I thank all right hon. and hon. Members for their contributions to this short debate on clause 1, and I shall attempt to address as many as possible of their questions. The hon. Member for Birmingham, Ladywood (Shabana Mahmood) raised a number of points about the impact of the changes. First, let me deal with her question about HMRC’s handling of inquiries. I do not have all the detailed numbers available, but, as I mentioned earlier, about 1.25 million hits have been made on the HMRC calculator, which is a substantial number. There have been relatively few queries made over the telephone or in writing. In practice the great majority of those can be dealt with by HMRC’s stamp tax helpline or by reference to ongoing guidance. More complex queries are escalated to HMRC’s technical specialists. As I say, I cannot give the numbers but I do know that the view within HMRC is that this process has gone smoothly, including in respect of the helpline provided on the day of the autumn statement, when, as has been pointed out, a number of transactions were accelerated in order to benefit from the transitional regime. All that has gone smoothly and I am not aware of any particular difficulties in that area.
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Let me now deal with the definitional issues the hon. Lady raised. Ideally we would have a single definition for all tax purposes, and this is not an issue specific to what we have before us today—it is a wider point. Different areas of the tax system have different purposes. The same definition will not necessarily serve all purposes adequately, and so some differences are probably inevitable. However, we do keep all aspects of the tax system under review and we will consider simplifying definitions where that is desirable and practical. I am not aware of any particular difficulties in this context, but it is always worth having another look at this point over time to see whether problems emerge.
On the point about non-residential property, it is worth pointing out that if we were to have exactly the same regime applied there, approximately 40% of tax-paying non-residential transactions would pay more. That would not be terribly attractive for businesses. If we examine the costings of such a move on a purely static basis—I shall return to costings points in a moment—by which I mean there is no behavioural change, we find that a switch to an identical system for commercial property
would be a substantial revenue raiser. It would raise about £3.6 billion, but that represents a substantial increase in the burden of SDLT on business and we do not believe it would be advisable. That is one reason why we have not gone down that route. So, inevitably, different regimes will apply for residential and non-residential property.
The hon. Lady asked whether the continuation of a slab structure for non-residential property could result in damage to business mobility. I make the point, of course, that the Government keep all taxes under review. Businesses incur costs from all manner of sources, of which SDLT is just one. The rates of SDLT in England and the land and buildings transaction tax in Scotland will differ owing to the natural consequences of devolution. It is unlikely that many businesses will move from England to Scotland, or vice versa, just because of changes in the SDLT or LBTT regimes.
My right hon. Friend the Member for Wokingham (Mr Redwood) and my hon. Friend the Member for Redcar (Ian Swales) raised the issue of costings, with my right hon. Friend rightly making the point that he was a strong advocate of reform in this area. We have to understand that a number of factors are involved in a change in SDLT in these circumstances. There may be changes in the number of transactions that occur depending on what is done with the rates. There may be changes in the value of the properties. To what extent will those changes be capitalised? There are also the changes in the amount paid per transaction. To make an assessment of how much will be raised or forgone as a consequence of these changes, it is necessary for the Treasury and HMRC and then the Office for Budget Responsibility to assess the behavioural changes.
To answer the point raised by my hon. Friend the Member for Redcar (Ian Swales), the challenge for the OBR and the reason why it has rated this as a medium to high risk is that there will always be a degree of uncertainty over the behavioural response. Will people be much more inclined to move property as a consequence of these changes? A number of assumptions are made. We believe that the costings are robust, sensible and essential.
The overall impact will be additional revenue being raised at the top end—those transactions above £937,000 where a higher rate would apply. Even accepting that there may be an impact on the number of transactions and on property prices, the changes in the amount of stamp duty paid per transaction will mean that the overall effect will be to bring in revenue. But the reverse process applies for the vast majority of transactions where there is a reduction in rates. We may see more transactions and prices increasing slightly, which means that a slightly higher amount of SDLT will be paid. But the overall effect will be less revenue from those areas.