Graham Stuart
Main Page: Graham Stuart (Conservative - Beverley and Holderness)Department Debates - View all Graham Stuart's debates with the HM Treasury
(1 day, 17 hours ago)
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James Murray
As Members from both sides of the House know, we are determined to get people back into work, because that is the way to bring the welfare and benefits bills down, and to make people better off. What is not the right thing to do for this country is to follow the Conservatives’ plan for £47 billion of cuts, for which they have no plans and that would represent nothing less than a return to austerity. If their £47 billion were to come from cuts to public services, that would mean 85,700 fewer nurses, cutting every police officer in the country twice and cutting the entire armed forces. Funnily enough, none of that detail is in their motion today.
To have proposed the motion is a shame for British politics, because with the Conservatives’ long history, they really should know better. Were it to be the Greens, Plaid Cymru or Reform proposing policies with little regard for the consequences, I would not be surprised because they have never had a chance to implement them, but to see the party that was in charge for 14 years acting this recklessly shows just how far it has fallen.
Graham Stuart (Beverley and Holderness) (Con)
The Minister is always generous with his time and always has a smile, which is a welcome thing in this Chamber. Government spending this year is approaching £1,300 billion, but Ministers could not save £5 billion because of their own Back Benchers. Is it his complete failure to make even the smallest savings on that monumental budget that makes him find it impossible to believe that others would have the will to do so?
James Murray
What I find it impossible to believe from the Conservatives is that they now have a shadow Chancellor who claims to have a plan for £23 billion of welfare cuts, when he himself presided over the biggest increase in welfare spending in decades when he was the Secretary of State for Work and Pensions. That is the record that gives him no credibility whatsoever in this debate.
In their motion, the Conservatives also claim that they want
“to get Britain working, to grow the economy and to give people a stronger stake in their communities”.
Yet they spend their whole time trying to claim that Britain is broken. They have joined the ranks of those who are trying to co-opt our flag for their own ends by claiming that it is in tatters. I cannot believe that so many who claim to be proud of our country are so willing to talk it down. Our country is not broken; we are a great country, filled with great people and great businesses. We are willing to roll up our sleeves and work together for a greater future. However, it is clear that many people across our country feel stuck. Under the last Government, our economy stalled, our public services were starved and opportunities dried up.
Jonathan Hinder (Pendle and Clitheroe) (Lab)
Let us get straight to the point: what we are discussing today is a Tory plan for tax cuts for the better off, with no plan to pay for it. That is what the Tories have chosen to spend their Opposition day on.
My constituents are frustrated by the stark regional inequality in our country that means that London and the south-east are, economically speaking, another country all together. They lament the lack of public investment in transport, infrastructure and skills that this Labour Government are seeking to put right, so it is staggering that the Tories have chosen to propose tax cuts for people buying expensive homes in London and the south-east, further entrenching that regional inequality.
In the north-west, the average house price is about £200,000; in London, it is over £550,000. That means that 95% of first-time buyers in the north-west of England do not pay stamp duty, whereas 80% of them in London do. These are, let us be clear, the priorities of the same old Conservative party we have always known: the protection of wealth in the south-east above the concerns of constituents such as mine. Where would their supposed spending cuts fall? The motion does not tell us, so we can only assume that they would fall on public services in areas such as Pendle and Clitheroe.
The funny thing is that I am a strong advocate for serious property tax reform, but the Tories are not proposing to address the most unfair, regressive tax in Britain, which is council tax. Our council tax system punishes working-class people in the north precisely because they live in a poorer area. Can you believe, Madam Deputy Speaker, that someone living in a £1 million London townhouse will pay £1,000 less per year in council tax than a constituent of mine living in a house worth £250,000? It bears repeating—£1,000 less for someone who lives in a £1 million London townhouse than for someone who lives in a £250,000 house. That is outrageous, and if the Conservatives were still a serious party, perhaps they would focus on council tax, which is so emblematic of the regional inequalities I have just mentioned. Those inequalities have condemned once-prosperous regions of the country to steady economic decline.
The Conservatives will not do so, though, because they quite literally no longer represent regions such as mine. Looking across the Chamber, I cannot see a north-west Conservative MP, but that is not surprising, because there are now only three—they are a rare species, just as Conservative MPs are in many other regions outside the south-east. The Conservatives’ answer remains the same as it has always been: that growth in the south-east will lift up constituencies such as mine. “Make those with wealth wealthier and everyone else will benefit”, they say, but that economic thinking has failed time and again.
