Property Taxes in London

Debate between Kris Hopkins and Stephen Hammond

Tuesday 24th March 2015 Westminster Hall

[Kris Hopkins]

I recognise the tensions associated with this, but as a former Housing Minister, I have to respond to the idea of taxing people who live in certain houses. As both my right hon. Friend and my hon. Friend the Member for Wimbledon (Stephen Hammond) have pointed out, the fact that a person lives in a particular house may not mean that they are cash-rich as a consequence. A set of circumstances may have led to their owning the house, and simply placing a greater tax burden on those individuals does not necessarily produce more affordable homes.

[Stephen Hammond]

Will the Minister follow that line of logic? Even if he is not prepared to accept part of what my right hon. Friend the Member for Cities of London and Westminster (Mark Field) said, perhaps he will be prepared to look at the structure of banding regionally, to give a greater reflection of the differentials in house prices in different parts of the country. The current band structure clearly cannot reflect that, so the case for regional banding becomes even stronger.

[Kris Hopkins]

I respect my hon. Friend’s comments, but as a Conservative who has had many conversations about the word “regional”, I can tell him that that word does not sit comfortably in the Department at this time. I assure him that we will not be having a “regional” conversation about taxation.

The Government have already taken strong action against owners of high-value property who seek to avoid paying their fair share of tax. We have introduced a number of measures, including the 15% rate of stamp duty land tax, the annual tax on enveloped dwellings, and the extensions to capital gains tax, which target those individuals who “envelope” residential properties by owning or purchasing them through certain non-natural persons, such as companies. Those measures are proving effective. For instance, in its first year of operation—2013-14—the annual tax on enveloped dwellings raised about five times more than the original £20 million forecast. It is expected to raise £110 million in 2014-15.

Two important phrases came out of what my right hon. Friend and hon. Friend said: the “politics of envy” and the “class warfare” element. Both the measures that we have introduced to pursue the individuals who are avoiding tax are about making sure that people who have money and should pay tax do so. That argument is different from the one that the Labour party is making, which instils the politics of envy and class warfare against those who have achieved, rather than supporting those who are ambitious and seek to be successful in life. That is at our root as Conservatives: we will support the individual who wants to aspire to own something, rather than punishing somebody who has achieved those goals and ambitions.

The admirable achievements of successful local authorities, such as that of my right hon. Friend the Member for Cities of London and Westminster, demonstrate the effectiveness of the current council tax system. We believe that the implementation of higher bands would unbalance that system and alter the key principles of council tax, which, after all, is not a wealth tax. Extra revenue has been raised, however, by the taxes placed and targeted on owners of high-value property who seek to avoid paying their share of tax, as I have said. Furthermore, our innovative measures and programmes and a range of products that will meet a range of housing needs, with support from councils, housing associations and the private sector, will continue to deliver and build on the affordable homes programme.

My right hon. Friend raised the issue of foreign investment, and I appreciate that a significant number of people come to this great international city and invest. They have done so for many years, but sometimes people can distort the sort of comments that he made. In my time as Housing Minister, I saw many acres of coverage discussing the issue in many supplements. We should recognise that we are open-minded about people wanting to come to this city and invest in our infrastructure and housing.

Oral Answers to Questions

Debate between Kris Hopkins and Stephen Hammond

Thursday 28th February 2013 Commons Chamber

[Kris Hopkins (Keighley) (Con)]

T4. There are several large haulage companies in and around my constituency. Does my hon. Friend agree that the HGV Road Users Levy Bill, which is due to receive Royal Assent, constitutes an important step towards the provision of a level playing field for British hauliers, and is long overdue?

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

I do agree with my hon. Friend. This will be the first occasion on which the United Kingdom has charged those who come from overseas for their use of our roads. The levy will help to maintain the competitive position of UK hauliers, and to maintain the UK’s roads. There was a long-standing desire in the House for the legislation to be passed, and I am delighted that we were able to secure its passage.