New Clause. — (Stamp Duty: House Purchase.)

Part of Orders of the Day — FINANCE (No. 2) BILL – in the House of Commons at 12:00 am on 6th July 1965.

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Photo of Mr Edward Heath Mr Edward Heath , Bexley 12:00 am, 6th July 1965

Apparently I misunderstood the point the hon. and learned Gentleman was trying to make from it. Therefore, we are agreed that in London and the South-East, an area containing nearly 20 million people, the figures are already above the present limit of exemption. That seems a powerful argument for raising the limit to £5,000.

A second argument is that £5,000 is the limit fixed by the Greater London Council for granting mortgages. This seems to be the decision of a Labour authority of what the level should be up to which special help should be granted, and it reinforces my hon. Friend's argument that £5,000 should be the figure at which action ought to be taken.

The main reason for doing it is to encourage people to buy their own houses. Although it may not seem a considerable sum when taken in the context of buying a house, the point has been made already that this is a considerable proportion of the initial payments one has to make when buying a house. This is its real importance, and the real argument for reducing it.

My hon. Friend has drawn attention to the sudden jump over £6,000, but there is also a very sudden jump over £4,500. If a person buys a house for £4,450, instead of being exempt, he is immediately required to pay £22 15s. in this tax. This seems to be unjustifiable, and, on looking at the whole situation, it is difficult to understand why the graduated process has not been introduced earlier. I think it is due to the fact that we concentrated on moving the upper limit, but I suggest to the House that the time has come when, in addition to moving the upper limit to £5,000, the general approach to the tax ought to be a graduated one. If a person buys a house costing just under £6,000, he pays £30 by way of tax, but if the house costs just over £6,000, he pay £60 under the present arrangement. This, therefore, is why my hon. Friend's Clause covers both the maximum limit which it is justifiable to raise by £500, and also graduation between the amounts which are shown here.

What did the hon. and learned Gentleman say in reply? He started by saying that he would like to do it, but not this year. The country is getting used to this sort of thing from the present Administration. We had it at the time of the General Election, when innumerable promises were made by the party opposite. In particular, they promised to help house-owners, but now we are told, "Not this year".

The hon. and learned Gentleman then put forward all the detailed arguments set out in his Treasury brief as to why it was not justified to make this change. In kindness to the hon. and learned Gentleman we will overlook that bit and deal only with his statement that he wants to do it, but not this year. He then said that the reason for not doing it was the state of our national finances. The hon. and learned Gentleman complained about my hon. Friend widening the debate, but he has widened this into a debate on the whole economic situation, the disastrous record of the present Administration, the crisis of confidence, and everything else that is responsible for the situation in which the Government find themselves.

The hon. and learned Gentleman said that he wanted to remind the House of realities. Standing there, he is a continuous reminder of the realities of the Budget. This is a reasonable Clause, and its acceptance will cost only £4 million this year, and £6 million in a full year. It will encourage house ownership, and help those who are about to buy their houses. Can the hon. and learned Gentleman bring himself to accept it? Not on your life. The hon. and learned Gentleman says that he is not prejudiced, but what proof does he produce? He says that the Government whacked an enormous Capital Gains Tax on property and then, under pressure from the Opposition, they made exemptions which affect house-owners, and this is, therefore, a great concession to a property-owning democracy. The idea seems to be, "First you damage people, and then when you stop hitting them you say, 'Look how good we are. We are trying to encourage you all the time'".

We hear the same sort of thing from the Chief Secretary, who says that he wants to encourage saving, but then he does his utmost to prevent it. The Financial Secretary says that he wants to encourage house ownership. The opportunity to do so has been offered to him on a plate, and he has refused to accept it. This shows that the Government are not prepared to do anything to help those who want to buy their own homes or to encourage a property-owning democracy. The Government are concerned only with encouraging local authorities to build houses, and persuading as many people as they can to go into them.

For these reasons, I believe that the Clause is fundamentally sound, and I congratulate my hon. Friend on puttting it before the House. If the Financial Secretary is still recalcitrant, as he has been so often in the past, I suggest to my hon. Friend that, in the interests of the people who want to buy their houses, he should force this matter to a Division.