“I thank the Minister for the statement, and for the support for getting our housing market going again, particularly when it comes to brownfield sites; proposals for many of them are still being held up right across the country. He says that he will not at this stage make NDMPs statutory. Many people across the sector would like him to do so, because of the extra certainty it would provide. When he talks about the risk and uncertainty of taking that approach, what does he mean? If he will revisit this question, when might he do so? What will he be looking at when he potentially makes the decision to revisit that question?”
Spoke in 27 debates
Government Finances
Stamp Duty Land Tax
“I am glad that the right hon. Gentleman has asked me to comment on the 14 years of Tory failure—years in which his party failed to grow the British economy and created a number of the problems that the country faces. While the shadow Chancellor made many good remarks in his opening speech, there was a little bit of amnesia about the state of affairs that was left to this Government. However, we do need an honest conversation about tax reform, including reform of property taxes. We have spoken a little about what the Institute for Fiscal Studies has said, and the IFS is right. The UK essentially relies on two big but fairly broken property taxes. Council tax does not create the distortions that stamp duty creates, but it is regressive; stamp duty creates distortions, but it is at least progressive, and mitigates some of the regressive elements of council tax. If we look at only one half of the equation and simply cut stamp duty, we will tilt the system further in favour of the wealthiest households, many of them in London and the south-east, while telling lower and middle-income families elsewhere that there is nothing in the system for them. We should consider just how unfair council tax has become. Given that the top band is capped so lightly, the bill for a modest family home in the north or the midlands can be similar to that for a multimillion-pound townhouse in London. Paul Johnson, formerly of the IFS, has already been quoted, but let me read out a tweet from him: “Buckingham Palace, valued at around £1bn, sits in band H and is charged £1,828 by Westminster City Council, less than an average three-bedroom semi in Blackpool...46% of households in England will receive a bigger council-tax bill than the Palace.” That is clearly a broken tax system, and if we ignore that and focus solely on stamp duty, we will only make things worse. Moreover, because successive Governments have not had the bravery to revalue, the tax bands are still based on 1991 values. In 1991, Tim Berners-Lee had just invented the world wide web, Nirvana had just released “Nevermind”, Will Smith was filming the first series of “The Fresh Prince of Bel-Air”, and I had not been born. A lot has changed since then, yet we have still not reformed the way in which we carry out council tax valuations. So yes, I agree that we should set a path to reducing stamp duty and ultimately reform the way in which we deal with it, but that should be part of a broader package that shifts tax away from transactions and towards ongoing occupation of higher-value properties. It could include revaluation and re-banding of council tax, so that bills reflect today’s values. There could be a higher rate or surcharge for the most expensive properties, and targeted reliefs to support downsizers and first-time buyers.”
