Mel Stride
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(1 day, 17 hours ago)
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Sir Mel Stride (Central Devon) (Con)
I beg to move,
That this House calls on the Government to reduce public expenditure to fund the abolition of stamp duty land tax on primary residences purchased by UK residents, in order to get Britain working, to grow the economy and to give people a stronger stake in their communities through the security of home ownership.
There comes a time in the careers of some in this House when they stand too close to the edge, when they play with fire and when they fly too close to the sun. To continue that astronomical metaphor, we have a Chancellor who has truly thrown herself headlong into a colossal black hole entirely of her making. The Chancellor has trashed our economy and she will blame anybody but herself: the Office for Budget Responsibility, the legacy, the Conservative party, Donald Trump, Brexit—whatever it is, as long as it is not herself.
However, we on the Conservative Benches know the clear truth. We know exactly what has happened to our economy. We know that we have a Government who, when they were in opposition, said that there was no way they would be putting up taxes left, right and centre, yet within 18 short months had done precisely that, layering up taxes on businesses and destroying growth at the same time as talking down our economy. Then there was the fictitious £22 billion black hole which, ironically, was debunked as not legitimised by the OBR at the behest of the Labour party itself. We know that Labour has borrowed colossal amounts of money and is due to spend around half a trillion pounds more than the plans it inherited.
What has been the consequence of that? It has been elevated inflation. We now have the highest inflation in the G7, and the International Monetary Fund tells us that next year we will once again have the highest inflation in the G7. The consequences of that, through monetary policy, are that interest rates will be higher for longer, bearing down on those who have mortgages and on businesses who wish to borrow. Critically, when it comes to our burgeoning national debt, which is soaring under this Government, the costs of servicing that debt are now running at £100 billion a year, rising to £130 billion across this Parliament. That is twice what we spend on defence. Indeed, if the servicing of our debt were a Department of Government, it would be the third largest in Whitehall. None of that money is going on public services. It is simply going to pay off the creditors who are owed money as a consequence of the profligacy of the Labour party.
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
Would the right hon. Gentleman agree that Liz Truss’s disastrous mini-Budget impacted on working families up and down this country, resulting in the astronomical mortgage interest rates that they are still struggling to fund?
Sir Mel Stride
We will take no lessons from the Labour party when it comes to the mismanagement of our economy. What I have just set out has led to a Chancellor who had a Budget in October last year in which she blew all the headroom and more, rebuilt it in the spring and is now, as we all know, heading into the Budget on 26 November with a gaping black hole that she will have to fill. That is due to economic incompetence and it is causing huge uncertainty.
I speak to businesses up and down the country. None of them know what to expect. They are all fearful about the tax rises that are yet to come, and that is down to this Chancellor. The consequence is that we have the highest level of unemployment in four years. We know that every other Labour Government in history have left office with unemployment higher than that it was when they came into office. In the retail, hospitality and leisure sector alone, 90,000 jobs have been destroyed under this Government. Young people are bearing the brunt of these policies. Under the Conservatives, youth unemployment fell by around 45%. Under the last Labour Government, it rose by around the same amount, and this Government are on course to do that too. Young people are particularly affected, because the national insurance changes involve not just an increase in the rate but a reduction in the threshold. That affects young people who are desperate to get their first job and their foot on the career ladder the most.
Wendy Morton (Aldridge-Brownhills) (Con)
Does my right hon. Friend agree that, even in such a short period of time, this Government are showing that it is they who cannot be trusted with the economy and the future of this country? Is it not time they woke up to the reality?
Sir Mel Stride
My right hon. Friend is absolutely right. We see that in inflation, which is running at about twice the Bank of England’s target and about twice the rate that this Government inherited from us on the day of the general election. Within that, we see food inflation rocketing up at over 4%, damaging and impoverishing the very people that Labour claims to want to stand up for.
Dr Andrew Murrison (South West Wiltshire) (Con)
Does my right hon. Friend agree that we also see hypocrisy? An example would be Cabinet Ministers who say “Build, baby, build” while at the same time writing letters to the Mayor of London trying to block homes in their constituency.
Sir Mel Stride
As usual, my right hon. Friend makes a characteristically poignant point.
