It is a pleasure to speak under your chairmanship, Mr Betts, and to follow two superb speeches from my hon. Friends the Members for St Albans (Mrs Main) and for Esher and Walton (Mr Raab), both of whom have made points with which I agree completely; I will do my best not to duplicate the message that they have delivered, partly because I will not deliver it as well as they have. I will be interested to hear a thorough response from not only the Minister, but also the Opposition Front-Bench spokeswoman, because many questions have been asked about matters such as the mansion tax and the central issue of stamp duty.
We have a housing crisis in this country. No one argues with that. Home ownership is in historic decline, falling to the lowest levels since 1988. That matters if one cares about social harmony and stability and if one believes it important that people should have a stake in society. It could not be more important. We clearly need more homes, a big issue debated in the House on many occasions, and people need better access to finance, another massive issue that has already taken up a lot of time in the past four years that I have been an MP. I will not dwell on those issues today, however, because we have in front of us a simple but radical tool that, as my hon. Friends have pointed out, could make an immediate difference—the difference between affordability and unaffordability for a whole swathe of people.
The problems that have been highlighted are particularly acute in London, where the average first home price is some £330,000—squarely within the 3% stamp duty band, adding thousands of pounds to the bill. My constituency covers Richmond and north Kingston, but according to the latest figures for Richmond borough, 96% of homes are likely to be in the 3% band by 2017-18. It is worth repeating that of the total £4.7 billion
stamp duty yield in England, almost half is paid by those living in Greater London. Stamp duty could therefore fairly be described as a tax on London. Unsurprisingly, young people in London find it almost impossible to get a foot on the property ladder as a result. The surge in property prices means that the number of households paying stamp duty has more than doubled over the past decade. It is particularly punitive for first-time buyers, who are denied access to home ownership.
Rather than repeat all the excellent remarks that have been made, I am going to get straight to the point. I strongly support the campaign to reform stamp duty. We should absolutely abolish stamp duty for first-time buyers. I would set the threshold at £500,000, but there is a debate to be had about where it should be. It is worth remembering that in 2007 the Chancellor pledged to scrap stamp duty for first-time buyers up to a level of £250,000. The stamp-duty holiday was tried for a couple of years and ended in 2012. It is worth reminding the Chancellor that it was an important pledge at the time and is probably more important now than when it was initially made. He ought to revisit it, but more bullishly this time. We could form a consensus, certainly on this side of the House, at a threshold of some £500,000 for first-time buyers.
We should change how stamp duty works and move away from the brutal, nonsensical cliff-edge system that distorts the market, and we could form a consensus around that. We need to move towards a progressive system in which the increased rate from one band to the next applies only to the difference between the two bands. The current system makes absolutely no sense at all.
All that could mean a loss of revenue to the Treasury, but I doubt that. It would stimulate activity and have a positive impact. If it led to a decline in Treasury income, we could adjust rates for foreign buyers of UK properties and apply capital gains tax even to their primary residences, because the evidence suggests that overseas investors in bricks and mortar are having an impact on the housing market, particularly in London.
At the end of the day, we want people to get on the housing ladder, and the current stamp duty regime inhibits that. It inhibits something that every single person in the House would support. With minimal effort, the Chancellor could make the world of difference for countless aspiring home owners. I strongly urge him to do so.