I beg to move, That the clause be read a Second time.
The Opposition have taken the Government at their word in respect of the Stamp Duty (Temporary Provisions) Act 1992 and now propose extending the exemption from stamp duty on the purchase of homes until March 1993. We had a trailer at Prime Minister's Question Time this afternoon. I did not get to the Chamber until about two minutes after the Leader of the House, on behalf of the Prime Minister, quoted me as having said that this legislation was a racket and a gimmick. I certainly remember saying that it was a gimmick—it was an election gimmick—but not that it was a racket. If any Minister can find the report of my words, I shall be delighted to hear exactly what I said.
It is possible that this was a genuine attempt by the Government to intervene in the market with a view to encouraging recovery from recession. If so, the Government ought to accept our new clause. If they do not accept it, we can conclude only that the Act was a gimmick for election purposes, an expedient from a Government who knew that it would not have any effect in the event of our failing to move out of recession.
The reality is that we are not recovering from recession. That being the case, and as the purpose of the legislation, which was to give the economy a kick start, has not been fulfilled, what objection can there be to extending the exemption until 31 March 1993? That is a simple question to which I hope we shall get a favourable reply.
On 20 January 1992 Opposition Members said that the Bill would provide little help, that there were better ways of spending money to assist the manufacturing and construction industries. We said that capital allowances could be used and, above all, that lower interest rates would be a significant advantage. But the Government are not taking any of these steps. For a number of years we have looked in vain for Government intervention in the market to get us out of recession. The Act to which I referred amounted to Government intervention in the market, and if it was not just a gimmick we should be able to regard it as an attempt to get the economy back on its feet.
But the Ernst and Young Item Club, which published a forecast yesterday, now expects the gross domestic product to shrink by a further 0·6 per cent. this year. It says that this forecast is gloomier than most recent City predictions. That is very poor. The Chancellor of the Exchequer said that the economy would bounce back to a level of 1 per cent. growth this year, having contracted by 2·5 per cent. in 1991. In the Budget, he forecast that the economy would expand by 3 per cent. in 1993. Patently that is not happening. If there is to be a further contraction of 0·6 per cent. this year, as the Ernst and Young Item Club has predicted, we have a serious situation in which none of us can take any pride.
We must all agree that something has to be done. The return of consumer confidence is an absolute prerequisite. If the extension of stamp duty exemption that we seek were granted, and if it were to give the housing market a kick start, the whole economy would benefit. When people move into new houses, construction is not the only industry to benefit. New carpets, refrigerators and beds are needed, and the whole engine of the economy benefits. That is why the Opposition regard this as a very important proposal.
In an interview with David Frost on TV-am on 24 July 1991, the Chancellor of the Exchequer, referring to the recovery, said:
It may be slow at first. It will begin probably in the housing market. These arc just vague stirrings, but the signs are there.
Recently the Evening Standard published a long list of the Chancellor's sayings about stirrings and green shoots. I expect that hon. Members know most of them by heart, but as no doubt the House wants to make progress I shall not quote any of them. I do not think that the stirrings or signs to which the Chancellor referred in his interview with David Frost existed. He may have been right when he said that the housing market might be one of the engines of recovery upon which other recovery would depend. It is a year since he made that statement, and unfortunately house prices have continued to fall. The latest Halifax price index shows that house prices fell by 0.5 per cent. in May. They are now 6·2 per cent. lower than they were a year ago.
It may be said that the Opposition are proposing that the Government give money away liberally. Yes, this measure will cost money and the Opposition, as I said in January, believe that the money could be better spent on getting the economy working again. However, as the Government are not prepared to entertain any of our ideas on how to do that which we have put forward over a number of years, the Opposition are left with no alternative but to support the Chancellor's initiative.
The Stamp Duty (Temporary Provisions) Act 1992 could easily be extended to the end of this financial year. It could be paid for by further postponing the exemption of duty on share transactions. That has already been done once and could easily be done again for another six months if the Government did not want to increase the PSBR. That is already £28 billion, and could be £30 billion soon, which is almost 4 per cent. of GDP, so I have every sympathy with the Government if they do not want to increase the PSBR.
There is no need to do that. I do not know whether TAURUS—the transfer by automated registration of uncertified stock—will be ready by next April, but another six months will not do any harm. If there were a choice between spending the money on the abolition of duty on share transactions and on giving further relief on stamp duty on house transactions, the Government should spend money on the latter.
In January and February, when the Bill was going through the House, we said that we thought it was an electoral gimmick with which the Government were fishing for votes. This evening, the Government have a chance of proving the Opposition wrong by admitting that we are still in recession and that the other aspects of the recessionary cycle have not changed and by agreeing to continue the exemption. If they did that and accepted the new clause, I would pay full tribute to them.
I am grateful to the Opposition for tabling the new clause and allowing us to debate this important issue. However, it is absurd that, having said recently that exemption is a gimmick. they should now feel that it is not a gimmick and should want to table a new clause to extend it.
In Northampton we have the Carlsberg brewery, which claims that its beer is probably the best in the world. We also have Wilcon, a well-known company, which is probably the best house builder in the country. It knows a thing or two about house building and has been successful for a long time, and is probably more successful than anybody else at the moment. Life in the building industry in general is not easy. There are two deductions to he made from that.
When I was at Cambridge university, I read engineering, and there were about 135 of us in the engineering department, one of whom had a rather disgusting beard, wore a CND badge and was obviously harking mad. All the rest had short hair and were decent. beer-drinking, women-chasing, rugby-playing, Conservative-voting undergraduates. What was true of the engineering department of Cambridge university is true, man and boy, or the building industry. It is not just that they do not read The Guardian—they have never heard of it. They are Tory voters to a man.
This is not a point that I am concerned about, but I suggest that the Government take it on board. There is distress in the building industry. It does not matter if industries come and go—some industries grow, other industries come up afterwards, disasters occur, bankruptcies take place and it is all part of the general gaiety of the economy. However, by and large, all these people vote Conservative.
The second point—I think it is important even if the Government do not—concerns the green shoots of recovery. Of course they are there for everybody to see, provided that one looks carefully, has a magnifying glass, and is an optimist. I am sure that they must be there. The Government wish to get the recovery moving more quickly, so they made this concession in the Budget. It was wise of them to do so. The Government will agree that it has had an effect. Houses that would not otherwise have been bought have been bought. Therefore, it has had a positive impact on the housing market and the building industry. It may be that we have not moved very far forward, but without the exemption we might have moved backwards.