There is another act of damage that this Government have created: some of the most successful high net worth wealth creators in our country have simply gone; they have left. It is estimated that 16,000 have gone over the time that this Government have been in office. Socialists will say, “Who cares? Good riddance!”, but they should dwell on the fact that the tax paid by those 16,000 people is probably equivalent to between a third of a million and half a million people on average earnings. Hard-working people up and down our country are paying the price of Labour’s policies.
There are choices; it does not have to be like this. We can reduce taxes if we get on top of and control Government spending. At my party’s conference, we set out £47 billion-worth of savings across Government, including £23 billion in savings across the welfare budget. What did the Government do when they tried to tackle the welfare budget? They showed us that this is a Dad’s Army of a Government with a Captain Mainwaring of a Chancellor. They are no match even for the rabble behind them.
We know that we need to have responsible tax cuts. That means that they need to be funded and they need to lean into growth. That is why we have announced that, were we in government, we would be abolishing stamp duty on primary residences. It is one of the worst taxes in our tax system. The OBR states that a 1% increase in stamp duty would lead to a decrease of between 5% and 7% in the number of transactions, yet on this Government’s watch, the stamp duty due on a home valued at £300,000 will have doubled during their time in office.
Dame Harriett Baldwin (West Worcestershire) (Con)
The shadow Chancellor is making a powerful speech. Is he aware that recently in the Treasury Committee we were given evidence by a range of tax specialists, all of whom endorsed abolishing stamp duty?
Sir Mel Stride
Yes, and I thank my hon. Friend for the excellent work that she has been doing on the Committee, particularly when she chaired it in the last Parliament.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
Does my right hon. Friend agree that this Government are not only taxing young people’s jobs but taxing their chances of owning a home through the increase in stamp duty and the rumoured increase on the capital gains on principal private residences?
Sir Mel Stride
My hon. Friend is absolutely right. The reasons that we need to abolish this tax include the fact that it stands in the way of younger people getting on to the housing ladder. To use the words of Paul Johnson, it “gums up” the entire system of house purchasing in our country. He said:
“It may look like a tax on wealthy people who move house but it also acts to reduce effective supply for everyone.”
That includes first-time buyers.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
My right hon. Friend is making an excellent speech. Does he agree that stamp duty also gums up mobility, so that people are unable to move, and if they lose their job under this Labour Government it will be more expensive for them to move to another house?
Sir Mel Stride
My hon. Friend is exactly right. The tax does precisely that. It stops people moving to where the work is, to get better jobs and further themselves. Who wants to move to one place and pay stamp duty, and then move to another to pay more stamp duty? It does not add up.
Dr Luke Evans (Hinckley and Bosworth) (Con)
Is my right hon. Friend aware of the study by Jackson-Stops, which looked at people aged 55 and over to see how much abolishing stamp duty would help to move the market along? The study estimated that in the first year, abolishing the tax would allow 500,000 people to downsize to free up homes for families, and in the second year, 1.4 million. Stamp duty is a real blocker. Does he agree that that study shows the power of this policy?
Sir Mel Stride
My hon. Friend is absolutely right. The tax is a blocker on the aspirations of those who are growing their families and simply want to find a home with more bedrooms. Often, they cannot find those homes because empty nesters—those whose children have left home—are not prepared to face the huge, eyewatering stamp duty involved.
Dr Scott Arthur (Edinburgh South West) (Lab)
Is not the reality that people cannot find homes in England because his Government failed to build them while in power?
Sir Mel Stride
We built 2.8 million homes since 2010, and a million in the last Parliament. It remains to be seen how many homes this Government will build.
Another huge advantage of abolishing stamp duty is that it will generate more transactions, which will benefit more plumbers, electricians, builders, designers, estate agents, surveyors and conveyancers, and allow local economies to thrive. Above all, it will increase the effective supply of housing, and that means a fairer society and a stronger economy.
Andrew Lewin (Welwyn Hatfield) (Lab)
The shadow Chancellor talks about the huge advantages of his proposal. Is he aware that someone who owns a home worth £2 million would benefit to the tune of £150,000? This is a tax cut for millionaires. Is that what he wants?