Jonathan Hinder
I am going to finish.
Property taxes in this country do need radical reform—on that, I hope I can find allies on all sides of this House. We need a more proportional property tax, but the Tories’ hare-brained idea to scrap stamp duty—a big tax cut for the better-off in the south-east—with no plan to pay for it, while leaving the regressive council tax untouched, is just not serious.
Chris Curtis
I will make some comments about the unfairness of the council tax system in a moment. We can have a conversation about tax and spend, and there is a much wider conversation to have, but today’s debate focuses on a very specific cut in a very specific part of property taxation, and there is a problem with having that conversation in isolation, rather than having the bigger, bolder, politically braver conversation that I would like the Opposition to start about wider reforms of our property tax market.
Graham Stuart
I must say that I am encouraged by the hon. Gentleman’s speech. For once, he is not purely engaging in the “14 years of failure” rhetoric of the Labour party. He recognises that stamp duty is a bad tax, and he says that we need a proper, joined-up and deeply-thought-through approach to getting rid of it. Is he pledging to lead such an operation in the Labour party? Given that for the next four years there will be 400-plus Labour MPs, the debate within his party is more important than the one within ours.
Chris Curtis
I am glad that the right hon. Gentleman has asked me to comment on the 14 years of Tory failure—years in which his party failed to grow the British economy and created a number of the problems that the country faces. While the shadow Chancellor made many good remarks in his opening speech, there was a little bit of amnesia about the state of affairs that was left to this Government. However, we do need an honest conversation about tax reform, including reform of property taxes.
We have spoken a little about what the Institute for Fiscal Studies has said, and the IFS is right. The UK essentially relies on two big but fairly broken property taxes. Council tax does not create the distortions that stamp duty creates, but it is regressive; stamp duty creates distortions, but it is at least progressive, and mitigates some of the regressive elements of council tax. If we look at only one half of the equation and simply cut stamp duty, we will tilt the system further in favour of the wealthiest households, many of them in London and the south-east, while telling lower and middle-income families elsewhere that there is nothing in the system for them.
We should consider just how unfair council tax has become. Given that the top band is capped so lightly, the bill for a modest family home in the north or the midlands can be similar to that for a multimillion-pound townhouse in London. Paul Johnson, formerly of the IFS, has already been quoted, but let me read out a tweet from him:
“Buckingham Palace, valued at around £1bn, sits in band H and is charged £1,828 by Westminster City Council, less than an average three-bedroom semi in Blackpool...46% of households in England will receive a bigger council-tax bill than the Palace.”
That is clearly a broken tax system, and if we ignore that and focus solely on stamp duty, we will only make things worse.
Moreover, because successive Governments have not had the bravery to revalue, the tax bands are still based on 1991 values. In 1991, Tim Berners-Lee had just invented the world wide web, Nirvana had just released “Nevermind”, Will Smith was filming the first series of “The Fresh Prince of Bel-Air”, and I had not been born. A lot has changed since then, yet we have still not reformed the way in which we carry out council tax valuations. So yes, I agree that we should set a path to reducing stamp duty and ultimately reform the way in which we deal with it, but that should be part of a broader package that shifts tax away from transactions and towards ongoing occupation of higher-value properties. It could include revaluation and re-banding of council tax, so that bills reflect today’s values. There could be a higher rate or surcharge for the most expensive properties, and targeted reliefs to support downsizers and first-time buyers.
Graham Stuart
The hon. Gentleman is giving a brilliant speech, I must say, and given the energy that he is bringing to it, it “Smells Like Teen Spirit” to me. I agree with most of the points that he made about council tax. It is outrageous what we see when we compare the tax on a small flat in Beverley with that on a multimillion-pound apartment in Westminster. Does he recognise that the cut in business property relief will impose huge costs on businesses, such as house builders, one of which I met last week? If that business was worth £100 million, say, on the death of the owner, the tax would be £20 million, and the person inheriting the business would have to extract £40 million in order to pay it. That house builder told me that for every £40 million taken out of the business, there would be £120 million of investment not made in housing. Does the hon. Gentleman accept that that is a real problem?
