Clause 10
Finance Bill
1:30 pm
David Gauke (Shadow Minister, Treasury; South West Hertfordshire, Conservative)
I welcome the Economic Secretary to his first participation in this year’s Finance Bill. As he has stated, clause 10 raises the stamp duty threshold from £125,000 to £175,000. More precisely, it extends the existing holiday to 1 January 2010, rather than 2 September 2009. It is not a dishonourable action for the Government to try to help the housing market, so our criticisms are not of the proposal’s intention. However, I wish to voice a number of concerns before discussing new clause 3.
We must highlight how the policy of a stamp duty holiday emerged. The Sun headline on 5 August read, “Brown to scrap stamp duty”. It was very clear that the proposal was a personal initiative of the Prime Minister’s, and I am sure that the story caused much delight in No. 10 Downing street, if not in No. 11 too. One suspects that Mr. Damian McBride may have been involved in the story’s publication, as it was written in a way that reflected well on the Prime Minister. Unfortunately, however, the policy had a disastrous effect on the housing market that August; a number of transactions collapsed throughout the country. An estate agent in Berkhamsted in my constituency told me of a number of transactions that had collapsed. Why would people have wanted to enter into a transaction when house prices were already falling and when they knew that a more beneficial stamp duty regime was just around the corner?
The details were not very clear at that point. The Sun headline, as I have said, read, “Brown to scrap stamp duty”, which seems exaggerated to say the least. I did not buy a copy of The Sun that day, but I recall listening to the Chancellor of the Exchequer being interviewed by James Naughtie on the “Today” programme on the proposal for a stamp duty holiday of some sort. The Chancellor, for understandable reasons, gave a non-committal answer and, as a consequence, there were criticisms of the confusion within the Government.