Stamp Duty Land Tax (Temporary Relief) Bill

Sarah Olney Excerpts

2nd reading & 2nd reading: House of Commons
Monday 13th July 2020 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

I should declare an interest, in that I moved house earlier this year, about four weeks before lockdown started, when the purchase of a family home in a constituency whose house prices are significantly above average meant that I paid a fair chunk of change in stamp duty. Given that this year, more than any other, we have all had cause to be grateful for and celebrate our public services, I am glad to have made that payment and to have been able to support our NHS in such a way. Having had that experience, I have had a lot of thoughts about stamp duty as a tax, not all of them supportive, as I do not think it is a very fair or efficient tax. As the representative of a constituency with considerably higher than average house prices, it is a tax that affects my constituents far more than most. However, I am standing here today to oppose this cut, because in the current circumstances I have to ask: is this the best use of the £3.8 billion that the Chancellor will lose in revenue as a result?

I have heard from estate agents in my area—again, we have a reasonably healthy housing market in Richmond Park—and they are telling me that, even before the announcement last week, they were beginning to see a healthy return of interest from potential buyers. I am sad to say that that is probably because, as we know, the three drivers of the housing market in normal times are death, divorce and debt. I do not need to explain to anybody here, because they will all have seen it in their constituencies, why those three particular drivers of the housing market have been so prevalent this year and will continue to be so next year.

I am not entirely certain that the housing market is the sector we really need to be supporting with our tax revenue at this time. As I say, even without the stamp duty cut announced last week, we were already starting to see the revival of the housing market and all those associated industries that the Minister mentioned in his speech—the solicitors, the removal firms and all the construction firms such as plumbers, bathroom fitters and associated industries. They were already starting to come back, and there is huge pent-up demand from people like me. I bought a house in February with the intention of doing it up, and I have to tell the House that this has been a very frustrating three months for me: I really want to get a new bathroom very soon, and I plan to do so.

I am not certain that the housing market is the market that really needs supporting at this time. I am not certain that the construction market and the other markets that the Minister referred to are the best uses of this money. I pay tribute to the hon. Member for Mitcham and Morden (Siobhain McDonagh) and support what she said. When we think about the individuals who are most in need of Government support, it is not those who are able to secure mortgage finance. In the mortgage market, people have to have a fair amount of money already in the bank to put down a deposit, but they also have to have a reasonable expectation of future income in order to be able to service a mortgage.

I think we can all agree that unemployment undermines the housing market more than anything else—more than the need to pay stamp duty. We all know that because we saw it last week—even the day after the Chancellor’s statement, we saw some of our major retailers announce job cuts—and we all know that there is more to come. That, far more than anything else, is going to undermine our housing market and with it all the sectors the Minister mentioned.

We know that unemployment is the biggest drain on our economy, and we all know that there have been sectors and individuals that have struggled far more than others during this time. I just want to draw attention again to that group of people—we estimate there to be about 3 million of them—who were left out of all plans for support. As summer turns to autumn, when their mortgage holidays end or when their landlords are no longer barred from evicting them, they face real fears about how are they going to pay their mortgages or rents, as well as about the businesses they set up or the new jobs they accepted at the beginning of this crisis. In my constituency, I have a lot of people who were on contract work. All that has fallen away, and they have had no income now for months and months.

[Jacob Young (Redcar) (Con)]

Would the hon. Lady concede that those people she is talking about are exactly why we need to get the housing sector going again? Those self-employed people who work as plumbers and electricians, who may not have been eligible for some of the support the Government offered, are the reason why we need to do this.

[Sarah Olney]

No, I would not concede that, and I will tell the hon. Member why: it is because we are talking about sectors that are not going to be improved or helped by a revival of the housing market. A lot of people in my constituency are working in the creative industries, for example.

[Siobhain McDonagh]

I am not sure whether the hon. Lady saw the article in The Sunday Times yesterday identifying not only first-time buyers as people having problems in securing mortgages, but self-employed people, because of banks and building societies being concerned about their future incomes.

--- Later in debate ---

[Sarah Olney]

I thank the hon. Lady for making the point better than I could, in response to the hon. Member for Redcar (Jacob Young), because it is precisely that: uncertainty about people’s futures is the biggest barrier to their securing the kind of mortgage finance they will need to purchase a house, stamp duty or no stamp duty. That is the absolutely crucial point, and it is why I am asking the Treasury whether it thinks the £3.8 billion could have been better spent.

To refer back to those self-employed people, some of them could have been helped. Some people have benefited from the furlough scheme and have been entitled to up to £2,500 a month. Some of our self-employed people have missed out on support, but they could have had that £2,500 a month for three months: we could have helped 500,000 of them with the £3.8 billion that we are spending instead on this stamp duty holiday. That is really important because, apart from anything else, we are talking not just about self-employed people, but about company directors and people who have set up recently, and they are the people who will be creating the jobs of the future. They will be the engine of this recovery. They are looking at the new opportunities available in the post-coronavirus world, and they have the energy, enthusiasm and the get-up-and-go to start rebuilding business and our economy in a way that I believe would have happened anyway with our housing market. By not helping those people, we limit the prospects of new business, which is the engine of new jobs, and we destroy livelihoods. That will stimulate the housing market because those people will now have to sell their houses because they cannot pay the mortgages that they secured on them. I do not believe that that is quite what the Minister had in mind.

Above all, the feeling among so many self-employed people and company directors that I have been speaking to is that we have undermined their confidence, and that will ultimately be the biggest impact of this. They thought that that this was a Government who prized entrepreneurship, supported small businesses and wanted companies to thrive, and I am so disappointed, after everything that has been said in this place by so many MPs across all parties. My hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) set up his all-party group on this issue last week and has 200 MPs representing their constituents who have been excluded. I cannot tell the House how disappointed I am that after all that, the Chancellor of the Exchequer came to the Dispatch Box last week and announced this stamp duty cut instead of proper, real support for the people we are going to be depending on in the weeks and months to come.

However much I personally feel that stamp duty is a bad and wrong tax, I still say that the £3.8 billion could have been better spent at this time, and I am really disappointed that the Government did not take that opportunity.