Chris Curtis
With respect, I think that I have already taken the debate a little bit away from stamp duty, and I do not want to go into the wider tax system—although, as I have said, it is important to broaden the debate and engage in a wider conversation about property taxes, as I have tried to do. If the Opposition genuinely want to remove stamp duty, I invite them to engage in that wider conversation in good faith. If we want to remove costs at the point of transaction for those buying high-value homes, it is only fair to ask them to contribute more through day-to-day charges. Such a system would be fairer, would support mobility, and would meet the objectives that I think are shared by Members on both sides of the House: a housing market that works, more building, and a tax system that is both pro-growth and fiscally responsible.
Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in this debate, and I think the quality of contributions from both sides has been excellent—which has not always been the case over recent months.
No one in Beverley and Holderness likes paying stamp duty—not first-time buyers in Beverley and not grandparents seeking to downsize in Hedon. Of course, as we know, it is not even popular with the right hon. Member for Ashton-under-Lyne (Angela Rayner).
Stamp duty was first introduced in 1694 to fund our war against the French. While we may have our differences with our friends across the channel, when I checked this morning, I was pleased to find that we are not currently at war with France. What began as a temporary wartime measure—raising £91,206, 10 shillings and fourpence in 1702—has become a permanent tax. But it is more than just a tax; it is a barrier to opportunity for young couples in Sproatley in my constituency, an impediment to aspiration in Aldbrough, and a block on families in Withernsea trying to climb the property ladder.
We, the Conservative party, have always been the party of opportunity, of home ownership and of family aspiration. That is why, at the next election, we will abolish this three-century-old tax. There have been welcoming signs that I did not expect to hear today: too often, colleagues on the Government Benches just slavishly repeat their speaking points, but we have heard thoughtful speeches and a recognition that stamp duty is a harmful tax. They may question our way of implementing the policy, but they recognise that.
We will abolish this three-century-old tax and unlock the housing market in Beverley and Holderness—and beyond. I encourage the Chancellor, and colleagues behind her, to follow our lead.
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
The shadow Chancellor would have us believe that the Conservatives have changed, and that the days of Liz Truss and her disastrous mini-Budget are behind them, but we can all see that nothing has changed. Once again, we see the same reckless attitude towards the public finances—cutting public expenditure to fund tax breaks for the wealthiest without being honest with the British public about who pays the price. The shadow Chancellor tells us he can fund this Liz Truss-style tax-cutting bonanza by making £47 billion in spending cuts. I simply ask him: if these fantasy savings are so easy to find, why did the Conservatives not make them during the 14 years they were in government?
Rachel Taylor
No, not at this point.
We have been here before with the Tories. They tell the public they can slash the state without any downsides, but the next thing we know is that our local library is being shut down, our local swimming pool goes with it and our vital services such as the NHS and schools end up in crisis. My constituents in North Warwickshire and Bedworth have suffered 14 years of austerity once, and they do not want to suffer it a second time. Let us look at some of the real facts about stamp duty.
Rachel Taylor
I am not saying whether stamp duty is a good or a bad tax. I am saying that I do not support simply abolishing it without any thought about the impact that that will have on the poorest people in our society.
The Tories have dressed up this fantasy tax cut as standing up for first-time buyers, but as a former property solicitor, I can tell them for a fact that that argument is completely false. In my constituency, a first-time buyer purchasing a property at the average price pays no stamp duty. This tax cut would be of no benefit to them whatsoever.
Gideon Amos
I would point my constituents to the comments made by Lucian Cook, the head of research at Savills, who has said that the proposed SDLT giveaway would simply pass straight into house prices. It would have very little, if any, effect on people’s ability to buy homes, whether they are downsizing or not.
Graham Stuart
The hon. Gentleman is being very generous with his time. I may have misheard, so will he clarify for the benefit of the House? At the beginning of his remarks, I thought that he said that this was a very bad tax and that it was harmful, but then, as only a Lib Dem could, he proceeded to argue strongly in its favour. Will he help me out, because I am not following the line of his argument?
Gideon Amos
The right hon. Member, for whom I usually have respect, was clearly not listening to what I said. It is possible for there to be several features to a change in tax policy. Our argument, as my hon. Friend the Member for St Albans pointed out, is that we need a comprehensive review of property taxes. The effect of the stamp duty holiday was to increase house prices. It may, none the less, be a valuable policy, because it may free up transactions, as my hon. Friend the Member for Carshalton and Wallington (Bobby Dean) argued. My observation is that these are not the policies that will help people who are struggling to afford a home to rent and to get on the housing ladder in the first place. They may be valuable for other reasons, but they will not address that problem. As I say, coupled with that we need a big investment in rent-to-own housing. Since 2015—this is the big point, which would be unaffected by the Conservative proposal— the multiple of income needed to get a mortgage, as my hon. Friends have pointed out, has risen from four-and-a-half to six-and-a-half times their income.
