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.

Oral Answers to Questions

John Stevenson Excerpts

Tuesday 16th January 2018 Commons Chamber

[Mr Hammond]

Yes. We engage frequently with industry, and our No. 1 priority is obviously to ensure that we protect the UK economy as we exit the EU. In fact, as a manufacturer of aviation equipment, which has a zero EU tariff, Airbus should be relatively minimally affected. Nevertheless, I think the company’s particular concern is about the ability to bring EU nationals into the UK to work, and we have assured it that we will make sure that high-skilled individuals can continue to come.

[John Stevenson (Carlisle) (Con)]

I appreciate that the next stages of the negotiations with Europe are about to start, and what we want to see is a good deal for industry, business and the service sector. Does the Chancellor agree that membership of the European Free Trade Association could offer that opportunity for us?

[Mr Hammond]

Membership of the European economic area, which EFTA would entail, involves under current rules compliance with the four freedoms, and that means free movement of people, which the British people rejected in the referendum in 2016.

Enterprise Bill [Lords]

John Stevenson Excerpts

Wednesday 9th March 2016 Commons Chamber

[Brandon Lewis]

My hon. Friend gets to the heart of a key issue: what is right for the wider community and for our consumers and residents? To build on his very direct point, let me add that I spoke to somebody just last week who made a very salient point: as someone who works in the health service six days a week, they really want this wider opportunity on a Sunday to shop in the way everybody else does on a Saturday, a Friday and a Thursday, and to spend time with their families in these shopping areas, supporting their high street, as many of us can on a Saturday. I am sure that there are many Members of this House who work hard on a Saturday and who might also take advantage of this freedom on a Sunday.

[John Stevenson (Carlisle) (Con)]

I live in Carlisle. Last Sunday, I went shopping in Gretna. Is it not right that the people of Carlisle get the same opportunity as Scottish people to decide whether we should be open on Sundays?

[Brandon Lewis]

My hon. Friend will know as well as I do, if not better, that businesses in Carlisle want this power; indeed, the Labour local authority wants it, and it may well bid to be one of the pilots.

I should be very clear: if amendment 1 is not accepted today, we will only go forward in the other House with our new amendment, which will mean there are only 12 pilots—no more than that.

--- Later in debate ---

[Bill Esterson]

I am sure SNP Members will answer the hon. Lady’s question. The reality is that we have a great British compromise that allows different situations in different parts of the United Kingdom.

Before the election, as we have been reminded a number of times, the Prime Minister’s office confirmed that the Prime Minister had no plans to change Sunday trading. The Conservative party manifesto did not state that it would change Sunday trading. Many Conservative candidates—a number of them have told me this—wrote in good faith to constituents to confirm that the Government would not be implementing such changes.

In Committee, the Minister justified the changes by saying the current rules date from a time before the internet—1994, to be precise. In a Populus survey from January this year, however, not a single respondent said that restrictions on Sunday trading were a reason for them shopping online—not a single person out of 2,008 people in a representative sample. Yet online trading is given as a key reason for needing to extend Sunday trading. For good measure, not a single industry or media analyst suggested that the recent poor Christmas trading results were caused by a lack of opportunity for shoppers on Sundays. Unbelievable!

The Minister told us in Committee that the reason for the change of mind was that when the Prime Minister’s office wrote the letter it was as the Prime Minister of a coalition Government, but that now he is the Prime Minister of a Conservative majority Government everything has changed. Presumably, he intended to become the Prime Minister of a majority Government when his office wrote the letter and when it wrote the manifesto, and I rather doubt that that cuts much ice with Conservative Back Benchers who support the Keep Sunday Special campaign.

The Minister also told us that the proposed changes were about devolution and decisions being taken by local people. However, as council chief executives have clearly said, in most areas, the changes would be applied to out-of-town shopping centres, to the detriment of high streets. Those same chief executives have also pointed out that, if one council introduces changes to Sunday trading, their neighbours will have little or no choice other than to follow suit, or run the risk that trade would migrate to businesses in the neighbouring authority. This is not the localism the Government claim. It is passing on the blame for an unpopular measure that only one in eight people support, according to a Populus poll last September. We were told that the changes would help the high street.