Everybody knows that there are two house buying periods a year. First, when the daffodils come into bloom and the spring starts, people start to think of moving house.
And of other things in the hon. Gentleman's case.
It takes one to know one.
In most springs, there is an upsurge in the housing market. Then people go away for their summer holidays, come back in September and have a second bite of the cherry. That is the second time in the year when the housing market is active.
I know that the Government have two cases against the extension. The first is that it will cost money. That is a bad argument, and I hope that my hon. Friend the Minister does not adduce it. One may not get the revenue from stamp duty because people are not paying it, but by buying houses people generate activity. As the hon. Member for Wrexham (Dr. Marek) said, they buy carpets and equipment. Those green shoots will start thrusting through, the economy will start moving more quickly, there will be more tax revenue, and the Department of Social Security will spend less money. What might be lost from tax revenue could be gained by growth in the economy.
There is a good argument. That is, if the Government give an exemption with a time bar and then keep extending it, people will feel that, with one shove or push, the whole structure will come caving in and the Government will give in again. I can sympathise with the Government on that. However, they should extend the exemption until the end of the year. Such a concession would put into people's mind the message, "Buy while stocks last". If the exemption continues until December, it will improve the second house-buying period of the year. People will feel more impelled to buy than they might otherwise. They will feel that if they do not get on with it now, they will have to pay more later. It will give the boost to the housing market that my right hon. Friend the Chancellor suggested that it would when he introduced the measure in the Budget. The moratorium should be taken on until the end of the year. The housing market and the economy need a boost. The moratorium is part of the boost that would help us to move more quickly out of recession.
If the moratorium proves that assistance, it will not make it more difficult for the Government to lower interest rates—something that we all want. It is not valid for the Government to argue that they cannot reduce interest rates because they would be forgoing the income from stamp duty if they extended the moratorium.
The concession should continue until the end of the year. The housing market should not be depressed; it should be helped. People should be helped in the second buying period of the year to bring their purchases forward. That would help the Government and the country as the economy would be moving once more.
Anyone who looks at the housing market in London, and anyone who, like me, is trying to sell a house and buy another one, would not believe that green shoots are sprouting as though springtime—although it is summer now—is about to arrive in the housing market. It is a desperate time in London for people who are anxious to buy houses. Many of those people are first-time buyers, and they are essential to ensure that the housing market picks up.
Figures released today by the Association of London Authorities show that first-time home buyers in London will be particularly hard hit when the Government's eight-month stamp duty moratorium ends on 19 August. Higher house prices in London and the south-east mean that only 6 to 8 per cent. of first-time purchases in the region fall below the £30,000 stamp duty threshold compared with 22 per cent. nationally. The average amount paid in stamp duty in the region is higher because it is levied as a percentage of the purchase price. These figures are devastating news for Londoners who will look with absolute dismay at the Government position this evening.
My hon. Friend the Member for Wrexham (Dr. Marek) was right to question the Government's motives and the timing of the moratorium when the stamp duty proposal was introduced to the House. He said:
If a general election were not to be held in the next four months, the Government would have shed crocodile tears and Ministers and the Prime Minister himself at Prime Minister's Question Time would have said that nothing could be done about house repossessions."—[Official Report 15 January 1992; Vol. 201, c. 1064.]
Given the background, the difficulties and the moratorium on stamp duty, the housing market will face worse straits if the concession is removed.
Many things need to be done for housing. There should be a proper mortgage rescue scheme. Although it is outside the scope of the new clause, I believe that the housing market also desperately requires the phased release of receipts from council house sales so that adequate rented accommodation can be provided for the thousands of families living in unsatisfactory and high-cost bed-andbreakfast accommodation.
It would be a shame and a scandal to have a debate about housing without mentioning the thousands of families throughout the country who are in the misery of bed-and-breakfast accommodation and whom we see every week in our surgeries. We deal with their cases every day and we have to tell them that basically nothing can be done because the Government do not have the heart or decency to act.
Having established the moratorium, the Government, although they claim that they do not believe in interfering with the market, do not seem to be able to leave it alone. It is worth considering the comments of the hon. Member for Faversham (Mr. Moate):
the housing market will certainly come to a stop on 20 August. How many property transactions will take place on that day or during the succeeding weeks? Arc we really contemplating cessation of this exemption in mid-August? That is hardly a practical proposition, and I ask Ministers to think again about it … Ministers must recognise that it is impractical to suspend a tax for eight months while applying it to sums above an artificial threshold."—[Official Report. 15 January 1992; Vol. 201. c. 1068.]
Indeed, Mr. Melville-Ross, the chief executive of the Nationwide building society and chairman of the Council of Mortgage Lenders, has also said that the decision not to extend the stamp duty holiday beyond the August deadline could be "fatal". Ministers must deal with this and respond to it.
Given the background and the dire straits of the housing market, I urge hon. Members to support the new clause in order to make a small impact on the horrendous mess which is the housing market under the Conservative Government.
There is no doubt that the construction industry faces severe problems and that the housing market is depressed. The House will know of my interest in such matters.
Without any doubt, the Government's decision earlier this year was welcomed by the industry at large. Ministers have said on many occasions over many years that the construction industry is the barometer of the economy. So much depends on confidence. Whether or not the green shoots are there, as my hon. Friend the Member for Northampton, North (Mr. Marlow) said, it is generally held that the elements for the recovery are in place, but there is little evidence of that recovery taking place in substantial measure at the present time.
The moratorium on stamp duty had some effect, although I am bound to say that it did not have the dramatic effect that some of us might have hoped for. There was a slight post-election surge in interest in the housing market, but unfortunately that has fallen back. The House will be interested and, I hope, concerned to note that the figures from the House-Builders Federation for May are worse than they were for May 1991. Indeed, the June figures are likely to be worse than the May figures. The present position on stamp duty has not had the desired effect.
However, it is equally clear that if one accepts that the construction industry is capable of leading the recovery, the signals that we send to it are very important. Confidence is at the heart of the exercise. I believe that this debate is about confidence. That is what the Government are attempting to address at the moment.
If the elements for recovery are in place, it is clear that the only element that is lacking is confidence. When it resumes, people will begin to buy houses and that will have a ripple effect throughout the housing market which will be of enormous benefit.
