I am sorry that the Financial Secretary felt that he could not say that we have had a useful debate. I can only surmise that the Tory party has been caught out and that he did not like it. No crocodile tears were shed on this side. Our speeches were sincere and honest and addressed the real problem for which the Government have not provided a solution.
Amendment No. 1 seeks to reduce the £250,000 limit to £240,000. There are few houses, if any, in my constituency that cost £250,000. I do not therefore see why the limit has to be set so high. However, it may have something to do with the south of England. If so, I shall wait with bated breath to hear what the Financial Secretary has to say about it.
I suspect that people with very big houses are not short of a bob or two. A stamp duty concession for them seems yet again to be the Tory party looking after its own. It looked after the rich when it reduced the higher rate of income tax from 60 to 40 per cent. All the tax reliefs went to the rich. I wonder whether the Government are playing the same old game. The amendment is partly a probing amendment. It seems to us that £240,000 would be more appropriate than £250,000. I am prepared to be persuaded otherwise. However, unless the Minister can put forward a very good argument, we may have to insist on pressing the amendment to a Division.
The hon. Member for Wrexham (Dr. Marek) described the amendment as a probing amendment. He sought to make a point about the level at which we have chosen to set the threshold. No huge matter of principle is involved. Where the threshold in any taxation matter is set is a question of judgment, not of fundamental principle. The reason for setting it at £250,000 is that it will exempt about 90 per cent. of the purchases of residential property from stamp duty. We shall retain about 90 per cent. of the revenue from stamp duty in the case of transactions affecting commercial and other properties.
The proposal, as formulated, is very well targeted and concentrates the benefit where it is most likely to stimulate activity in the housing market. I said earlier that about 600,000 purchasers of residential property should be exempted. It is not a great matter of principle. We believe that we have pitched the threshold at the right level. Therefore, I invite the Committee to support the provision, as drafted, and the hon. Gentleman to withdraw the amendment.
With this, it will be convenient to consider the following amendments: No. 4, in page 1, line 17, leave out '20th August' and insert `7th May'.
No. 6, in page 1, line 24, leave out '16th' and insert '31st'.
No. 7, in clause 2, page 1, line 28, leave out '20th' and insert '30th'.
We come to an interesting set of amendments that fall into two groups: amendments Nos. 3 and 6 and amendments Nos. 4 and 7. I originally considered tabling an amendment to replace 20 December with 10 December, but the Table Office ruled me out of order. The Government's rules on tabling amendments prohibited that.
An important issue is at stake, so we tabled amendment No. 3. I wanted to make a point about the unfairness that might arise if someone's property deal were stamped on, for example, 15 December. They would say, "A few days later, we could have saved ourselves £1,000 or £2,000." The Government gave no warning of their intentions. On 19 or 20 December, they produced, like a rabbit out of a hat, a concession on stamp duty.
I realise that the amendment simply delays the problem. If the Government accepted our amendment, no doubt people who had their instruments stamped on 7 or 8 December would feel just as aggrieved as those who had their instruments stamped on 17 or 18 December.
An article that appeared in The Independent on 11 January says:
On 29 November last year, Elaine and Graham Bradbury-Stewart completed the purchase of their home in Lightwater, Surrey. They paid £125,000. If they had moved just 20 days later they would have saved £1,250 in stamp duty—a sizeable chunk of their moving expenses of £5,500. Not surprisingly they feel somewhat aggrieved. Mr. Bradbury-Stewart says, 'We were "gobsmacked" as they say—£1,250 would have bought some new furniture, or the bathroom suite that we need. I can see no real justification for having the tax in the first place. It is the Government taking 1 per cent. for nothing.' Neither Graham nor Elaine believes that increasing the threshold temporarily will boost the housing market.
On Second Reading, I produced a fair amount of
evidence to show the veracity of that statement. People regard it as an election ploy. That is the purpose of the Bill—an election ploy.
If the hon. Gentleman will let me answer him, I shall be happy to give way to him again. He must examine who has spoken in the debate. One Tory Back Bencher has spoken, but four or five Opposition Back Benchers have spoken. That makes my point. It shows bad grace for the hon. Gentleman to complain that I am calling the Bill a gimmick when the main tenor and thrust of my Second Reading speech was to that effect. If the hon. Gentleman wants to intervene again, I shall give way.
