Stamp Duty Land Tax (Reduction) Bill

Selaine Saxby Excerpts

Committee stage
Tuesday 10th January 2023 Commons Chamber

On that point I will close my remarks. This Bill presents a great opportunity to debate a such big issue; I hope the Government, if they are as radical as they say they are, will come forward with some proposals to abolish stamp duty land tax. I think that would be a very popular manifesto commitment.

[Selaine Saxby (North Devon) (Con)]

When this Bill was previously before the House, on 24 October last year—indeed, on the day we last changed Prime Minister, so it was under a different Treasury Minister—I asked the Treasury to analyse the potential harms caused by excessive second home ownership and holiday lets. I thank the Minister for her ongoing engagement on this issue, as well as the rest of the Treasury team. I have spoken to them on numerous occasions about the many complex taxation issues causing an imbalance in our housing market in constituencies such as mine, which I hope we can take steps to address in the coming months.

We know that when stamp duty was last reduced post pandemic, it generated a surge in short-term holiday lets and second home purchases. Indeed, 25% of purchases in my North Devon constituency during that period attracted the higher rate of stamp duty as an additional dwelling. However, we have no information on what proportion might have been long-term buy-to-let landlords. Alongside the many challenges in our North Devon housing market, we have seen a 67% decline in private rentals, with a surge in section 21s enabling landlords to take advantage of the tax inequalities between long and short-term rentals.

We desperately need to find a way to encourage buy-to-let landlords. The complexity of paying the 3% levy for an additional dwelling is, in many ways, a distraction from a Bill designed to help first-time buyers in particular on to the housing ladder. The removal of stamp duty saves thousands for anyone buying their first home—up to £425,000 at this time. When the numbers are fully analysed, in this legislation the maximum benefit to somebody buying an additional dwelling is just £2,500. We need to be just a bit realistic about whether that will be a large enough sum to motivate a change in behaviour in people who are buying additional properties—their second, third or fourth home.

For more than two years now, I have stood up in this House and asked for steps to be taken to tackle the housing crisis in North Devon. The Levelling-up and Regeneration Bill has now been amended to reflect the concerns of constituencies such as mine. Indeed, it is good to see Conservative-run councils in Devon and Cornwall taking steps to adopt measures in that Bill to double council tax on second homeowners. It is disappointing that Lib Dem-run North Devon Council has not taken such steps, but I remain optimistic that it will.

I very much hope that the paper I have submitted to the Treasury on behalf of Conservative colleagues—it includes many suggested changes to the tax system to tackle the imbalances between long and short-term rentals, and to continue making it easier for local families to buy and rent in places where they grew up or where there are huge numbers of job vacancies for them—will pave the way to looking more closely into the matter. I hope that the Treasury team’s door will remain open to MPs to meet and tackle this issue.

[Victoria Atkins]

May I place on the record my personal appreciation of the intensive work that my hon. Friend has put into this issue on behalf of her constituents and the wider south-west? Many south-western MPs are concerned about this issue, including—dare I say it—hon. Members from the Whips Office, who cannot stand up and speak. I am extremely alive to the issues that she raises. I wonder whether she would do me the favour of coming to see me at the Treasury over the coming months so that we can discuss further the issues in her constituency and the interesting ideas she has put forward.

[Selaine Saxby]

Nothing would give me more pleasure than to go back and speak with the Minister about these matters. We all worry about why the NHS is struggling to recruit. I can quite definitively tell people here today that the public sector struggles to recruit in North Devon because of the housing crisis.

We on the Conservative Benches are keen to tackle this issue. Yesterday’s cross-party drop-in session was hugely helpful. We heard from the officials behind the legislation, as well as from the Minister. It is just a shame that Opposition Members did not turn up—not one of them. They have tabled a number of amendments to the Bill, but do we really need to put reviews into legislation? One cannot help but wonder whether such amendments are politically motivated rather than aimed at delivering real change to constituencies that urgently need their housing markets to be rebalanced.

[Anthony Browne (South Cambridgeshire) (Con)]

It is an honour and a delight to follow my hon. Friends the Members for North Devon (Selaine Saxby) and for Christchurch (Sir Christopher Chope). May I say at the outset that I completely agree with my hon. Friend the Member for Christchurch that you should be Sir Nigel, Mr Evans? If I call you Sir Nigel, will I have as much time to speak as my hon. Friend?

It is a pleasure to speak because, as the chair of the Back-Bench Treasury committee, I have done a lot of work on stamp duty policy, and I have had a slightly perverse interest in stamp duty for the last decade or so and written various policy papers and research reports on it. We all support raising the level of home ownership. In fact, rates of home ownership started to decline under the previous Labour Government. There is a home ownership gap of about 5 million people who want to own their own home but cannot. I will support all measures—well, pretty much all measures—to increase home ownership. Clearly, we are teetering on the brink of recession and need to promote economic growth, so I very strongly support the broad thrust of the Bill in cutting stamp duty to help people get on to and up the property ladder and to stimulate economic growth. I have some reservations about the proposal being temporary and about it applying to second properties.

I will address some of the key themes of stamp duty policy. We have heard various calls today—not least from my hon. Friend the Member for Christchurch—to abolish stamp duty outright, and in fact, I have called for that before. But it is not just Conservative MPs who think that stamp duty should be abolished outright; the Institute for Fiscal Studies, on whose advisory council I sit, talked in its magisterial work on taxation policy—the Mirrlees review—about all the damage of stamp duty and called for it to be abolished.

Lord Macpherson, a former permanent secretary at the Treasury, gave evidence fairly recently to the Treasury Committee, on which I sit, about tax policy. He highlighted all the damage that stamp duty did to the economy, for many of the reasons that my hon. Friends the Members for Christchurch and for South Thanet (Craig Mackinlay) set out earlier. Lord Macpherson certainly would not be sad to see its demise.

I want to raise a slightly more nuanced point than the outright abolition of stamp duty, which would lead to a big problem with revenue, as it raised £14 billion last year in total—about £4 billion for commercial property and £10 billion for residential. That would be a hole. My more nuanced argument is that people buying houses to live in are overtaxed, but people buying properties either as second homes or for investment are undertaxed. Exactly 10 years ago, in 2013, I wrote a paper arguing for a higher rate of stamp duty for people who are buying homes not to live in. Fundamentally, homes are for living in. Two years later, the Government introduced that policy. It is now the additional premium. I do not think the Government introduced it in the right way and there are all sorts of problems with it, but I will not go into detail on that now. The stamp duty regime at least recognises the difference between people buying properties for investment or as second homes as opposed to people buying properties to live in as their homes. That tilts the property market in favour of those buying homes to live in, which is welcome.