I am not certain what the hon. Gentleman is basing his figures on, but the evidence from the organisations concerned showed that there was an increase in interest after the election, which reflected people's confidence in the return of a Conservative Government. Clearly, the anticipated recovery has not proceeded in the way for which we hoped.
Much has been made of the early-day motion to which I and many of my hon. Friends have put our names. It reflected our belief that the Government's policies of encouraging home ownership over the years have been right and that there is still among our fellow citizens a substantial desire to own their own homes.
The construction industry has played a major part in making available at the right price homes that people want to buy. The early-day motion said that we hoped—the words were picked very carefully—that the Government would recognise the importance of doing everything that they could to stimulate the building and construction industry. It added that if the Government could see their way to keeping or extending the moratorium, that would help. That remains the position.
We want the Government to give every assistance that they possibly can to an industry which we firmly believe is capable of leading the country out of recession and of leading us to the confidence that we believe is necessary.
We recognise that our right hon. Friend the Chancellor has enormous difficulty in balancing the various competing claims. At the end of the day, my right hon. Friend and his Treasury Ministers must judge exactly where they can best use the resources that are available to them. I shall have no difficulty in accepting what my right hon. and hon. Friends have to say in making their judgment. They are in possession of all the facts, and they know exactly—[Interruption.] Opposition Members can scoff as much as they like, but they cannot have it both ways. They previously regarded the measure as a gimmick and they are now seeking to try to embarrass the Government because some of my colleagues have ventured to suggest that the Government should consider something. We do that all the time. Putting one's name to an early-day motion is not a gesture of rebellion: it is an expression of opinion. The sooner Opposition Members realise that, the better.
I reiterate that the building and construction industry is capable of making a major contribution to the recovery that we badly need. It is capable of leading the economy out of recession, particularly that difficult sector, the housing market. If my right hon. and hon. Friends will consider what they can do to stimulate the industry, we shall be content that the matter has been raised. For argument's sake, perhaps they will want to consider lowering the ceiling, recognising that a large proportion —about 70 per cent.—of all housing transactions involve sums of less than £80,000.
My hon. Friend speaks, as he has acknowledged, for the major construction companies. I should like him to accept—I am sure that he does—that his views are shared by smaller and medium-sized companies as represented by the Federation of Master Builders, whose parliamentary adviser I am. Does my hon. Friend accept that, in view of all that we have done for home ownership, one point that the Government might consider is that the time might come when the Chancellor is able to consider abolition of stamp duty altogether? It represents a tax on home ownership. What are we as Conservatives doing perpetuating a tax which has already been abolished for shares and other transactions and which remains a tax on home ownership?
I am grateful to my hon. Friend. I am sure that, in the long term, that very desirable matter will be fully considered by my right hon. Friend the Chancellor and the Treasury team. Bedevilled as they are by advice from every quarter—many people urging them to spend money as though it is going out of fashion, yet urging them to contain public expenditure—they have some very difficult choices to make.
My right hon. Friend the Chancellor received a letter from the managing director of a major construction company, the Berkeley Group plc, who said:
I personally believe that the housing market is the barometer of the economy and until such time as it recovers
and the public in general have a feeling of well being, I do not believe that the economy as a whole will recover as the Government is hoping for.
I endorse that remark. We recognise that until confidence is back and the recovery starts, we will be in a depressed period. I do not envy the task of my right hon. and hon. Friends, but I urge them to recognise the importance of that major industry and the vital contribution that it can make in leading us into the recovery that we all want.
The hon. Member for Crosby (Sir M. Thornton) overestimates his importance and that of his colleagues who signed the early-day motion. It is not their credibility that is at stake; it is that of the Chancellor and the Government.
I am grateful to the hon. Member for Northampton, North (Mr. Marlow) for referring to the green shoots of recovery, as that is the background against which the matter should be viewed. I shall add a northern voice to the discussion and tell the House what is happening to the green shoots of recovery in my home city. In Leeds in 1990, the unemployment figure was 22,476. That and the other figures that I shall give are the registered unemployed figures. The House knows the difference between the real level of unemployment and the real poverty that it causes and the registered figures which totally understate the position. In 1991, when the Chancellor introduced the measure, unemployment in Leeds climbed to 30,122, a 30 per cent. increase. As we discuss this matter, the unemployment figure is 35,102, which represents a 47 per cent. increase since 1990.
Does that sound like the green shoots of recovery? If Conservative Members think so, let us consider employment in the construction industry. Unfortunately, the 1992 figures will not be available until Thursday, but the 1991 figures relating to employment in that industry both in the country and—
I hope that in a moment, Mr. Deputy Speaker, you will see the picture that I am attempting to draw.
I was dealing with the green shoots of recovery. The suspension of stamp duty was either a cynical measure to take matters relating to repossessions and so on off the front pages, or a genuine attempt by the Chancellor to bring forward the recovery by making a move in the housing sector that would help the construction industry, the retail industry, and unemployment. I give two figures to demonstrate my point. Employment in the construction industry, despite the suspension of stamp duty, continues to decline. In Leeds 95,000 people were employed in the construction industry in 1990, but that has fallen by 14 per cent. For Britain as a whole the figure has fallen by 13 per cent.
The second figure is for property transactions—Conservative Members will surely accept that they are closely related to the matter with which we are dealing. The hon. Member for Crosby challenged my hon. Friend the Member for Ashfield (Mr. Hoon) about the figures for property transactions in England and Wales. In May last year there were 111,000 property transactions. In May this year, with stamp duty abolished, the figure was 83,000. Conservative Members may think that that is a one-off figure but the figures for the preceding months are April: 91,000; March: 90,000; February: 89,000; January: 79,000.
So if we consider unemployment in the construction industry and property transactions, the picture is bad. Unemployment continues to grow generally. Unemployment in the construction industry continues to grow and property transactions continue to fall. [Interruption.] You are well aware, Mr. Deputy Speaker, that in Yorkshire that is the highest office that one can assume. So you will understand the tribute that I take from that remark.
When stamp duty was abolished the Chancellor of the Exchequer was accused of being cynical because of the closeness of the election. On 19 December he said:
But I recognise that there is a wider concern about the depressed state of the housing market, which has consequences for home owners in general and for the wider economy. I therefore have one further announcement to make.
The announcement was the abolition of stamp duty. He continued:
I have decided to use a portion of that additional revenue to help encourage and facilitate transactions in the housing market."—[Official Report, 19 December 1991; Vol. 201, c. 454.]