Without more genuinely affordable homes in significant numbers and wider tax reform, this cut is unfunded. It will leave first-time buyers with nothing new and transfer funds to the wealthiest. That is simply not enough to help my constituents. We need a much more ambitious renaissance in the building of council and social rent homes, and we need new measures to help people to get on to the housing ladder.
Sir Ashley Fox
My hon. Friend has made a valuable point. This tax cut benefits not just the first-time buyer, but the family moving into a larger home and the empty nesters—I am almost one—seeking to move into a smaller house.
Graham Stuart
May I take up my hon. Friend’s point about the dynamic market that we need? People in south-east England may be thinking of moving to, for instance, Beverley and Holderness to take up a job, but may be put off by the costs involved, and the risk that they are taking in moving to an area where there may be only that one job for them, and no other jobs to compete with it. So they do not make that move, and we do not benefit from their input into a business in Beverley and Holderness, purely because of the dampening effects of this tax. They stay in the south-east, although they, the country and Beverley and Holderness would be better off if only they were incentivised to move and take a chance.
Sir Ashley Fox
That is another valuable point. This tax cut benefits not just the housing market but the jobs market, and therefore the whole economy. Our politics ought to empower people, not load them with additional burdens. This is an important measure for young people, because, as we acknowledge, they face higher costs and more competition for housing than their parents did.
To be credible, we must explain how we will pay for this measure. That is a valid question, and, unlike some parties in this place, we will not make promises without a plan for delivery. The measure is possible as part of a wider package of economic reform, spending discipline and growth creation. The Government were elected on a policy of “going for growth”, yet everything that they do seems designed to bring about the opposite. A jobs tax makes it more expensive to employ people; higher business rates make it more expensive to conduct business in a property; the changes in agricultural and business property relief—increasing inheritance tax—reduce investment by family businesses; and the Employment Rights Bill makes it more expensive, time-consuming and difficult to employ people. The Government have turned on the spending taps and levied record levels of tax, while at the same time implementing measures that increase unemployment and make Britain less competitive. Every Labour Government has led to higher unemployment, and it is deeply regrettable that in every month since the general election, unemployment has risen. I do not think that the Government are malevolent; they simply have no clue about how business works.
The Economic Secretary to the Treasury (Lucy Rigby)
I thank all hon. and right hon. Members who have contributed to the debate. I especially thank the Chief Secretary to the Treasury, my right hon. Friend the Member for Ealing North (James Murray) for his speech at the start, and the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride) for bringing forward this debate. I also thank the shadow Secretary of State, the right hon. Member for Braintree (Sir James Cleverly) for concluding on behalf of the Opposition.
With those niceties over, I turn to the substance of the motion we are debating, which, as the Chief Secretary to the Treasury said, is fundamentally flawed. Despite the Leader of the Opposition’s seemingly steadfast commitment to having no policy at all, which has now been very much abandoned, Conservative Members have looked back at their shockingly bad economic record and taken the rather extraordinary view that they are well placed to offer input and advice on the upcoming Budget, which is entirely a matter for the Chancellor to decide once she has seen the OBR’s forecast and which she will share with the House at the end of next month.
The Conservatives have looked at all of this, thought for seemingly quite a long time about it, and decided that now is the right moment to offer some policy. The solution to all the hardship they inflicted on the country during their time in power is more of the same: more unfunded tax cuts, more instability, more austerity, more harm to our public services and, dare I say it, more of the approach that meant that their penultimate Prime Minister was outlasted by a lettuce.
Lucy Rigby
I will make some progress.
That is the Conservatives’ pitch to the British public—reckless with our public finances, reckless with our public services and reckless with the future of this country. Conservative Members are competing to say how sad and angry they are about this tax. They will be furious when they find out which party gave us the highest tax burden since the second world war! [Interruption.] The motion is a seemingly straight-faced argument from Conservative Members that we should do the exact thing that brought their 14 years of government to an end. It is proof that they have learned—
Madam Deputy Speaker (Ms Nusrat Ghani)
Mr Stuart, is it an actual point of order? I think the Minister was coming to a conclusion, so we are just preventing our business from progressing. Ministers, Front Benchers or Members not taking interventions is not necessarily a point of order. Do you want to proceed?
