Thank you, Sir Roger. It is a pleasure to serve under your chairship this afternoon. I was not perplexed at all.
When we debated the Bill on Second Reading in October, the stamp duty cut that it seeks to introduce was one of the last few measures to have survived from the Tories’ reckless mini-Budget in September. As we said at the time, we oppose the stamp duty cut because it would not be the right way to spend public money and would not be responsible. On the back of 13 years of economic stagnation, our economy has just suffered long-term damage from the Tories’ recklessness at the end of last year. We made it clear that spending £1.7 billion a year on the proposed stamp duty cut simply could not be justified.
In October, as hon. Members may remember, there was a last-minute flip-flop in parliamentary business. Four days before we were due to debate all stages of the Bill, the Leader of the House announced that we would debate only its Second Reading. No reason was given for that last-minute change to parliamentary business, so we speculated that the decision might have been intended to give the new Prime Minister and his Chancellor the chance to change their mind about these stamp duty changes. That is indeed what has happened.
Rather than reversing the stamp duty cut altogether, however, the Government’s amendments seek only to impose a time limit on it. Ministers could have used the breathing space since last October to do the right thing and scrap the stamp duty cut, but instead the Chancellor proposes only a partial U-turn. Government amendment 1 will amend clause 1, imposing a sunset date of 31 March 2025. The Government’s other amendments, which are consequential on that change, include an amendment to the name of the Bill.
The Opposition remain opposed to the stamp duty cut. Even if Government amendments 1 to 14 are agreed to, the Bill will still represent a failure by the Conservatives to spend money wisely.
We are not talking about a small amount of money: the Government’s own figures make the Bill’s price tag clear. Even if the stamp duty cut is time-limited, it will still cost taxpayers £3.2 billion. We are serious about spending public money wisely, and the Government should be as well. For that reason we will vote against the Bill on Third Reading even if it has been amended, but before we reach that stage we still want to use this Committee stage to interrogate the Government on some of the detail, and to urge them at least to amend its provisions if they are not willing to drop it entirely.
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Clause 1(1) sets out the headline changes in stamp duty thresholds, while subsection (5) amends the specific thresholds for first-time buyers and the maximum amount that they can pay for a house and still be eligible for relief. We believe it is crucial to help first-time buyers get a foot on the property ladder, and that is something that the Minister mentioned very recently, but we have to say that after 13 years of Tory government during which home ownership rates have fallen, first-time buyers need more than a stamp duty cut to be given any hope of being able to buy their homes.
However, it is not just Labour Members who are saying that. The head of residential research at Savills, the estate agent, was quoted in the Financial Times as saying, on the day of the autumn statement, that higher borrowing costs were likely to overshadow any impact
of the tweaking of stamp duty thresholds. We accept that the interest rate on the average two-year fixed-rate mortgage has risen from 2.3% in December 2021 to 5.75% a year later, but any savings from the stamp duty cut pale into significance in comparison with the higher mortgage bills that people will face for years to come as a result of the Conservatives’ economic recklessness.
The truth is that a stamp duty cut seems to be all the Conservatives have to offer first-time buyers, beyond bad news about mortgage rates. In fact, even that stamp duty cut will not benefit swathes of people across the country: an analysis carried out by the Resolution Foundation has shown that the Bill’s changes to first-time buyer’s relief will be of no benefit to the average first-time buyer outside London and the south-east. However, while many first-time buyers will see no saving from the stamp duty changes, clause 1(3), which increases the threshold for people buying second and additional homes, will ensure that second home buyers, or landlords buying additional properties, will receive a tax cut of up to £2,500 on each transaction.
Surely that is the part of the Bill that Ministers must struggle hardest to defend. Even if the Government are determined to retain stamp duty cuts overall, surely they can see that a cut targeted at second home buyers is not the way in which public money should be used. I therefore urge the Government at the very least to support our amendment (a) to Government amendment 1, along with amendment 15, which would prevent a tax cut from applying to buyers of second and additional homes.