Stamp Duty Land Tax

Jim Shannon Excerpts

Tuesday 28th October 2025 Commons Chamber

[Kit Malthouse]

No, the people best positioned to decide where houses should go are local people. That is why, for many years, I have been a strong proponent of neighbourhood planning. It has been proven time and again that neighbourhood planning produces more houses—15% to 20% more—than other forms of planning, especially local plans. If we get the design right and put power in the hands of local people, they will very often make the right choices, not just for their community but for the next generation.

A point that the shadow Chancellor has made powerfully is that we should recognise that a gummed-up housing market, which is currently stagnating, suppresses the renovation and construction supply chain. When people move house, they invest in redecoration; they invest in extensions, put a new roof on the house, build on the side, and do all sorts of things to their new house that are good, valuable, productive economic activity. At the moment, we are missing out on that activity.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Gentleman for what he is saying, and I commend the Opposition on bringing forward this debate. In Northern Ireland, house prices have risen by 7.7%, which is the highest in all the United Kingdom. What is happening in my constituency—I suspect other Members have had this—is that young people are coming up to me and saying, “I cannot get a mortgage.” They need help. I hope that the proposal brought forward by the Opposition can give that hope. The right hon. Gentleman refers to the aspiration, which I have as well, that every person wants to own their own house. This proposal would be a method of ensuring that young people have that opportunity.

[Kit Malthouse]

I understand the hon. Gentleman’s hope for the next generation, and I completely agree with him. As somebody with three children, I hope they get the same housing opportunities and economic opportunities as I did. Sadly, given how the housing market has gone and is going, it does not look as if that will be the case, but he neatly makes the point that I made in opening my speech. To get young people on the housing ladder, a subsidy scheme would see us come full circle. Instead, we should think again about how we can have a deregulated free market that functions for them and allows the houses to be built that can accommodate them. Taking tax off young people and then giving it back in the form of housing subsidy is nonsensical.

To return to my point on the supply chain, thousands of small builders around the country are desperate for this kind of work and are seeing the housing market stagnating and their work reducing. Worse than that, in areas of high property value, those who do have capital decide, instead of moving, to build down, up or out. We therefore get densification, particularly in areas such as central London, which often causes significant problems.

Moving on, this tax does not work very well for Government either. First, as Members will know, it is pro-cyclical and crashes when the Government need it most. During the 2007-08 crash, stamp duty receipts fell by 60%. We saw a surge in stamp duty receipts during the window a year or so ago, but since then, they have been falling significantly. The Chancellor, who is facing significant fiscal problems, will see that fall even further, so the tax does not work for Government on that basis.

Secondly, stamp duty is a bad tax because of its salience. Economists have this idea that taxes have a salience, which is how much people notice they are being taken. VAT has low salience, because we do not really notice it. It is in the prices that we pay. Income tax and pay-as-you-earn have low salience. Stamp duty is enormously noticeable at a moment when people are making a huge decision about their lives. They are trying to progress their families and wham, here come the Government saying, “We are going to have a slice of your wealth.”