[John Stevenson]

Does the hon. Gentleman not think it is right that the people of Carlisle should decide whether shops are open on a Sunday, so that they can compete on an equal footing with Scotland, which is only nine miles away?

[Bill Esterson]

If the hon. Gentleman wants to organise an Adjournment debate about the people of Carlisle, I am sure the Minister will answer him. The reality is, however, that if one—[Hon. Members: “Answer!”] If hon. Members will let me answer the question, I will. If one council changes its rules, neighbouring authorities will feel under pressure to do exactly the same thing. They will have no choice. If a Tesco opens on a Sunday until 10 o’clock at night, then the Tesco, Asda or Morrisons in the borough next door will have to open until that time, too.

--- Later in debate ---

[John Stevenson]

The hon. Lady is banging on about fairness. Is it fair for a business in Scotland potentially to have a competitive advantage over a business that is 9 miles away?

[Hannah Bardell]

The hon. Gentleman is missing the point. What is not fair is for the UK Government to bring in provisions that will have a knock-on impact on Scottish workers and reduce wages. It is on that basis that we oppose them. The UK Government have had time to bring forward the necessary safeguards and guarantees that there will be no detriment to shop workers in Scotland or the rest of the UK, but they have failed to do so.

There is a fundamental point about process and respect for Parliament, its Members and the constituents we represent. We owe it to our constituents to do our business in a manner that is fair, open and transparent. The Secretary of State and the Minister should listen to that. The way in which the provisions have been shoehorned into successive Bills as a last-ditch slapdash amendment is appalling. The Government should do their business better if they want to command the support of the House or the UK public.

The UK Government have left it to the last possible moment to publish the impact assessment and the family test, and they would not devolve employment law to Scotland. For that reason, and for the good of shop workers across Scotland and the UK, and the 450,000 of them who receive premium pay, my SNP colleagues and I will support the amendment in the name of the hon. Member for Enfield, Southgate (Mr Burrowes) to remove the Government’s proposals from the Bill.

Oral Answers to Questions

John Stevenson Excerpts

Tuesday 19th January 2016 Commons Chamber

[Damian Hinds]

The lowest earners experienced the fastest growth in median earnings last year, and recent growth in employment has been dominated by full-time workers, contary to what the hon. Gentleman says. We have a comprehensive plan for driving productivity in the “Fixing the Foundations” strategy, and the national living wage is a dramatic, long-term structural change.

[John Stevenson (Carlisle) (Con)]

4. What progress he has made on the establishment of the northern powerhouse.

[The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne)]

Our long-term plan is to turn around the decades-old economic divide between the north and south by building a northern powerhouse. We said we would create powerful new elected Mayors, and that is happening; we said we would speed up transport connections across the north, and we have committed £13 billion of investment; and for my hon. Friend’s Cumbria, there is a new enterprise zone, new air routes and nuclear research. The north is growing under this Government, and, with our plan, we will do everything we can to keep it growing strongly.

[John Stevenson]

I, like many of my constituents, want Carlisle and Cumbria to be part of the northern powerhouse. This is partly about ensuring the private sector invests and grows and partly about skills and infrastructure, but then there is the proposed Cumbrian deal. Will the Chancellor assure me that everything is being done, from the Government’s perspective, to achieve this deal, and will an elected Mayor be part of it?

Oral Answers to Questions

John Stevenson Excerpts

Wednesday 9th December 2015 Commons Chamber

[Mr Osborne]

Currently, two thirds of people in England who apply for nurse training courses are turned down. That cannot be right, as it means hospitals increasingly rely on agency staff or overseas nurses. We are reforming the education of nurses so that those who apply for nursing places are much more likely to get them.

[John Stevenson (Carlisle) (Con)]

Carlisle and Cumbria have experienced a traumatic few days, with the devastating floods. It was good that the Prime Minister saw at first hand the tremendous work of the emergency services, the issues relating to the flood defences and of course the direct impact of those floods on local families. As part of the recovery, Cumbria Community Foundation, a highly respected, county-wide charitable organisation, has launched a flood appeal. I wrote to the Prime Minister asking for the Government’s support for the appeal, as it would help many affected people right across the county. Would the Chancellor be able to offer such support from the Government towards this much-needed fund?