If in those circumstances he felt that it was necessary to encourage property transactions, we must ask the Economic Secretary as we approach August, with unemployment continuing to rise, home sales continuing to fall and unemployment in the construction industry continuing to grow, why on earth he is reintroducing stamp duty.
We take it that the Government are genuine in this matter. I have received a letter from a building firm in my constituency saying that it had hoped that the Government's measure of a moratorium on stamp duty
would have provided a little extra confidence and possibly urgency within the house sale market. Unfortunately this has proved not to be the case".
That is a major building firm in north Wales, Cheshire and the north-west. If the Chancellor was genuine, surely he should have given the measure time to work. The Minister should therefore support the Opposition new clause. That would meet the point that my hon. Friend makes.
When stamp duty was abolished the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and others said that if £410 million were available, the money could have been spent better elsewhere. That is still a valid point and that is the issue tonight. Has the Minister come to the Chamber to say that the money will be spent elsewhere or is the measure a precursor of the autumn expenditure cuts? Will the money be spent elsewhere? It will not be spent on training, research and development or any measure to help the economy. Is it simply the beginning of public expenditure cuts?
On 2 June, in answer to the hon. Member for Faversham (Mr. Moate), the Minister seemed to imply that the measure was simply to save money. He said:
The yield costs are considerable, and we cannot afford to ignore the impact on the borrowing requirements of Government.… We simply cannot ignore such money in the current equations on public expenditure."—[Official Report, 2 June 1992; Vol. 208, c. 770.]
In my constituency, as in Leeds as a whole, unemployment is growing. People look to the Government to give assistance and help. Tonight people see the answer. The money which was provided and which the Chancellor said was aimed at helping the economy, relieving unemployment and helping the construction industry and house sales is being withdrawn simply to save money in the forthcoming public expenditure round. That would lead the people in my constituency to agree with those who said that the Government were acting cynically and arranging something for the election rather than seeking to help the millions of people who faced unemployment in the city.
I have some sympathy with the new clause. I strongly supported the Chancellor when he introduced the moratorium. I do not believe for one moment that it was a gimmick. It may well have been a vote-catcher but what is wrong with that in a democracy? Listening to Opposition Members, one would think that they did not want any votes. Judging by the results of the election, they did not get many. There is nothing whatever wrong in vote-catching.
I supported the abolition of stamp duty first because I have always disliked it. It is a ridiculous tax. It is perhaps a little better than the window tax of many years ago, but it is not a sensible tax and it should always be substantially reduced. I have always welcomed reductions in it. Secondly, in the wretched recession that we are suffering, there is no doubt that the construction industry and the housing market are the most serious aspect. They were the first to suffer, and they are suffering considerably. The housing market is a major factor in the confidence on which so much depends.
Indeed, I would go further and say that a major factor in bringing back the confidence that we require to bring us out of the recession is a return to confidence in housing, house ownership and a property-owning democracy. In my time in Parliament I have been through all sorts of economic crises. There was stop-go and devaluation under the Labour party. All sorts of remedies have been suggested including monetarism and interventionism. None of them works. But the one thing that has been absolutely certain in the mind of the public throughout the ups and downs has been the thought that they owned a little bit of this country—their property. They believed in the old saying, "As safe as houses." That saying has existed for many years. To feel as safe as houses is a solid bedrock through the ups and downs of the economy and the proposed remedies.
Unfortunately, the unease which has crept in in recent years has destroyed that confidence. That is a major factor in the lack of confidence. Let me hasten to say that I do not blame my right hon. Friend the Prime Minister or my right hon. Friend the Chancellor of the Exchequer for that. The trouble arose during the previous regime, because of the ludicrous boom stimulated by the previous Chancellor, the noble Lord Lawson, and his absurd mortgage tax relief proposals, which encouraged young people, including my daughter, to rush into buying houses like mad. That was what stimulated a lot of this nonsense, and it was an artificial boom.
If we manage to stimulate the housing market now, it is not likely that another boom will occur for many years. Banks and building societies are not so stuffed with money, nor are people sufficiently confident that they will take on loans with high interest rates, as another shift in value might mean that they would find themselves with a mortgage which was higher than the value of their property. There is no danger of another "Lawsonian" boom. Therefore, the Chancellor can feel confident about giving a boost to the economy. That is why he should apply his mind seriously to amendments such as new clause 3 and to the words of the early-day motion in the name of my hon. Friend the Member for Crosby (Sir M. Thornton), which also touched upon the matter.
I recognise the importance of curbing public expenditure; I realise that it is fundamental to our economy. I am told that the stamp duty concession is worth about £600 million. Whatever it is, the sum involved is substantial. I therefore recognise that it plays a part in the public expenditure round.
Unlike the hon. Member for Leeds, East (Mr. Mudie), I do not want the Government to cancel the concession and to spend the money instead on some folderol, which would he entirely counter to their general economic thrust. I should be happy if they used the money on the general, essential needs of the economy.
I never said that building houses was a folderol. As regards voting, if all of us had io bow down for errors in the way that we had voted, I am afraid that we would never stand up again. At least I accept my errors as much as anyone, and at least I was not Chancellor of the Exchequer at the time.
I am strongly in support of what I understand to be the policy of curbing public expenditure. I hope that that will be done with a view to lowering interest rates, which is more important than reducing or abolishing stamp duty. That is a fundamental factor in the confidence equation. If my hon. Friend the Economic Secretary tells me in his winding-up speech that the purpose of cancelling the moratorium is not merely to fritter the money away but is a fundamental means of reducing interest rates, I shall happily support whatever he advises on the new clause. Whatever he proposes—[interruption] I have found that nearly everything that the Opposition propose is doomed to failure and disaster, so I shall also be guided by that factor.
In all seriousness, the damage to confidence and to the concept of a property-owing democracy is extremely sad. I have believed in that theory throughout my political life. The Government and the Conservative party have always believed that encouraging people to buy is essential to our way of life. It is a bulwark against the ever-encroaching power of the state which the Opposition always encourage. I therefore hope that the concept of a property-owning
democracy has not disappeared and that my hon. Friend the Economic Secretary will express some sympathy, on behalf of the Treasury and of the Government, for the plight of the construction industry and of people who believed in such a democracy and who are now in a state of great unease. I hope that he will say something to reassure them. We shall listen with keen interest to his reply. In the words of the sergeant major who saw his junior NCO allowing a body of troops to walk to the precipice, "For God's sake say something, even if it's only goodbye."