Graham Stuart
I would like to proceed, Madam Deputy Speaker. [Laughter.] I wonder if there is anything the Chair can do to help the Minister. She appeared unaware that her own Government, for whom she is a Treasury Minister, have brought us to the highest ever level of tax in this country.
Madam Deputy Speaker
Order. It is not my job to write yours or the Minister’s speech—if only. That was not a point of order.
Lucy Rigby
Thank you, Madam Deputy Speaker.
The motion is proof that the Conservatives have learned none of the lessons of their catastrophic mini-Budget or of the years of the punishing austerity that was inflicted on the people and institutions of this country, with nothing whatsoever to show for it but soaring debt, low productivity and devastated household finances.
Let me be clear that stamp duty is not a beloved tax—far from it; it is no more beloved than any other taxes—but it is an effective tax that raises billions of pounds annually, with those buying the most expensive properties contributing the most. That contribution is vital to the upkeep of our public services, our NHS, our schools and our armed forces. Abolishing it would take billions out of the public purse—£13.9 billion alone. It would be a multibillion-pound tax cut affecting the budgets of our most essential services.
It is the same horror show from the same old Conservatives, wildly swinging their scythe at public services without a care in the world for the consequences for our NHS, our schools and our armed forces. Which services would Conservative Members want to cut down this time? Would it be fewer nurses, fewer soldiers or fewer police officers? [Interruption.] Conservative Members are asking me whether I am asking them. I am more than aware that in the debate they referenced their fantasy economics based on welfare cuts. The shadow Chancellor oversaw the biggest increase in benefit spending in decades when he was Secretary of State for Work and Pensions. If he truly believes that welfare spending needs cutting, why did he let it balloon? We have heard from various hon. Members about their objections to this tax and about all sorts of things they imagine might be in the Budget.
Graham Stuart
Just to be clear, does the Minister agree that this is a bad tax? Would she, in a perfect world, seek to find ways of controlling public expenditure so that the tax could be removed and people across the country—first-time buyers and the elderly in particular—could benefit from that?
Lucy Rigby
It is a tax, so obviously I do not love it, but what I find extraordinary is the Conservative party’s new-found hatred of taxation when they increased taxes 25 times in the last Parliament.
As I said, we heard from various hon. Members about their objections to this tax. I will not engage on the points made about the Budget, for obvious reasons, except to repeat that we are committed to a single major fiscal event per year where the Chancellor will set out any tax decisions in the usual way alongside the OBR’s forecast. That fiscal event will take place, as everyone knows, on 26 November, at which point there will be plenty of time to discuss and debate the decisions that the Chancellor takes in the Budget.
I want to speak to some of the points raised during the debate. We heard plenty from Conservative Members about why they want to abolish stamp duty. I think some points were made thoughtfully; I say that in a well-meant way. I am sorry to say, however, that we heard absolutely nothing from Conservative Members on their appalling economic record. We heard nothing from them on their appalling record on house building—save for the acknowledgment of the right hon. Member for North West Hampshire (Kit Malthouse)—nothing on the waste of public money from the fraud on their watch, and nothing whatsoever that could be described as fiscal responsibility.
We heard from some of my hon. Friends on the Labour Benches about the urgent need to build more houses in this country, given our appalling inheritance. That is the key way that we solve the housing crisis. I pay tribute to the thoughtful speeches of my hon. Friends the Members for Welwyn Hatfield (Andrew Lewin), for Milton Keynes North (Chris Curtis), for Crewe and Nantwich (Connor Naismith) and for North Warwickshire and Bedworth (Rachel Taylor), and to my hon. Friends the Members for Loughborough (Dr Sandher) and for Tipton and Wednesbury (Antonia Bance), who spoke powerfully of the consequences of the Conservative party’s mismanagement of the economy, which include food banks, poverty and, of course, the housing crisis.
I welcome the commitment of the right hon. Member for North West Hampshire. He talked about the need to build more housing and, indeed, about beautiful housing. I assure him that that is exactly the type of housing that this Government will facilitate being built—although I note that his colleagues took him straight back to opposing development no sooner had he made that point. I also welcome his mini-insight into the infighting of the last Government.