[Mr Osborne]

First, everyone here would pay tribute to the people of Carlisle, the extraordinary resilience they have shown and the acts of friendship that neighbours have shown to those affected by the terrible floods. Before the Prime Minister left for central Europe this morning, he asked me to make sure we would be able to help on the specific point my hon. Friend raises, and did raise with the Prime Minister, and I can say that we will support the work the Cumbria Community Foundation does and we will match, by up to £1 million, the money it is raising for its local flood appeal.

Spending Review and Autumn Statement

John Stevenson Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

The last point that the hon. Lady raised was a perfectly fair one. At the moment, people can leave this country for up to 13 weeks and continue to receive housing benefit and pension credit, without any explanation of why they left. That is a very long time for the people she represents and the people I represent to pay the housing benefit of someone who is not even in the country and is not living in the house for which the housing benefit is being paid. We are reducing that to a month, which is still quite a long period. There will be arrangements and discretionary support to help people who face exceptional circumstances of the kind that she describes, such as a bereavement.

As part of the Welfare Reform and Work Bill, we will come forward with the results of the work and consultations that we have undertaken on the issue she raises about rape and violence.

[John Stevenson (Carlisle) (Con)]

I thank the Chancellor and congratulate him on securing an enterprise zone for Carlisle. It is hugely significant for the area and I look forward to his visiting when the site is full. Does he agree that if business is to invest in places such as the Carlisle enterprise zone there must be financial stability and consistency of policy? Does he agree that it is important that business success is central to Government policy?

[Mr Osborne]

My hon. Friend is absolutely right. He is a champion of bringing businesses to Carlisle. I have made a number of visits with him to Carlisle businesses, including a sawmill and construction sites that are providing new homes for people there. He is right that none of those things is possible—people do not build houses and businesses do not expand—if there is no economic security and no confidence in the long-term plan of the Government. We have been able to provide a new enterprise zone for Carlisle, and buried in the detail of the document there is extra support for air routes from Carlisle as well.

The Economy

John Stevenson Excerpts

Wednesday 18th November 2015 Commons Chamber

[Stewart Hosie]

Growth was strangled throughout the early part of the recovery in the last Parliament. If it has picked up since, that might say more about the weakness of our major competitors than any inherent goodness or sense in the Tory plan, which, as I say, has actually failed. This is an austerity programme that saw £121 billion-worth of cuts, tax rises and discretionary consolidation in the last Parliament that strangled the recovery. With an extra £37 billion to come, we are now on track for a full decade of austerity.

It is worse than that, however. With the Government changing the ratio of tax rises to cuts from 4:1 to 9:1 during the last Parliament, we have the clearest indication not simply of failure, but of failure delivered by trying to balance the books in a way that was never going to succeed and on the backs of the poor. That is a situation that will only get worse, as the motion mentions, through changes to tax credits.

[John Stevenson (Carlisle) (Con)]

Does the hon. Gentleman not think that the creation of 2 million jobs is a success?

[Stewart Hosie]

I think that the creation of every job is welcome for the person who gets it, and I think that the creation of well-paid, permanent and secure jobs is fantastic, as those provide not only the income that families need, but the security with which to build strong and stable communities. Of course I welcome jobs as they are created, but we need to look at every single part of the economy, not simply single metrics—whether they be good or bad. The Government’s record in the round is lamentable.

I mentioned the plan to cut tax credits. Of course change may be announced next week, but few believe that the stubborn Chancellor and his Government will actually stray too far from the plans originally announced. Those plans have a quite horrendous impact on households in Scotland and throughout the UK. For many real people, real families and real communities, the erosion of household income is quite extraordinary. The average figures of £1,200 a year or £100 a month is routinely used, and it is an accurate figure, but for some households the annual loss is around £4,000 a year. [Interruption.] The Tories may find this funny, but a loss of that amount of cash implies a marginal tax rate of 90% on some of the poorest working households in the country. If the Government were to propose that, the Tory Back Benchers would be up in arms, but because they are taking what they see as benefits from poor people, it is suddenly okay, because that is the way smirking Tories always think.