New clause 3 sets out a stark choice for the Government and their supporters: they either plead guilty to the charge that they used up to £400 million of public money for electioneering, on a failed policy of kick-starting the housing market, or they accept the new clause and allow the housing market time to make some sort of recovery. Either the Government believe in the policy that they so eloquently advocated in December and January or they admit to raiding the public purse to secure their re-election.
When moving the Second Reading of the Stamp Duty (Temporary Provisions) Bill in January this year, the then Financial Secretary said:
The purpose of the measure is to encourage people considering buying houses to get on with buying their houses or flats and to prompt others to bring forward their purchases to take advantage of the moratorium.
That manifestly has not worked. The housing market remains flat, which is why I am prepared to give the Government the benefit of the doubt and to allow a little more time for the proposal to work. The then Financial Secretary admitted that that might be necessary because he added:
It will, of course, be a little while before the effects of the measure show up in the levels of house sales."—[Official Report. 20 January 1992; Vol. 202, c. 117.]
New clause 3 is a modest proposal to give a little more time—as advocated by the then Financial Secretary—for the housing market to recover.
If the Government were so enthusiastic about extending stamp duty relief in December and January, why are they choosing to abandon that policy now? One answer
not available to them is to say that they can withdraw the extra relief because the policy has worked. Whatever else the Government may claim, they cannot say that the extra relief has helped the housing market in any way. If we compare the figures for January to May 1991 with those for January to May 1992, we find that there was a 24 per cent. reduction in property transactions.
For the benefit of the hon. Member for Crosby (Sir M. Thornton), who challenged the statistics earlier, I should add that those figures were supplied by the Library and are based on the Government's figures for property transactions. Those figures illustrate a steady downward trend throughout 1992, when compared with the equivalent period in 1991. Notwithstanding the availability of extra relief, which came into force on 15 January, that trend continued.
There is no evidence from the statistics that the Government's scheme has had the effect that the then Financial Secretary said that it would have, unless it is the Government's case that the decline in property transactions would have been greater but for the availability of extra relief. If that is their case, it is time that they said so. Otherwise, we risk a sudden surge at the end of August, as people understandably try to complete transactions before relief ends, followed by a chronic reduction in demand.
For precisely the reasons that the then Financial Secretary gave in January—he said that the measure would take a little time. If the hon. Member for Beaconsfield (Mr. Smith) looks at that speech, he will find that the then Financial Secretary referred to people's difficulties in finding homes, the time taken by the legal procedure and the time necessary to complete. There simply has not been enough time.
The purpose of new clause 3 is to allow a little more time, precisely as the then Financial Secretary set out. The question by the hon. Member for Beaconsfield (Mr. Smith) implied that the scheme was not justified in the first place and that the Government were simply gambling up to £400 million of taxpayers' money in trying to secure an upturn in the market. I presume that the hon. Gentleman is now saying that that policy was doomed to failure in any event. Is he really saying that the policy has failed?
The Government may be tempted to tell us the truth for a change and to say that their policy was the shortest of short-term policies. It was designed to get the Government through the election but no further and is now to be abandoned, despite the evidence of a severe housing crisis throughout the country.
The current state of the British housing market has caused a record number of repossessions. One in five of the houses currently on the market is available as a result of repossession or people voluntarily giving up their keys without waiting for appropriate legal proceedings. Those houses remain to be sold and the market will remain flat until they are sold and demand picks up.
The fall in the value of houses has had a further effect on the level of demand and has led to a debt trap in which 1·8 million people are borrowing more money than the current value of their house. Their mortgages and loans against their house are much larger than its actual value, and they are unlikely to risk selling those properties and trying to move on while they are saddled with a substantial debt.
Against that background, the Government have decided to restore stamp duty to its 1991 level and the fragile housing market will be given yet another serious blow inspired by the Government's misguided policies. That is not simply my view. We heard earlier the opinion of the chairman of the Council of Mortgage Lenders, who said that such a measure would be fatal to any recovery in the housing market.
How do the Government propose to stimulate the housing market? Must we wait for another election before we can expect further action to help the housing market?
I speak as a supporter of the Government, but as a supporter they would probably prefer not to have. When the moratorium measure first came up, I supported it out of loyalty. I now support its abolition out of conviction.
Both sides of the House have been playing at competitive populism. The British economy is deformed by the housing market. When hon. Members talk about the "barometer of the economy", the "engine of the economy" and "leading us out of recession", they use damaging phrases that have gained currency in this country. People observing the British economy have said for years that such talk cripples British economic prospects because it sustains the illusion that the economy can be run on a pile of sterile bricks and mortar.
I know exactly what the argument is about because I, too, have many small builders in my constituency. I do not need to discuss the matter because I understand it. I have been to many houses where a little van is parked outside at 3 o'clock in the afternoon, showing that the small business induced by the housing folly has collapsed and that the owner of that business has lost his job. Based on that business, he has bought an over-priced house for £90,000 that is now worth only £60,000.
The House should not sustain the bubble of that illusion, yet in some way hon. Members on both sides of the House have sustained it for years. I do not subscribe to phrases like "barometer of the economy". The housing market may be a barometer of the economy but it should not be, because this country will not come out of recession into permanent prosperity on the back of a pile of bricks and mortar, the price of which is artifically supported by Government subsidy.
I listened to the hon. Gentleman with interest but I hope that he does not misrepresent the Opposition's view. It will help if we can get the housing market moving again but the Opposition have always held the belief that the prosperity of this country is based on high quality investment in manufacturing industry and the export of services as well as manufactures. That is the prime requisite of any successful industrial economy.
It is interesting that the hon. Gentleman felt moved to correct himself because I sense a note of defensiveness in his remarks. In my view, it is highly justified.
When we talk about the primacy of confidence in the housing market we mean higher prices, so why beat about the bush? If the measure were to succeed—hon. Members on both sides of the House have suggested that it has not had much effect—in promoting "confidence", it would mean higher house prices and higher mortgages. All the crocodile tears about first time buyers are rubbish, because it would mean people gearing up from paying the preposterous current rate of 3·9 times of their incomes to paying even more. It is a deformity of the British economy and does not happen to the same extent in other countries. It deforms people's lives, which are geared to trying to meet that 3·9 times of their income for years, stretching to their middle age.
