £30 billion. Capital gains tax raises £9 billion, and a lot of that is on property. Inheritance tax, much of which goes on property, raises £5 billion. We also have VAT on improvements, income tax on rental income and stamp duty land tax, which raises £13 billion. A huge amount of money is raised from property taxes, and in many respects I understand that—most Governments quite like property taxes, because it is difficult to hide a property.

What is the purpose of ownership? Why is it a good thing? In many respects, it creates the ambition and aspiration of many people to own their own home. They feel they have an investment. It is also a way for many people to save. It gives them a stake in society—they feel they own something and can take responsibility for it. In a survey, the Yorkshire Building Society found that 71% of young adults say that owning their own house makes them feel grown up. It is about ownership and feeling responsible.

Home ownership is a positive thing for the individual and society in general. We must recognise, however, that not everyone will own their own home, so the mix of properties between social housing, the private rented sector and so on is extremely important. We also need to remember that older property owners like to think of property as something they can pass on to their children. They have worked hard throughout their lives. It is an asset that they have enjoyed, but they want the benefit to pass to the next generation. Ownership is beneficial at so many different levels.

What is the purpose of this debate? In many respects, it is about just one element of the property debate. First, I want to look at the reforms to our present system of stamp duty. As an aside, I have a proposal to close a potential tax evasion issue and raise additional tax. I will be interested in the Minister’s response on both those things.

Today, as in the past, the buyer of a property has responsibility for paying stamp duty. They have to pay that tax. Stamp duty is effectively a buyer’s tax. My proposal is simple: change the tax to a sales transaction tax, so that the responsibility for paying stamp duty transfers from the buyer to the seller. I appreciate that that proposal also touches on tax rates, but I want to leave that aside. Each Chancellor has to decide tax rates on an annual basis. My purpose concerns the fundamental principle of who pays the tax.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I congratulate the hon. Gentleman on introducing the debate; he has a lot of experience in these matters. Most people understand that the problems with the housing market are on the supply side, not the demand side. We need to build and deliver more homes. Would it not be a disincentive for people to put their houses on the market if we effectively charge them to sell those houses?

[John Stevenson]

I am grateful for my hon. Friend’s intervention, and accept that we probably have a slightly different view on this subject. I fully accept that the supply of housing is a fundamental problem in our housing market. As I said earlier, that could be seen as a separate debate. For the purpose of today’s debate, I believe that shifting the responsibility for the tax from the buyer to the seller would be beneficial, and hopefully I will explain why.

From the Treasury’s perspective, other than that it would be a change of regime, it is tax-neutral; effectively it would make no difference to the amount of tax that the Treasury raises. I therefore think that the Treasury must look at the issue from a different perspective: is this beneficial to the housing market and to the people who are buying or selling the property? I believe that it will help first-time buyers and give support to those moving up the property ladder. Potentially, it will improve the housing market overall. I emphasise that this is not just the proposal of a random MP; it has a lot of support from the industry, and in particular the Yorkshire Building Society, with which I have had many discussions on this issue.

First, let us take first-time buyers. The changes in the Budget were undoubtedly extremely welcome. The Budget helped a large number of first-time buyers, taking many of them out of the tax regime. That is of course welcome, but there was a cost to it, which I think is reckoned to be in the region of £600 million. There are also some practical issues, such as how we identify who is a first-time buyer and make sure that the correct person is claiming the relief.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

The Office for Budget Responsibility says that the changes that came through will cost £3.2 billion, with an estimate that around £150,000 will be spent on every additional first-time buyer under the programme. Those are the OBR’s figures, and that change by the Tory Government will be particularly useless without the supply side. Does the hon. Gentleman’s proposal for the tax to be on the seller’s side have any benefit, beyond the loss of income that the Government are now facing, with no real benefit to first-time buyers?

[John Stevenson]

I am saying that moving the liability from buyer to seller should be neutral to the Treasury. It is up to the Treasury what level of rates it applies, and that changes over time. I did not want to go down that route; I was looking more at the principle of who pays the tax.

If we do move it, it will mean that all first-time buyers will not have to pay any tax at all. It will be very simple to understand who is a first-time buyer. At present, first-time buyers have to find a deposit, the costs and the stamp duty, even though the mortgage only covers the purchase price. The change would therefore help first-time buyers, because they would not have to look for money to pay the stamp duty land tax. If there were a small increase in the price, that would be covered by the mortgage. Interestingly enough, according to a Yorkshire Building Society survey, 44% of first-time buyers say that saving up for the required deposit and stamp duty is very challenging.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate my hon. Friend on introducing today’s debate. He is making a very considered speech and suggesting a practical solution to a very real problem. In that context, does he agree that with so many people in the private rented sector—20% of the housing market— saving for a deposit is a major issue for many working families, who are currently paying rent, or indeed a mortgage, and want to upsize their property? That is why this scheme has some merit.

[John Stevenson]

My hon. Friend is absolutely right: it is saving up for the deposit that is so challenging for many young people nowadays. Added to that are the solicitors’ costs and the stamp duty costs, which can sometimes make it too difficult for first-time buyers to raise the adequate amount. Incorporating that into the mortgage would be much better, from the purchaser’s perspective. One of the important points that the Yorkshire Building Society makes is that the mortgage would cover the costs if there were a small increase in the price of the property.

[Melanie Onn (Great Grimsby) (Lab)]

I congratulate the hon. Gentleman on securing the debate. I just seek some clarity about what level of cost of home the stamp duty relief, transferring to the seller from the buyer, would operate on, in the light of the Government’s stamp duty relief for first-time buyers. At what price range will that start to support the first-time buyers he is talking about at the moment?