Stamp Duty Land Tax Bill

John Stevenson Excerpts

Wednesday 10th December 2014 Commons Chamber

[Mr Gauke]

I am grateful to my hon. Friend for raising that point, because the Government have addressed this issue fully during this Parliament. A few years ago, SDLT was starting to develop a reputation as a tax that was easily abused—he mentioned one means by which that was done—but this Government have introduced several measures to deal with that. We have seen a substantial decline in the marketing of SDLT avoidance schemes, and the introduction of the annual tax on enveloped dwellings has been successful in discouraging avoidance. He is right to highlight the issue, but we are making changes in the context of an SDLT that is perhaps less leaky than when we came into office a few years ago. That enables us to make our changes, which benefit properties in a way that is, none the less, affordable for the Exchequer. As the Chancellor made clear last week, the policy will deliver a tax bill cut for 98% of people who pay SDLT, and the previous economic distortions in the system have been removed, which benefits the housing market generally.

[John Stevenson (Carlisle) (Con)]

First, I apologise for being late, as I was serving on a Delegated Legislation Committee. I welcome the reforms for the residential market, but do the Government have any intention to introduce similar provisions for the commercial market?

[Mr Gauke]

I am grateful to my hon. Friend for raising that point, which we debated briefly last week. Particular issues with the residential market meant that we needed to address that quickly, and some of the pressures to reform the system applied particularly to the residential market. Clearly, any Government will want to keep this matter under review, so I would not want to rule out looking at the commercial market. However, the imperative was to press on for the residential market, and no doubt commercial property and SDLT is a matter to which the Government will wish to return in the future. I know that he welcomes these reforms, and I should point out that more than 99% of transactions in his constituency will benefit from our changes.

--- Later in debate ---

[Mrs Anne Main (St Albans) (Con)]

I am delighted with the changes to stamp duty; I have been campaigning for them for a significant period of time. It is worth observing the old adage that success has many parents, but failure is an orphan, as it could be relevant to the campaign. When I was claiming a bit of a victory on this, having campaigned for it for so long, I was amazed to read that the Liberal Democrats had campaigned equally long for the change. Surprisingly, though, not a single Liberal Democrat turned up to the Back-Bench business debate that I secured on the matter on 4 September. Perhaps lobbying is more in the mind than in the actuality.

Let us not be bitter today, as I welcome the proposals. It was good to follow the shadow Minister, as she was raising some of the concerns that I have about a differential tax system. It will have to be addressed, because altering the designation of a property from commercial to residential, or residential to commercial, could provide a way of avoiding tax, as one situation may be seen as more beneficial than the other. To have a dual system running may well cause problems.

I also worry that in areas where it is hard to keep small commercial operations going, the temptation to flip a property’s designation to residential, rather than trying to maintain it as a commercial property, will be even higher if there is also a tax advantage in doing so. I urge the Government to keep that under review, because if the slab system was hated—and it was—it was hated not just for its effect on homes.

[John Stevenson]

Does my hon. Friend therefore suggest that commercial and residential properties should have the same rates and thresholds?

[Mrs Main]

I do suggest that. I am sure that budgetary constraint is the reason that has not been done, but I am concerned that that slice system, which will not apply in Scotland and will apply in England only to residential properties, could result in complicated reasons why commercial properties might end up being vehicles for tax avoidance, which would not be good. The slab system was roundly denounced by all parties and all commercial commentators, so I think that is something we should look at.

I welcome the moves to get more young people on the property ladder. In St Albans, the Help to Buy scheme was not utilised at all because, as has been widely observed, if people cannot save up a deposit in a very expensive area, how on earth can they save for the tax to be paid to the Chancellor? The reform is therefore very helpful in that regard. However, we must ensure that we do not allow the properties that we are trying to help—those targeted by lower and middle-income buyers—to be dragged further into the higher levels. In 2003 only 10% of properties were caught by the 3% rate, but just prior to these reforms the figure had risen to 25%. It is important that the Government do not sit back and wait for too long following these reforms, because too many of the families that they have sought to help will be dragged into the higher rates.

