James Sunderland backs the Bill to temporarily cut stamp duty as an incentive to get the housing market going again but urges the Chancellor to conduct a wider review to ensure it is focused on incentivising those starting on the housing ladder and encouraging social mobility.
It is always a pleasure to follow my hon. Friend the Member for Newbury (Laura Farris), who is a fellow Berkshire Member.
The Chancellor’s summer statement was just what the country needed to kick-start the economy out of its doldrums. With coronavirus impacting a falling housing market, his decision to temporarily cut stamp duty until March 2021 was the right thing to do, and I welcome the Bill. However, far from just allowing purchasers to save their cash, this measure offers a real incentive to get our housing market going again and for people to spend what they save. It also allows our builders to get building—not just in the already congested south-east but to level up with real investment right across the UK.
One of the indicators of a recession is falling confidence in the property sector, with homeowners becoming more entrenched. The path ahead will not be easy, so the priority is to launch a pre-emptive strike that incentivises everyone to grab the opportunities that lie ahead. The imperative, therefore, is to support people, jobs and the economy by catalysing the housing market and boosting business confidence by driving growth. Raising the threshold at which stamp duty applies, from £125,000 to £500,000, means that more than 90% of those getting on to or moving up the property ladder will pay no stamp duty at all. In addition to the measure being a serious tax break for the majority, those who can most afford it will still be required to pay their share of duty above £500,000, and it is right that a progressive system of taxation remains in force.
What does this really mean for those who stand to gain most benefits? Take Bracknell as the classic example of a modern, vibrant and rewarding place to live. Nestled between the M4 and the M3 in east Berkshire, Bracknell is characterised by near full employment, one of the lowest rates of council tax in the country, a strong job market, high-tech research and development facilities, and an abundance of international companies. Although it has taken a hit during the pandemic, I remain confident that Bracknell will bounce back and that its previous optimism for the post-Brexit economy will return.
I urge the decent, hard-working and pragmatic people whom I proudly represent to look ahead with confidence. Although the average house price in Bracknell is an eye-watering £325,000, the temporary cut in stamp duty will result in a direct saving of more than £5,000 for all those who buy at that level. Of course, if someone is starting on the housing ladder or looking to move up it, they will not have to pay anything on a property worth under £500,000. That is a massive incentive for anyone who aspires to save for a deposit, start a family, build an extension, get a better job or simply move to a bigger house, and it will mean more money in their pocket. Therefore, as well as boosting the economy at a time when it is most needed, the Government will continue to allow people to keep most of what they earn, through fair and progressive taxation that incentivises entrepreneurship, hard graft and enterprise. Indeed, for those in any doubt, the Conservative party remains the party of working families, and this is just another example of what can be done when the country most needs it.
Of course, no cut in stamp duty can be an indefinite blank cheque, as it is still necessary to raise the necessary revenue to pay for our public services. However, further concessions might be possible. I therefore urge the Minister to consider some further tweaks. First, several of my constituents have written to me urging for the cut in stamp duty to be backdated to the beginning of the pandemic. I do not know whether that is precedented, fair or possible for a new policy, but it is one to be considered.
Secondly, stamp duty is a drag on the housing market, and any continued relief beyond March 2021 is to be welcomed. I therefore urge the Minister to consider tax measures that encourage rather than hinder social mobility. Increasing the threshold further or spreading payments out over a longer period may be beneficial.
Lastly, further refinement could be considered for those who are resident in the UK as UK citizens, as opposed to overseas investors or those purchasing second homes. While we must encourage foreign investment and entrepreneurship right across our post-Brexit nation, taxpayers who can afford to pay more should do so, if we are serious about incentivising those just starting up the ladder. Aspiration through hard work and enterprise must be rewarded.
To conclude, I welcome the Bill and salute the Chancellor for his unprecedented, generous and unparalleled support for our economy. Cutting stamp duty in the short term is absolutely the right thing to do, but I also urge him to conduct a wider review so that this tax goes further in what we ask it to do.