[John Stevenson]

The hon. Lady is absolutely right: the changes that the Government introduced undoubtedly helped many first-time buyers. I fully acknowledge that, and they have gone a long way to taking most first-time buyers out of potential stamp duty. There are some practical issues about identifying who is a first-time buyer. What I am suggesting simplifies the process. It takes every first-time buyer out of the tax regime, and I will come on to some of the other benefits that I foresee.

If somebody wants to move up the chain by selling their smaller house and moving on to a bigger house, because they have a growing family or for other reasons, they would benefit quite significantly from the change. They would still have to pay stamp duty, but it would be on only the lower-valued property. The higher-valued property would not be paid for by them. There would be a clear saving for somebody who was moving up the housing ladder. That would help growing families who wanted to move to a larger property.

We now come to the specific question of who pays. As I have suggested, it should be the seller. People often say, “There will be an immediate increase in prices.” I am not convinced about that. I think that the market will adjust naturally. Indeed, when stamp duty was increased by 3% for the purchase of second homes, I do not think that we saw a rigid decline of 3% in house prices. I suspect that the market will adjust and take care of the potential—I believe small—increase.

Overall, I think it will help the market. We have to realise that those who will pay—that is, sellers—are often in a better position to pay the tax. Many of the people who will be selling will have benefited from many years of increasing house prices, so will have sizeable equity in their property and be more capable of dealing with an increase in the price.

[Lloyd Russell-Moyle]

This is a genuine question: is there a danger that the hon. Gentleman’s proposal could disincentivise people who wish to downsize? One of our big problems is people who are currently under-occupying houses, while others are unable to get houses with enough bedrooms. Is there a danger of disincentivising people, or has he thought about a way out?

[John Stevenson]

I take the hon. Gentleman’s point. My view is that if somebody wants to downsize they will probably go ahead, but more importantly the people who are upsizing will get the advantage, and will therefore be interested in the market. I will come to an issue about the housing market, particularly in London at the top end, where I think that the tax regime is causing problems as we speak.

I believe that those who own their property are in a better position to pay the tax when they sell. We also have to look at people who have second homes. They are probably in a much better position to pay the tax because they have an asset that, again, will probably have increased in value. Touching on the hon. Gentleman’s point about individuals and families who are downsizing, quite often properties are sold as part of an estate, when somebody in the family has died. The property probably does not have a mortgage on it, so it will be a windfall for the family. They are therefore in a much stronger position to deal with the payment of that tax.

There are one or two practical issues as well. At present, it is the buyer’s solicitors’ responsibility to pay the tax. I believe that that should continue. Obviously, within the legal profession there would be a mechanism whereby, when the property was sold, they would ensure that they had sufficient money to cover that tax when the property was registered. I also accept that there would have to be a transitional period, because people who have paid tax on a property that they have bought in the last few years would find it a bit hard to subsequently have to pay the stamp duty when they sold the property. I believe that would be manageable. There would be no great change to procedure, it would be effective and I do not think it would affect the market significantly.

What it would do is to improve the market of first-time buyers for those moving up the chain. If we look at the very top end of the market, there seems to be a problem now in London, where very expensive properties are struggling to be sold. Quite often, that is because buyers are unwilling to pay the very high stamp duty required. Changing the rules means there is a possibility of freeing up the top end of the market to some extent, because the seller who wants to get rid of the property would be able to pay the tax, which might encourage the buyer into the market to pay the very high prices.

Another small additional benefit that I would like to raise with the Minister is about the stamp duty land tax form. This might be slightly legalistic and anorakish, but it might nevertheless have a benefit for Government.

At present, when someone submits an SDLT form, the national insurance number of the buyer goes on the form. I suggest that we change that slightly, so that the seller’s NI number also goes on the form. Why? It would give Her Majesty’s Revenue and Customs an opportunity to check two things: capital gains tax and payment of income tax. That is particularly relevant to people who have second, third or fourth properties and is not related to the principal private residence.

I believe that there may be some uncollected tax, because it is possible for people to avoid paying income tax on a rental property, or capital gains tax. Ensuring that the seller’s national insurance number is also on the form would be a great way for HMRC to cross-check to make sure that, over the period of ownership, the seller has paid income tax, as well as to confirm whether capital gains tax is due when the property is sold.

The proposal has strong support from the industry. It is an idea that I have supported throughout my time as a Member of Parliament. Many members of my profession support the idea. Building societies, particularly the Yorkshire Building Society, have been very vocal in support. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) may be an exception, but many estate agents agree. It is a policy whose time is coming. In the Budget, the Chancellor took first-time buyers out of the tax altogether. It is one more step to reform the tax in the way I suggest.

I welcome the changes that the Chancellor brought in in the Budget. The increase in thresholds was welcome. Previous changes, such as sliding scales, were very sensible. There is an opportunity for the Chancellor to innovate further and change this aspect of our tax system. I do not expect the Minister to announce changes to policy today, but I hope he will consider my idea. Will he look at the issue? Will he meet representatives of the industry to discuss it? Will he carry out a consultation on it? Out of interest, does he agree with my idea?

On the national insurance suggestion, will the Minister look at that and give feedback? I am sure Treasury officials would be able to analyse whether the suggestion would be beneficial. Will he look at whether there has been a loss, or a potential loss, in income tax or capital gains tax from people who have owned second properties?

Property really does matter in this country. I completely understand the importance of getting the supply right. Types of ownership and the mix are so important, but so are changes to our tax regime. As I said at the outset, property taxes raise a huge amount of tax in this country—it is probably one of the biggest areas of tax for our Exchequer. This is an opportunity to make a small but significant change to that regime. I look forward to hearing the Minister’s response.