Stamp Duty Land Tax

Anneliese Dodds Excerpts

Thursday 26th April 2018 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

The Government appear to have arranged to give this statement so that they can pat themselves on the back, while reducing the amount of time spent on customs union with the EU. I appreciate that that issue may be controversial—albeit only for the Government; every other actor seems to feel that some kind of customs union is a good idea—but that should not prevent democracy from running its course on the matter. The Government’s cunning plan to introduce the statement today has spectacularly backfired, because rather than offering an opportunity for congratulation and digression, it has merely provided a chance to indicate the Government’s failure to deal with the housing crisis.

The Government have said—we heard it again just now—that their stamp duty cut is intended to back home ownership, but home ownership has fallen to a 30-year low under this Government. They say that the cut was intended to help first-time buyers, but there are now a million fewer under-45s who own their own home than there were in 2010. Home ownership was up by some 1 million under Labour, but it has fallen since 2010 under Conservative Ministers as part of this Government’s eight years of failure on housing.

At the root of that failure is an inability to increase the supply of genuinely affordable housing. I do not need to set out how the stamp duty cut has failed to deal with that issue; I will use the words of the Office for Budget Responsibility, which stated that

“the main gainers from the policy are people who already own property,”

not first-time buyers. In contrast, measures from the Government to increase supply are woefully inadequate. To take just one example, local authorities will only be able to bid into a pot in order to borrow to build—a farcical situation when demand is so pressing. The number of genuinely affordable homes is declining, not increasing, under this Government.

We parliamentarians see all around us the worst impact of the Government’s failure on housing, whether it is on the people we walk past who are rough sleeping in the city of London—rough sleeping is now at record levels here, as it is in many other cities—or the 120,000 children who are living in temporary accommodation, and whose families come to see us in our constituency surgeries. I am keen to hear the Minister’s response to the question of whether he has commissioned research into the impact of this flagship measure on prices, in the absence of decisive measures to increase affordable supply.

It would be helpful to hear from the Minister how Her Majesty’s Revenue and Customs is dealing with what appears to be a quadrupling of money-back claims related to a malfunctioning online calculator. What HMRC rather amusingly—it is not amusing for the people affected—calls a “ready reckoner” appears to be anything but, in view of its failure to take into account relevant stamp duty discounts. I would be grateful to hear from the Minister when it will be amended so that it properly reflects mixed-use properties.

On the subject of confusion over what stamp duty should be paid, it would be good to hear from the Minister about what the Government are doing to deal with those who make bulk purchases of individual flats, thus avoiding the buy-to-let surcharge. Let us imagine, as a hypothetical example, someone purchasing seven flats, worth between £450,000 and £1 million each, in a seaside town. They might try to do so using their own company, rather than as an individual. If so, I would hope that they registered the beneficial ownership of that company with Companies House—a matter that I look forward to debating with the Minister next week in our consideration of the Sanctions and Anti-Money Laundering Bill. Aside from beneficial ownership, however, by undertaking such a bulk purchase, our imaginary, hypothetical person would avoid a significant amount of stamp duty—say, around £100,000—which could have gone into our cash-strapped NHS. Can the Minister please inform the House what he is doing to deal with that loophole?

Above all, can we please have genuine action from the Government to deal with our appalling housing crisis— we parliamentarians cannot fail to notice that it is causing much misery to our constituents and blighting the lives of many children—rather than misplaced self-congratulation?

[Mel Stride]

I thank the hon. Lady for her contribution and her questions. She opened by asking what was the motivation for giving this statement today. I reassure her that it is that we believe that housing policy is one of the great issues of our age and we are determined to get on top of it, as the Chancellor set out in the autumn Budget. That is why—to move on to her question about how we will drive up the level of home ownership—the Chancellor made it clear at Budget that a further £15 billion would be made available, taking us up to £44 billion over the next five years, to drive up the supply of new homes. That is alongside planning changes and the review that my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is undertaking to ensure that where planning permission is granted, houses are actually built. I suggest that we look at our record. Last year there were 217,000 new properties in this country, which is the largest figure since 2005-06. That indicates that our move towards having 300,000 more properties on the market by the middle of the next decade is realistic.

The hon. Lady asked specific questions about the effect of stamp duty relief on house prices, and she will know that the OBR forecast a small impact of 0.3%. She will also know that that projection did not take into account the various supply-side measures that I have mentioned, and other measures that we have undertaken. She asked about the specific case of properties bought within a corporate wrapper, and I hope she will be familiar with the annual tax on enveloped dwellings, which stands at 15% if the property is put into the wrapper. Indeed, on the basis she outlined where a property is then rented out, ongoing charges recruit tax in that way.