Clause 87

Part of Orders of the Day — Finance Bill – in the House of Commons at 6:30 pm on 8th May 1985.

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Photo of Mr Stuart Randall Mr Stuart Randall , Kingston upon Hull West 6:30 pm, 8th May 1985

I am grateful to my hon. Friend because in fact that was implicit in my comments. That is why I said that I would like to have been a fly on the wall listening to the various probing questions. I am sure that all the briefs coming into the various ministerial offices would have suggested that, if there could be a relaxation of the tax, there must be good prospects for the Conservative Government. I would not like to say that that actually happened, but there are doubts in my mind as to how all this took place.

The 1981 change provided an opportunity for the organisations concerned with the development of office blocks to have a relaxation of this form of taxation. In my view, we are discussing here large organisations and rich institutions that invest in office blocks and other real estate. The debate is really about whether we should be giving relief to organisations of that kind or helping the ordinary man in the street. That is the general thrust of what is being said. The clause is yet another measure introduced by the Conservative Government that results in money going from the less well off to the ultra-rich and to the very well off. That has been the philosophy of the Government since they were elected in 1979.

After the change in 1981 came the 1984 change whereby, the Government altered the deferment arrangements of development land tax for industrial and commercial development to complete exemption. Certain conditions had to be met. One was that the property would not be disposed of within a 12-year period. This was another chipping away of the development land tax for the benefit of landowners who, I think one could say, would generally be pretty rich people or institutions.

The Government seem to be intent on encouraging land speculators and land speculation. When the Labour Government were in power, they introduced the development land tax at 80 per cent., but soon after coming to power in 1979 the Conservative Government relaxed the rate to 60 per cent. The original scheme introduced by the Labour Government in 1976 was reasonable in that the first £10 million of profit—this is on a per annum basis—was exempt from development land tax. That was a reasonable legislative measure and, for the life of me, I cannot understand the reason for this change except, as I said earlier, that I believe that there has been some arm twisting and, as we know, the Government are intent on supporting the very rich at the expense of the less well off. These facts can be substantiated. The people and institutions whom we have been discussing are a tiny minority of very well off people.

In 1984, the Conservative Government increased the exemption allowance to £75,000. Now they propose to abolish development land tax. I understand that that will cost the Exchequer about £50 million in 1985–86. If the Minister and some of his hon. Friends would only visit my constituency to see for themselves the social conditions, the appalling housing and the deprivation in the area, I feel almost certain that they would understand why I am so bitterly opposed to the priority of the Government in taking £50 million and giving it to property speculators.

In Committee yesterday, we debated advertisements in newspapers. In a long debate, many hon. Members expressed strong feelings about this form of taxation, which I believe is approximately equivalent to the amount of revenue that would be lost by the complete removal of the development land tax. In the debate, hon. Members said that many ordinary people wish to insert advertisements in newspapers at the time of a family bereavement or on the occasion of a birth or silver wedding. These advertisements are important to many people. As a result of the Government's measure, a tax of 15 per cent. will be imposed. This is just one example of the Government's priorities. They are giving £50 million to landowners and speculators and adding to the cost of advertisements in local newspapers to the detriment of ordinary people.

Many changes have taken place since 1979. Hon. Members who took part in last year's debates on the Finance Bill will realise the insidious way in which the Government have introduced these taxation changes. We heard then of tax relief for stud farm owners, and a form of tax relief for company directors whose children are educated at their companies' expense. The most galling thing is that, when Parliament was debating that legislation last year in the early hours of the morning, the Press Gallery was empty. As my hon. Friend the Member for Workington (Mr. Campbell-Savours) pointed out, it is galling to realise that the general public are often unaware of the extent to which taxation changes are taking place.

This is a question of priorities. As someone has said, Socialism is the choice of priorities. That is why we are so bitterly opposed to the clause. Why did the Government not use the money to avoid petrol costing £2 a gallon? That would have helped those who live in rural areas and those who must use their cars to collect their prescriptions. The increase in the cost of petrol is tough on many people. It is right that we should oppose the abolition of development land tax.

I am delighted that we are debating this matter on the Floor of the House rather than in Committee. I hope that the press will pick the matter up, and that people will realise the extent to which the Government have been taxing the poor and giving money to the rich for almost six years. The net effect is that the rich have become extremely rich and the poor extremely poor. About 18 months ago, "Breadline Britons" reported that nearly 8 million people were living in poverty. The way in which the Government are allowing poverty to continue while at the same time they are feathering the nests of rich property owners and speculators is shameful.