Whether they eat baked beans is neither here nor there. What is at issue is whether it is sound policy for the value of houses to continue to decline and the market to be so depressed that many thousands of people are in the miserable position of realising that the equity value of their property is less than the value of their mortgage. They are therefore totally locked in and face penury. Anything that can be done to do away with that misery, whether by continuing the relief or, more sensibly, by cutting interest rates, should have the support of the House.
My hon. Friend has spoken to the feeling side of the nation. I want to do the impossible and appeal to its rational sense, which I have reason to believe exists. I have met people in my surgery who are trapped by a policy for which the Conservative party bears much responsibility—leading people to believe throughout the 1980s that the be-all and end-all of economic activity was to get on the housing ladder. It was wrong of us to do so. I do not agree with my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) that Conservative policy is to create a property-owning democracy. Property does not mean houses, and Conservatives, especially modern Conservatives, do not tell people what to do with their money. We give them the choice. As my hon. Friend the Minister of State for Housing and Planning said in a recent speech, the real choice that we should encourage is between whether people want to own or privately rent their house. It is wrong of us to continue to encourage, even at the present sotto voce level, this mumbo jumbo about home ownership.
People must decide whether they want to own their homes. We must try to level the market and allow them to decide. The priority should not be to encourage home ownership, even by this relatively piddling measure—although £600 million is not piddling and could be better used than to prop up prices artificially. We do not want confidence if it means higher prices; we want stability, rationality and common sense in the housing market, and that means the minimum possible subsidies.
I do not dissent from my hon. Friend's view, but he appears to think that there is some marvellous alternative—that people can either buy property or privately rent it. That is not the case. It was true before the war, but since then—because of the trembling structure of the rent Acts, because of the hostility of Labour Governments to landlords and their belief in having council house ghettos all over the place —there has not been that choice. We believe that people should have a choice and own their homes if that is what they want. The point is that there has been little choice; I only wish that there were.
If my hon. Friend is handing me arrows to fire at the Opposition, I am happy to let loose with them. The debate is relatively small stuff compared with the £6 billion to £8 billion—a third of the education budget that we spend, most of it wasted, on propping up the housing market through mortgage tax relief. We all know the story of that. We are discussing a minor amount of taxation on house buying, yet at the other end of the scale we are giving £6 billion to £8 billion of indiscriminate tax relief to rich and poor alike. My points are directly relevant to the overall view, on which I am sure the Treasury rightly keeps an eye, of the housing market. Let us try for once to be a little rational and cool and not mislead the public, or lead them again along a path that has brought many families to the brink of financial ruin.
My hon. Friend's case is that the purpose of the moratorium on stamp duty was to increase house prices. Surely he does not expect us to believe that. Most of us do not want an increase in house prices. The purpose of the moratorium was to improve liquidity in the market.
As I explained earlier, I supported the original proposal for a moratorium, although I was in two minds about it. My hon. Friend has eloquently expressed one of those minds. I did not want then, and I do not want now, the housing market to go into a precipitous slump because so deformed is our economy by the housing market that we cannot risk that happening. If it did, a whole series of dreadful things would happen in the City and elsewhere. Indeed, some are already happening. One reason why I supported the Government was that I wanted the housing market to be held steady rather than watch it go into an abyss.
What is now happening in the housing market looks suspiciously like stability. That is not a bad thing. We should not lead people to believe that the price of their house can grow exponentially over the years with no effort from them, and that the Government have a duty to sustain inflated house prices for all time. Some people argue—in my view, out of the back of their heads—that mortgage tax relief should be increased to boost prices still further.
I could continue like this, but I have taken enough time. I am trying to break through the collusive populism in the House on this matter, which has been so damaging to the country—especially the poorer sector—by misleading people in the economic organisation of their lives. Only a few hundred million pounds is involved, but this time the Government are getting it right.
It is a rare event, but I could go along with about two thirds of the speech of the hon. Member for Buckingham (Mr. Walden). Indeed, I am more likely to agree with him than are many of his hon. Friends. He said that our economy was deformed by the way in which the housing market works. He made an important point in his comments about mortgage tax relief. I am sure that he would agree, as most economists agree, that the boom in 1987–88 was very much led by the property market, just as the recession has also been very much led by it. As prices fell, so the economy moved deeper into depression.
It is not healthy for any economy to be in that position. It is also unusual. The United States and almost all European economies do not operate in the same way as Britain because they do not have the same overdependence on what happens in the property market, whichever way it moves.
I agree with the hon. Gentleman that the Government's central mistake since 1979 has been their belief that there is an automatic virtue attached to home ownership. There is not, and nor is there anything virtuous about renting. It is just a simple transaction that people make and it should not be based on which is the most subsidised option; it should be based on what circumstances suit an individual and his family at any given point in their lives.
In the longer term, we must move away from that over-dependence on one tenure because it has such a dramatic impact on the economy. Not only is it not good social policy; it is appalling economic policy. The hon. Gentleman described the effects of that. From his tone, I suspect that he would have gone further in his point about mortgage tax relief. It does not have any economic benefit and, strictly speaking, it does not help anyone to buy a home. Most objective commentators—not generally politicians—such as the two national inquiries into housing led by the Duke of Edinburgh have said that mortgage tax relief achieves nothing in housing policy.
The difficulty, and it is not unique to the Government, is that every political party that seriously wants power—with the exception of the Liberal Democrats, who usually do not expect to be taken seriously—has a difficult political problem because so many people receive mortgage tax relief. The economic and social aspects are different matters.
At various times some of my hon. Friends, most recently my hon. Friend the Member for Hammersmith (Mr. Soley), have tried across the Dispatch Box to interest Ministers in finding a politically acceptable solution that would break the logjam of that problem, but so far they have shown no interest in reaching any accommodation. In the long run, a Government—or, I hope, a combination of major political parties—must reach consensus because we cannot go on in this way. The problem will not wither on the vine for a long time unless action is taken. We cannot be certain that stamp duty relief has had any appreciable effect on the property market. The state of the construction industry is so appalling—with low unemployment, a small number of starts, and every other indicator depressed—that something must be done.
In the absence of a comprehensive package of measures of the kind that a Labour Government would have introduced, we must lend our support to stamp duty relief. It is not a wonderful innovation, and something more comprehensive is needed to deal with the real crisis in the construction industry. However, it is worth persevering, in the hope that that relief will eventually have some effect. I have no great enthusiasm for that policy, but in the pragmatic hope that it will have some useful effect, I will support my right hon. and hon. Friends in the Lobby.
