Stamp Duty Land Tax Bill

Jim Cunningham Excerpts

Wednesday 10th December 2014 Commons Chamber

[Mr Gauke]

It is an example of that. In yesterday’s Treasury questions, in the context of the reduction of the 50p rate of tax to 45p, I pointed out that the proportion of income tax paid by the top 1% has been higher—and is projected to be higher—in the years since that cut than it was when the 50p rate was in place. There is a similar point to be made here. For properties, we estimate that the top 1% will be paying just under 40% of all stamp duty yields, whereas in 2010, under the old system, the top 1% were paying only 19% of all yields. Stamp duty has become more progressive as a consequence of our changes.

[Mr Jim Cunningham (Coventry South) (Lab)]

How does that affect the shrinking tax base? This is a genuine question, by the way. The tax base seems to be shrinking at the moment, so will this change have an impact on the tax base, or will it be neutral?

[Mr Gauke]

I do not know whether the hon. Gentleman is referring to the fact that there has been a deliberate shrinkage of the tax base, in that we have taken 3.4 million people out of income tax. Perhaps that was not what he meant, but I am happy to draw the House’s attention to that policy none the less. The Government have, on a number of occasions, made the tax system more progressive. At a time when the public finances are in a difficult position and we need to consolidate them, we have ensured that the wealthiest in society bear a significant burden, and this measure is an example of that. We have made stamp duty land tax more progressive by reducing the burden on ordinary households and collecting more tax from the top end, where there has been a significant appreciation in values in recent years.

--- Later in debate ---

[Mr Gauke]

My hon. Friend raises an important point. Indeed, I am about to mention some of the measures that we have taken in respect of helping the housing market, including Help to Buy.

We are investing billions of pounds of public money to provide affordable new homes, including £4.5 billion during this spending review period to provide 170,000 new units, and a further £3.3 billion to deliver 165,000 more units over three years from 2015. As announced in the autumn statement, there will be another £1.9 billion between 2018 and 2020 to continue delivering homes at the same rate. We are also reforming planning laws. The autumn statement package contains commitments on releasing land with capacity for up to 150,000 homes and new measures to support up to 133,000 homes.

[Mr Jim Cunningham]

Will the Minister give way?

[Mr Gauke]

I should like to make some progress, as I want to answer the question asked by my hon. Friend the Member for Reading West.

In September, we introduced a new £400 million rent to buy programme, boosting the building of new rental homes to help people to upgrade into home ownership. The programme allows people to rent affordably and to save for a deposit, and then to buy that home or another one. To answer my hon. Friend’s question, more than 66,000 households have benefited from the Help to Buy equity loan and mortgage guarantee schemes, four fifths of whom were first-time buyers.

[Mr Cunningham]

Obviously we want people to be able to own their homes, but there is another facet to this: social housing, either through local authorities or housing associations. What element of the money that the Government are putting into these schemes is going to that end of the market? The drop from 70% to 65% that the Minister mentioned earlier probably relates to people going into the rental market.

[Mr Gauke]

The hon. Gentleman should bear in mind that almost 217,000 affordable homes have been delivered since April 2010. Between 2011 and 2015, some £19.5 billion of public and private investment is going into affordable homes, and we are on track for the highest rate of affordable house building in at least two decades. The Government are delivering on all aspects of how we ensure that we give people the opportunity to have decent housing. These SDLT reforms will give another boost to people wishing to fulfil their aspirations to own the place they live in.