Stamp Duty Land Tax (Reduction) Bill

Richard Fuller Excerpts

2nd reading
Monday 24th October 2022 Commons Chamber

[The Economic Secretary to the Treasury (Richard Fuller)]

I thank Members for their contributions to the debate. At its start, my hon. Friend the Exchequer Secretary to the Treasury set out the critical importance of the Bill and the Government’s cut to stamp duty land tax. The Bill is important to home movers and to first-time buyers; it is important for jobs and businesses connected to the property industry; and it is important for our economic growth. Stamp duty land tax at high levels can reduce a household’s willingness to move. This tax cut will enable more people to move home each year, which will, in turn, boost economic growth through the businesses and jobs the property industry supports.

The Labour Opposition spokesman, the hon. Member for Ealing North (James Murray), made points about the cost of mortgages due to recent economic uncertainty and interest rate rises. I just point out to him that interest rates and mortgage rates have been rising since last autumn in response to global trends, including Putin’s illegal invasion of Ukraine, and the UK is not immune to these trends. Crucially, interest rates are not solely rising in the UK; the US Federal Reserve has been raising its base rate since March 2022.

[Karl Turner (Kingston upon Hull East) (Lab)]

I just want to be clear: how sure is the Minister that the new Prime Minister is not going to overturn this stamp duty stuff?

[Richard Fuller]

I am more sure of that than I am that I will be in my position tomorrow. This is a serious debate and an important point about mortgage rates has been made. I am just trying to point out the two issues: rates have been rising since autumn; and this is a global change in interest rates.

Our stamp duty cuts will help the situation by reducing the up-front costs of moving. This Bill will save a family moving into an average home in England £2,500. As the Exchequer Secretary mentioned, we are returning money that can be spent to help cover moving costs, improvements, new furniture or appliances.

The Opposition spokesman asked questions about the processing of the Bill, but he missed the fact, of course, that the stamp duty change is already in effect and the Government are continuing with the legislation. The right hon. Member for Hayes and Harlington (John McDonnell) made some good points about house building. I just point out to him that in 2019-20 almost 243,000 net additional dwellings were delivered, which was the highest amount in nearly 20 years; and that at the spending review 2020-21 the Government confirmed £11.5 billion of funding for the affordable homes programme from 2021-22, which is the largest cash investment in affordable housing for a decade and is providing up to 180,000 new homes across England.

The hon. Member for Westmorland and Lonsdale (Tim Farron) repeated the points he made earlier about issues to do with purchasing additional property. I just repeat that the Government’s stamp duty cut will ensure that about 43% of purchases each year will pay no SDLT whatever and that none of those will be purchases of second homes or buy to lets.

The hon. Member for Hampstead and Kilburn (Tulip Siddiq), in closing for the Opposition, said that the Government somehow seem to be encouraging foreign buyers and she talked about introducing a charge for foreign buyers. I just remind her that there is already a 2% charge for non-residents on SDLT.

Let me conclude by reminding this House of what this Bill is all about. It will mean that about 43% of transactions—

[John McDonnell]

Will the Minister look at the issue of the 100% offset that incorporated landlords now have against profits?

[Richard Fuller]

Of course I am happy to look at all suggestions, including the one the right hon. Gentleman has made.

This measure will mean that around 43% of transactions each year pay no stamp duty whatever, which will help to support the housing market. I say to both Opposition spokesmen—the hon. Members for Ealing North and for Hampstead and Kilburn—that as result of this measure first-time buyers in their constituencies who would not have qualified for zero stamp duty will now qualify, and Labour will today be voting against that. I would also say to the right hon. Member for Wolverhampton South East (Mr McFadden) and the hon. Member for Leeds West (Rachel Reeves), the shadow Chancellor, who are not in their places, that the average mover buying the average house in their constituencies would not have qualified for zero-rate stamp duty land tax before this measure, and Labour will again be voting against that tax cut today.

This measure will boost labour mobility, support hundreds of thousands of jobs and businesses, increase transactions to boost the property industry, and continue the Government’s record of supporting people, including younger people, into home ownership. For those reasons, I commend the Bill to the House.

Question put, That the Bill be now read a Second time.