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 Dale Campbell-Savours Mr Dale Campbell-Savours , Workington 6:30 pm, 8th May 1985

As that is the hon. Gentleman's response, perhaps he will examine the position a little further back to see whether his argument continues to hold water. In 1973, there were 215,000 private sector starts. By 1974, the figure had collapsed to 105,000. It then increased to 149,000 and to 154,000. My point is that the policy has not damaged the growth in private house building. Every suggestion that it has is negated by the figures that I have produced today. When the Minister replies, he must prove to the House that there is a need to remove the tax, to ensure that growth can take place where it has not taken place. He cannot prove that, because the statistics show that growth has taken place.

I wish to ensure that people outside the House do not misunderstand the figures. Although there has been a growth in private sector housing development, there has been a collapse in the public sector from 132,000 in 1977 to 47,000 in 1983. The figure is even lower this year. That means that this year the total figure of 214,000 for all dwellings is lower than for any year under the Labour Government. We have won the argument in every respect.

7.15 pm

The hon. Gentleman said that the benefit from the reduction in tax would be passed on to the consumer, but that does not happen. That is not how the market works. The benefit is not passed on in the free market. What happens is the same as what happens in the enterprise zones. Although there has been a rates subsidy, its effect has made little difference to the market cost to the manufacturer or tenant in taking a site. Rents have merely increased. The market, not the question whether there is a tax, determines the cost of land. We are merely handing over the £50 million or net £20 million to landowners. The whole exercise is a waste of time. If it could be proved that the abolition of DLT could lead to an abundance of new land coming onto the market, there might be an argument for it. However, it will not do that. Abolition of DLT has no influence on the number of private sector starts.