Stamp Duty Land Tax (Reduction) Bill

Toby Perkins Excerpts

Committee stage
Tuesday 10th January 2023 Commons Chamber

[Sir Christopher Chope]

This is the challenge, because some people think that this would adversely affect them. When we were looking at whether we should change the domestic rating system, we always faced the problem of the people who were going to be worse off, who were always the losers and who were going to complain. I accept that, were this to be implemented in the way I am canvassing, it would create some losers who would be unpleasantly surprised. That leads me to my belief that SDLT and stamp duty should be abolished altogether. [Hon. Members: “Hear, hear.”] That is an issue on which we, as real Conservatives who believe in a homeowning democracy, should be able to agree—and it seems from that response that we can agree on it—rather than dividing again in trying to find an alternative to an already unsatisfactory tax.

Let us remind ourselves that, in the 1980s, when we had the beginnings of the property-owning democracy revolution, with more than 50% of people in the 25 to 34 age group being homeowners, we had a stamp duty regime where the maximum rate to purchase any house was 1%. Since this process started under the Blair Government and continued with the coalition—the Treasury is always seeing this as a cow to be milked for taxpayers’ benefit—the proportion of people able to afford to buy their homes has declined significantly. So the challenge I make to the Government, and I hope the Minister can respond to this, is: if we put stamp duty back to 1% as a maximum, what would that do to increase the number of transactions in the housing market, which, as others have said, is ostensibly the Government’s agenda?

On 23 September, HMRC’s policy paper “Stamp Duty Land Tax Reduction” set out the following policy objective:

“This measure is part of government’s commitment to support homeownership and promote mobility in the housing market, in turn supporting economic growth. Increased property transactions also add to residential investment and spending on durable goods.”

Unfortunately, that was withdrawn on 28 November. It would be interesting to know whether that policy objective has been retained by the Government even though the HMRC policy paper has been withdrawn. Another paper issued on 23 September was “The Growth Plan 2022”, which I thought was great, as did many of my constituents. Paragraph 3.30 of the plan stated that the changes to SDLT would

“take 200,000 homebuyers, including 60,000 first-time buyers, out of SDLT entirely.”

Today, however, we are discussing a proposal by the Government, by way of amendments to the Bill, that would put those 200,000 home buyers, 60,000 of them first-time buyers, back into SDLT. Do we really want to do that? Do we really think it will help to move the housing market, boost growth and help people to have the mobility to get to new jobs?

This is not just about people being able to move to a new job by moving house; we also need to think about the damage to the environment being done by the large number of people who are now, having no alternative, being forced to engage in long-distance commuting. Last week, I visited a school in my constituency. The teacher showing me around has been driving regularly from Wales to do a great teaching job in the Christchurch constituency. Fortunately, she is about to move into the constituency, but that is after many, many months of that long-distance commuting. That is highly undesirable. It is bad for the environment and bad for the people involved, because it means that they are sitting behind the wheel of a car for far too long during the working week.

Stamp duty land tax is targeted against homeowners and it will have an adverse effect on labour mobility. Yet the Prime Minister, in his speech on 4 January, was complaining—I agree with him on this—that a quarter of our country’s labour force is inactive and, in this Bill, he is introducing an additional tax on the very mobility that he should be espousing. As my hon. Friend the Member for South Thanet has said, SDLT is a tax on downsizing: it makes it much more difficult for anyone to receive a significant return by selling a larger house and purchasing a smaller one.

My biggest complaint, though, is that the provision hits hardest those for whom homeownership is least affordable. The latest figures, produced by the House of Commons Library in December, show that, in Christchurch, the average house price is now 11.8 times earnings. The national average in England and Wales of eight times is bad enough, but why are we imposing that extra burden on those buying houses in places such as Christchurch? The latest figures from the 2021 census show that the dream of a homeowning democracy espoused by generations of Conservative politicians since Margaret Thatcher, and first raised in 1975, is not one of this Government’s priorities.

[Mr Toby Perkins (Chesterfield) (Lab)]

Hear, hear.

[Sir Christopher Chope]

I think it is very sad and embarrassing that His Majesty’s loyal Opposition should be crowing at that statement.

--- Later in debate ---

[Mr Perkins]

Just to clarify, I am not remotely crowing. I entirely agree with the hon. Gentleman. This Government have hugely failed on allowing people to buy their own homes. It is a national disgrace. I support what he is saying; I am not remotely crowing.

[Sir Christopher Chope]

I accept that I used the wrong expression in suggesting that the hon. Gentleman was crowing. But may I set out the basis on which I have these concerns? In the Prime Minister’s speech on 4 January, there was not one mention of the word “housing”, let alone any mention of the expression “home ownership”. Why is that? We obviously have a real crisis in housing and home ownership on our hands. We are facing a potential fall in house prices this year—predicted by Oxford Economics to be about 12%, but who knows? Having stamp duty land tax, even at temporarily reduced levels, will mean that the burden of the reduction in house prices will be borne by those people trying to sell to a greater extent than would otherwise be necessary, because potential purchasers will have to budget for making SDLT payments to the Government.

You can tell, Mr Evans, that I am very concerned about the Bill. When I see that the Prime Minister has declared that the people’s priorities are the Government’s priorities and that we will rebuild trust in politics through action, all I can say is that I do not believe that the new measures in the Bill accord with the people’s priorities because I think those priorities are for a permanent reduction in stamp duty land tax and even, potentially, the abolition of that tax, rather than reintroducing it at a higher level in 2025.

When I was talking earlier today to a member of the Government’s Treasury team, I was told that one reason why my amendment (b) could not be accepted by the Government was that it had not been cleared by the Office for Budget Responsibility. I ask rhetorically, “Who is in charge?” Are we really saying that the Office for Budget Responsibility is able to forecast things to the extent of £1 billion here or £1 billion there? I do not think it can, and if that is the best that the Government can do in arguing against amendment (b), I hope they will think again about whether to accept it.