According to Savills, which I was talking to today, people in St Albans have already benefited. The amount paid under the previous regime was, on average, £17,273 per transaction. Under the new regime it will be £16,020. That is still very high, but of course that is an average, and the average house price in St Albans is over £500,000, but there are still many houses that fall well below those transaction levels. My constituents are hugely grateful that they can at least start trying to get on to the property ladder without having to pay such an enormous burden to the Treasury. That is welcome.

There are two points that I would like some clarity on. Why have we decided to keep a dual system going when the previous regime was agreed to be so demonstrably flawed? It might be unaffordable, but I think that is almost indefensible. If it is a bad scheme, it is a bad scheme. I do not want business owners and people who wish to aspire to own their own business feeling that they are labouring under a bad scheme that has been roundly denounced, and quite rightly so, by all parties in the House.

--- Later in debate ---

[Priti Patel]

These are now devolved matters, as the hon. Lady knows. As part of not only the devolution process but future policy formation, I have no doubt that discussions will take place.

[John Stevenson]

I am grateful for the earlier clarification about the Government’s position on commercial property. Can the Minister clarify the position on agricultural property?

[Priti Patel]

Agricultural property would be treated in the same way as commercial property. I hope that answers my hon. Friend’s question.

On housing supply and affordable housing—a point made today and last week from the Opposition Front Bench—all the work that the Government have put in place in relation to the stamp duty land tax measure has been about supporting aspirational home ownership and making home ownership a reality for as many households as possible. This Government support more home ownership, and stamp duty reform is part of that. We are investing billions of pounds to provide affordable homes including, as my hon. Friend the Financial Secretary mentioned, £4.5 billion during the spending review period to provide more than 170,000 new units, and a further £3.3 billion to deliver more than 165,000 more homes over three years from 2015. We have also speeded up reforms to planning. Housing starts in England are at their highest level since 2007, which we all welcome. In the autumn statement last week we announced a package to do even more, by introducing measures to support more than 133,000 new homes. My hon. Friend the Financial Secretary touched on rent-to-buy and help-to-buy schemes.

In conclusion, our long-term economic plan has supported home ownership through stamp duty land tax reform and increased supply through the measures that I have just outlined. Importantly, the economy is growing, the deficit is falling, and employment is at a record high. These are all economic measures that should be welcomed across the country. We are building a stronger, sustainable and healthier economy. The autumn statement set out a modest fiscal tightening and does not shy away from the challenges that remain.

Against that backdrop, we believe that aspiration should be supported. For centuries it has spurred people on. The Bill backs those who aspire. I am proud to be part of a Government who stand by aspiration and advocate it. This Bill reforms a fundamentally flawed system and will help make the dream of owning a home a reality, while cutting the tax bill for the overwhelming majority of people affected by it. There is consensus on this, as we heard this afternoon, and I hope the House will give the Bill a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Stamp Duty Land Tax Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Stamp Duty Land Tax Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on consideration and on Third Reading

(2) Notwithstanding the practice of the House as to the intervals between stages of Bills brought in on Ways and Means Resolutions, proceedings in Committee, any proceedings on consideration and proceedings on Third Reading shall be completed at one day’s sitting.

(3) Proceedings in Committee and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion, on the day on which proceedings in Committee are commenced, two hours after the commencement of proceedings in Committee.

(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion, on the day on which proceedings in Committee are commenced, three hours after the commencement of proceedings in Committee.

(5) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee, to any proceedings on consideration or to proceedings on Third Reading.

Other proceedings

(6) Any other proceedings on the Bill (including any proceedings on consideration of any Message from the Lords) may be programmed.—(Gavin Barwell.)

Question agreed to.

Wales Bill (Programme) (No.3)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Wales Bill for the purpose of supplementing the Order of 31 March 2014 in the last Session of Parliament (Wales Bill (Programme)), as varied by the Order of 30 April 2014 in that Session (Wales Bill (Programme) (No. 2)):

Consideration of Lords Amendments

1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion three hours after their commencement at today’s sitting.

2. The Lords Amendments shall be considered in the following order: Nos. 1 to 13, 17 and 14 to 16.

Subsequent stages

3. Any further Message from the Lords may be considered forthwith without any Question being put.

4. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Gavin Barwell.)

Question agreed to.