Every now and then, we would do well to ask ourselves whether, especially on this side of the House, we have truly kept faith with our electors in housing matters. We have spent much of our political and parliamentary careers urging and encouraging people to realise their natural family aspiration to own their own home. By and large, we have been successful in that; but if we had been more successful, this debate would be neither so prolonged nor so intense. Nor would we have opened the Evening Standard a few days ago to see my right hon. Friends the Prime Minister and the Chancellor of the Exchequer portrayed as innocent cherubs—somewhat podgy, but surprisingly underclothed.
The Opposition's new clause is very much in the spirit of early-day motion 307, in the name of my hon. Friend the Member for Crosby (Sir M. Thornton). The Government would have done well to use the interval between the publication of that early-day motion and this predictable debate to announce new measures to stimulate the housing market and to make it easier for people, particularly first time buyers, to purchase their own homes. They noticeably did not do so.
In that interval, I received letters from Prowling Homes, whose headquarters is located in Ruislip. It is a big company which contributes to the local economy, and it urges that stamp duty relief be maintained for some time yet. The same is said by Taylor Woodrow, which is no inconsiderable company. For Taylor Woodrow to have written in similar vein suggests that it has negated the apophthegm that he who pays the Tory piper calls the Conservative Government's tune. A similar letter came from Ideal Homes, which is not located in Ruislip, but which no doubt builds desirable residences all around the country.
The facts are—and I wish that the Government and the House would pay more attention to the facts—that average house prices in London have fallen by no less than one quarter since the peak of the boom in 1989. That is a substantial decline, and the fastest that I have experienced during my 17 years in the House. It indicates that there is a prima facie case for stamp duty relief to be extended. If the market is so depressed, any ameliorating measure, such as perpetuating stamp duty relief, should be welcomed.
That relief pales into insignificance compared with the measure that is really required—the reduction of interest rates by about 2½ per cent. Given that the Government are either unwilling or unable to do so, the next best thing must surely be to maintain stamp duty relief.
Lord Healey, when he was a Member of this House, used to remind us in his engaging way that one of the first things that one learns in politics is that if one is in a hole, it is better to stop digging. The big hole in which our economy finds itself is the result of maintaining astronomically high levels of real interest for far too long.
It was done not because inflation was out of control but because in our membership of the exchange rate mechanism a rate of 2·95 deutschmarks to the pound is some kind of totem or shibboleth. Would it adversely affect my constituents in Ruislip and Northwood—or the other people of London whose house values have declined so much and so fast—if the pound were worth instead only 2·83 deutschmarks or 2·75 deutschmarks? What matters to them is that they can service their mortgages, or can afford a mortgage to enter the property market in the first place.
I genuinely do not understand my hon. Friend's argument. He seems to he saying that the Government should provide a stimulus to the housing market—which in my terms means higher prices—so that first-time buyers can buy property.
My hon. Friend may not understand, but many young people who want to buy a home understand very well. The marginal extra increment on the cost of house purchase represented by stamp duty can make all the difference between a successful and an unsuccessful transaction.
The cynical may argue that stamp duty relief represents only 1 per cent. of the purchase price, and that house values need to fall only by this amount to have the same effect. However, property values have already fallen 6 per cent. on average over the past year. Do we want them to fall further to meet the objective achieved by stamp duty relief?
Reintroducing stamp duty would be to impose a direct tax on mobility and flexibility in the employment market. At a time when substantial and dramatic changes in employment patterns—with companies in various sectors of industry feeling the pinch, and other large companies going out of business—are forcing people to sell up and to move elsewhere for jobs, the Government are making the process more difficult by their desire to reimpose the stamp duty the relief of which new clause 3 seeks to perpetuate a little longer.
Would it not be wiser to consider over the winter period whether other measures could be introduced, such as the cut in interest rates that I suggested? Or stamp duty might be abolished altogether, as my hon. Friend the Member for Romford (Sir M. Neubert) has cogently urged over the years on the basis of his professional experience. After all, there are few areas left in which the House has genuine discretion in tax matters.
It is a matter of principle that we should at least consider using it in this instance. Without the approval of the House, we forwent the right to reduce VAT below 15 per cent. in the next four years. In days gone by, the reduction of indirect taxation was one of the primary methods that the Government used to restimulate the economy. Now we have deliberately eschewed it and I find this exceedingly strange.
My distinguished and learned hon. Friend the Member for Buckingham (Mr. Walden) said that it did not particularly matter whether the housing and construction industries were stimulated and that we should not look to bricks and mortar to regenerate our economy. What was he looking to? Was he looking to the export market? There is not much of a growing export market to the United States where the recession is so deep, or to Japan which is facing such parlous economic problems, or to Europe which faces recession as we do. Anyway, with an artificially over-valued currency, it is all the more difficult for our exporters to get into those markets.
What about aerospace? We all know about the difficulties of the airlines and the retrenchments in that business. What about motor cars? The motor industry is hardly the booming sector for which some people had hoped. What about defence and what about consumption? The savings ratio is so high that one cannot look to the high street to regenerate the economy. Therefore, the costs of extending the relief for a little longer are relatively small.
The Government have shown by their actions that they are not especially concerned about public expenditure: just before the election the public sector pay settlement was ahead of inflation, child benefit was uprated in line with inflation instead of introducing child tax allowances, £1 billion was allocated to the inner cities—
Against those examples of massive increases in public expenditure, to which I add the net contribution to the European Community, the extension of this relief is small beer. That is why I believe that the Opposition have done the House a favour in tabling the new clause and giving us an opportunity to air the arguments.
I accept that the Government said from the outset that the relief would be temporary. They are sticking to their intentions and carrying them out, and, I suppose, one should applaud that, however wrong-headed the end results. I shall not oppose the Government, but I shall not support them because I believe that the constructive criticisms which I have deployed were worth deploying, and I hope that my right hon. and hon. Friends will take note of them.
I shall be brief because this has been a long debate and many hon. Members still wish to contribute. I believe that the new clause should be supported because it offers a small but practical incentive to persuade house buyers to enter the property market to get things moving again.
