Tenant Fees Bill

Debate between Kevin Hollinrake and John Stevenson

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 5th September 2018 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Will the Minister give way?

[John Stevenson (Carlisle) (Con)]

Will the Minister give way?

Stamp Duty Reform

Debate between Kevin Hollinrake and John Stevenson

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.

Local Government Finance (England)

Debate between Kevin Hollinrake and John Stevenson

Wednesday 10th February 2016 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I warmly welcome this statement today from the Secretary of State. My local authority, North Yorkshire County Council, will receive £15 million in transitional funding over the next two years, and my district authorities will receive £1.4 million. We hear cries of “Tory plot” from the Opposition, but my local authority was facing a 37% reduction in its funding, compared with an average of 20% for metropolitan authorities. What kind of Tory plot is that? This is about fairness.

[John Stevenson (Carlisle) (Con)]

Does my hon. Friend also welcome the news that Labour-run Carlisle and Labour-run Cumbria are also receiving some transitional relief?

[Kevin Hollinrake]

I do welcome that news.

This funding is targeted at the locations with the biggest falls. Opposition Members need to understand the profound feeling of unfairness that exists in my community, not just about funding for rural services but about the way in which our schools and healthcare are funded. How would they explain to an elderly constituent of mine in need of adult social care why she should get less funding than somebody in an urban area when she pays more in council tax? Why is that right? The right hon. Member for Birmingham, Hodge Hill (Liam Byrne) mentioned disadvantage, but a band D council taxpayer in my area pays £1,472 a year, which is £200 more than someone in his constituency.

These are deep cuts for the people we need to protect in our communities, whether they affect our libraries, our bus services, our post offices or those in our voluntary sector who do such fine work but who rely on central moneys to pay for the car schemes, the home visits, the day care and the relief care. I therefore welcome the fair funding review that the Secretary of State has announced. We just want fairness. We do not want a better deal than urban areas; we just want a fair deal, and whatever deal is arrived at needs to be baked into the system.

Historically, underfunding by successive Governments has led to our paying more in council tax and to our homes being more expensive to buy or to rent and more expensive to heat. Among the elderly population in my constituency, the numbers are rising three times faster than those in metropolitan areas, and the cost of providing services to those people is much more expensive. The Government recognised that in 2013-14, but we only got 25% of the funding that we were due, owing to damping.

What we need is a simple, transparent system that recognises need. Whatever that system might be, if it is fair Conservative Members will sign up to it without question. None of us is complaining about the size of the cake; we just want a fair distribution. We realise that we need to make cuts. Every time we have one of these debates, Opposition Members refuse to say where they would make such cuts. They are deficit deniers. We need to make cuts in our area. Our local authorities need to become more efficient.

In my area, we have eight separate local authorities. That cannot be right at a time when we are having to make deep cuts, and we need to look for efficiencies. That cannot be an efficient way to run local government. Local authorities have a part to play in this, and we have a chance to reorganise as part of the devolution revolution. We have a complex system with five clinical commissioning groups, five health trusts, eight local authorities and a huge number of voluntary organisations. If we are to make the best of the money available and balance the books, local government will of course have to play its part if we are to become more efficient. We need to bring together all our services, such as health, social care, housing and education, to ensure that they are interconnected and that they work more effectively without duplication, complexity or bureaucracy. This settlement gives us the breathing space to develop a new fairer funding formula—a simple, fair, future-proof and rural-proof formula—and I am very happy to support the motion.