Sir Mel Stride
I have already apprised the hon. Gentleman of the fact that on his party’s watch, 16,000 high-net-worth people have left the country, to the huge detriment of our economy. We cannot tax our way to growth. We have to abolish this tax across the piece, and that is recognised by think-tanks across the political spectrum. Indeed, the Institute of Economic Affairs says:
“Abolishing stamp duty is the single best reform any government could make to Britain’s tax system.”
The Resolution Foundation, which may be more to Labour Members’ taste, says of stamp duty that it is
“one of the most economically harmful ways of raising revenue”.
That is a simple fact.
Bob Blackman (Harrow East) (Con)
Does my right hon. Friend the shadow Chancellor accept that the housing market is virtually stagnant? It is moribund. The houses and flats that we want in this country are not being built, and one of the barriers is that the cost of stamp duty is so high that individuals do not want to pay it.
Sir Mel Stride
My hon. Friend is absolutely right. I have already set out the estimate from the OBR that a 1% increase in stamp duty means a 5% to 7% reduction in transactions. It is a horrendous and terrible tax, and it remains to be seen whether Labour Members choose to defend it.
Saqib Bhatti (Meriden and Solihull East) (Con)
The hon. Member for Welwyn Hatfield (Andrew Lewin) talked about millionaires getting a tax cut, but we are talking about young families getting on the ladder. Does my right hon. Friend the shadow Chancellor agree that while Labour Members engage in the politics of envy, we will always engage in the politics of hope?
Sir Mel Stride
My hon. Friend is absolutely right. As Paul Johnson, formerly of the Institute for Fiscal Studies—I quoted him earlier—says, this tax
“also acts to reduce effective supply for everyone”
right across every age and every section of the income scale.
If only the Parliamentary Secretary to the Treasury, the hon. Member for Swansea West (Torsten Bell)—I see he is not in his place—who is a former director of the Resolution Foundation, could show some backbone and at least agree with his former self and the quote that I read out from the Resolution Foundation. The facts are clear: the Government should support this motion today if they believe in growth, a fairer society and a stronger economy.
As we approach the Budget, through a period of great uncertainty, the Chancellor faces a clear choice—a choice between still higher taxes, and controlling spending and getting taxes down; between continued anaemic growth and getting the size of the Government under control; between destroying jobs, and getting people off benefits and into work; and between doing the right thing for our country and simply ducking the challenge. The Opposition know what must be done, even at this late stage, to save our economy. Perhaps even the Chancellor herself knows, deep in her heart, that we are right. Yet is it not the truth that faced with the serried ranks of obstinate delusion arrayed behind her, she is just too weak to act? No plan, no backbone—no wonder that under this Government we are staring into the abyss.
James Murray
Speaking of amnesia, a lot of Conservatives have forgotten Liz Truss and are not prepared to talk about the impact she had.
Sir Mel Stride
Speaking of amnesia, would the right hon. Gentleman like to remind the House what the deficit was in 2010, when we first formed a Government?
Lucy Rigby
Thank you. I was pleased to hear the Liberal Democrats spokesman, the hon. Member for St Albans (Daisy Cooper), and others in the party say that they will oppose the motion. I wholeheartedly agree with her that it is fundamentally flawed.
To be clear, we are a Government of fiscal responsibility. Our steadfast commitment to the fiscal rules has brought stability to our economy and allowed us to boost investment by £120 billion over the course of this Parliament. The dividends of that approach, even after just a year, are already clear: the highest growth in the G7 in the first half of this year, cuts to interest rates, real wages rising more in the time since the last election than they did in 10 years of Conservative Government, record investments from overseas, and new homes and infrastructure progressing all over the country. That is a strong foundation to build on in the years ahead.
Today, we have debated a simple question of two visions for the country. Put another way, does this country go forwards or backwards? The Conservative party wants us to go back—back to its time in office, when Britain had a Government that pursued unfunded tax cuts and austerity, leading to soaring debt, low productivity, under-investment and anaemic growth. It was a Britain where we did not build infrastructure, including houses, and where far too many people were unable to get on the housing ladder.
This Government want the country to move forward. We are managing the public finances with stability and certainty in an uncertain world. We are a Government who invest in public services, our infrastructure and our communities, and work with businesses and local leaders to bring growth and opportunity to every part of the country. We are a Government who are building houses, including in areas of the country that the shadow Secretary of State—