He was joking, was he? I shall accept the Whip's advice on that, but let us return to the argument.
One argument involves the inherent unfairness in the Government's suddenly producing without any warning a substantial concession in duty. The people who had their instruments stamped a few days before the Government produced such a bonus feel aggrieved and wonder why they could not have partaken of it to a certain extent. It is no use the Financial Secretary saying that they were going to buy property anyway and that the measure is designed to kick-start the housing market, if I may use that phraseology.
The Minister made his announcement on 19 or 20 December and some instruments would probably be stamped on 21, 22, 28, 29 and 30 December and were then going through the pipeline. What is good for one set of people should be good for another set and I look forward to hearing what the Financial Secretary has to say about that.
The other group of amendments deals with when the concession should end. I could not resist tabling an amendment to help the Conservative party. The Conservative party is calculating on ending the concession on 19 August, but I think that it should be ended on 7 May. If it were to be ended on 7 May—on election day—there would be such a hive of activity before then that it could perhaps be believed that Conservative party policy was working and that the market was very active. It would also give the Opposition a chance to demonstrate the norm—that immediately after the concession ended, the market would cease to exist for a considerable time. We have had these problems before when joint mortgage relief came to an end and I fail to see why the Government have introduced a measure of a similar nature under which there will be problems on 20 August.
The second group of amendments seeks to elucidate from the Minister how he feels the situation will develop and what will happen to the market on that date and beyond. I shall be interested to hear what he has to say.
As the hon. Member for Wrexham (Dr. Marek) eventually managed to sort out, there are two broad groups of amendments: one makes a silly point and the other a bad one.
The bad point is about the time from which the welcome relief from stamp duty comes into force. He said that it should have been introduced earlier because it was terribly unfair that people who had already had their documents stamped would be denied the relief.
Whenever any change is made to any taxation, some people fall on the helpful side and some people fall on the unhelpful side. That is simply a fact of life. If one makes the date 10 December, 10 November or 10 January, there will still be a line, and some people will fall on one side and some people will fall on the other. It seems to make sense that one should say that the provisions will come into force from the date on which my right hon. Friend the Prime Minister announced that the change would take place. People who were executing documents after then knew that they would have the benefit of the relief from stamp duty or the refunds under clause 2. Those whose transactions were already complete knew that the transaction would be completed on the basis which they had expected. There is nothing especially dramatic or unfair about that.
The silly point made by the hon. Member for Wrexham concerned the date at which the provision would end. He thinks that it is frightfully witty to make the point about amending the Bill so that the suspension ends on what he fancies is a date on which the general election may take place. The hon. Gentleman has sought to argue this evening that the provision is nothing more than an electoral gimmick, which he contends with what I discern as a growing element of unease, gradually working towards panic. In the way in which he moved the silly amendment, he conceded that the measure will have the effect that we intend, and that it will draw forward transactions and thus have a stimulating effect on the housing market. Although his points are not very good, he has inadvertently drawn attention to the underlying belief of Labour Front-Bench Members that the measure will work. I am grateful to the hon. Gentleman for that.
The Financial Secretary has put his finger on the point. The measure will bring forward transactions, but it will do so at the cost of having a dearth of transactions later. That is the problem, and that is why the Bill is a gimmick. It is not a long-lasting solution. Transactions will be made earlier than they otherwise would have been, but there are likely to be few more—perhaps no more—transactions as a result of the Bill. That is why the Opposition tabled the amendments.
It is a little difficult to know what the hon. Gentleman seeks to probe through the deeply thought out and stimulating probing amendment. He suggests that we should remove clause 1(3) which concerns documents executed on or after 20 December which were not already stamped before the resolution was passed. The general rule is that documents cannot be given in evidence or used for other legal purposes, except in criminal proceedings, unless they have been duly stamped in accordance with the law in force when they were executed. If a document was executed on, say, 20 December, the law in force at that time would have required it to be stamped on the basis of the £30,000 threshold because the House had not yet passed the resolution to give effect to the new threshold. Now that we have passed the resolution, the benefit of the new threshold can be given.
Clause 1(3) ensures that documents will not be subject to a legal challenge merely because the new threshold did not yet have statutory effect at the time at which they were executed. That is, therefore, a necessary protection for the taxpayer and the amendment would remove that protection. I therefore invite the hon. Gentleman, having probed in a compelling way, to withdraw the amendment.