It is extraordinary that the Government are proposing to end the moratorium on stamp duty at this time. I wonder whether they really believe that the worst is over for the housing market. Many hon. Members, particularly my hon. Friend the Member for Ashfield (Mr. Hoon), drew attention to some of the key housing market indicators. All hon. Members will have seen them, and there is no sign that the worst is over. The latest Halifax index shows that house prices fell again in May. In the first quarter of 1992, there were more than 16,500 repossessions. In 1991, 75,500 houses were repossessed, and those figures represent a 72 per cent. increase over 1990.
All hon. Members know from their constituency surgeries and advice sessions for their constituents that the problems of mortgage arrears continue unabated. There is a massive problem in many constituencies, not least in mine, for people who are living in houses which are heavily mortgaged. Their mortgages now exceed the value of their houses. There are 1–5 million people living in such depressing circumstances.
The Government simply cannot believe that this is the right time to lift the moratorium on stamp duty because it is evident that the housing market is still acutely depressed. If the Government are wrong and believe that the housing market is set to boom, and if some of the green shoots to which hon. Members have referred are apparent in the economy—although I believe that the green shoots, if they ever existed, have shrivelled up and dropped off by now —will they assure the House that they will draw up a fresh set of proposals to deal with the serious problems with which many of our constituents have to live?
I find it difficult to appreciate and understand the argument about cost. As I understand it, the Government want to lift by 1993 the stamp duty in respect of share transactions. If my figures are correct, that will cost the Government nearly twice as much as extending the moratorium on housing purchases.
The housing market is still in the doldrums as a result not only of the recession, which continues in my constituency and many others, but of many years of very high interest rates. Although the recent cuts in interest rates are welcome, they have not slowed the number of repossessions or reduced the extent of mortgage arrears.
We have heard some eloquent and rather philosophical contributions from Conservative Members, but what underscores the issue that we are debating is the fact that the Government do not have a credible housing policy. It is not enough to trot out the rather limp and tired slogans about the property-owning democracy. For many people who accepted the advice of the Government and were encouraged to buy their own homes, the reality of repossession and high personal debt has left a bad taste. A relevant housing policy should encompass the private as well as the public sector, tenants as well as home owners. Sadly, we are some way from such a credible housing policy.
I shall say one or two brief words about the extent of the housing difficulties being experienced in my constituency. I took the trouble to consult all the estate agents in my constituency, and they have provided me with some interesting and relevant material for the debate. The local housing market is depressed for two reasons.
First, as many hon. Members know, it is depressed because of the many job losses in the past two years at Vickers Shipbuilding and Engineering Ltd., which has led to a general lowering of confidence in the future. In fact, it has led to deep concern about what the future holds for people in Barrow and Furness. Secondly, and in particular, it is depressed because of the high level of redundancies among apprentices in my constituency, young men and women who have this year completed their four-year indentures. They have recently been declared redundant and, of course, they are the prospective first-time buyers in my local housing market. They now face the prospect of an uncertain period on the dole—it could be long or short, but we do not know—so there is no prospect of their considering the expensive option of purchasing their own property. Those combined effects have left the local property market in a sadly depressed condition, to which local estate agents see no signs of a substantive recovery.
In that context, all my local estate agents have said in recent days that they want the Government to extend the moratorium on stamp duty. They do not believe that we can press a button, as it were, to extend the moratorium and suddenly create a whole new climate of optimism in the housing market. It is a complex and sensitive market, but it lies at the root of confidence in the economy as a whole, and until confidence returns to the housing market we shall not see green shoots springing up anywhere in the economy.
I accept the view of my local estate agents that this is an important moment not to end the moratorium on stamp duty on house purchases. In my constituency, as elsewhere, ending the moratorium would have a negative effect on the housing market, and that would be bad news for the nation as a whole. So the Opposition proposal would be unlikely completely to transform the present state of the housing market. I wish it were possible for such a change to occur. But to end the moratorium now, when there is no sign of an end to the housing crisis—the market remains in a deep trough of recession—would be a foolish and retrograde step.
It is a novel experience for me, a new hon. Member, to hear a debate of such high quality, with a clear measure of cross-party support for our proposal. I hope that when we vote on the new clause there will be voting with us Conservative Members who have the courage of their convictions.
I agree with my hon. Friend the Member for Romford (Sir M. Neubert) that stamp duty is a bad tax which should be ended. We want to increase mobility of labour. A tax that bears heavily on people wishing to move house because they want to change jobs is damaging.
On the other hand, most people accept that it is impossible to abolish now a tax which raises a great deal of money, when we are faced with a huge public sector borrowing requirement which next year will be nearly £40 billion.
The housing market is flat, as hon. Members have made clear. It is experiencing little recovery, and that is holding back the recovery in consumer spending on which a general recovery of the economy could rest.
I welcomed the Government's decision to lift stamp duty for a limited period, up to 20 August, to give a short-term boost to the property market and increase liquidity. That move has not had the impact that some might have expected, but I remind the House that there are still six weeks to go, and with any time-limited relief one would expect a surge as the last days of the relief approach.
A significant example of that occurred when Lord Lawson was Chancellor of the Exchequer. He abolished dual mortgage tax relief for couples and, instead of abolishing it overnight, he had a moratorium for several months. What occurred towards the end of that period resulted in an enormous surge in the housing market. Indeed, that was one of the principal causes of the overheating of the economy.
It is inept of the Opposition to propose a new clause that would extend the termination date of the moratorium before we have arrived at the first termination date of 20 August. That could abort the surge that we might expect in the coming six weeks. Had Opposition Members thought the issue through, they would have waited until 20 August and then, on our return after the summer recess, made the proposal, when it could have been discussed more sensibly.
Another argument against the new clause is that it would cost £430 million more this year when, as I said, the Government's finances are under severe pressure. One way to make it possible to reduce interest rates—which, above all, would help the housing market and reduce the pain felt by those locked into high mortgages—would be to reduce the PSBR. I hope that there will be strong support from Opposition Members this year as each Government Department attempts to reduce its spending and bring Government finances more into balance. The more success we have in achieving that, the faster interest rates will come down. That is why I shall support the Government in opposing the new clause.
The new clause goes to the heart of the Conservative bogus commitment to lift the burden on home owners and the housing industry. What reasons have the Government given for reimposing stamp duty at this time? Do they claim that the recession is over, that recovery is under way or that the housing market is beginning to boom?
Even the Government's friends are sceptical about those issues. Like other hon. Members, I receive many begging letters. Few have been as pitiful as one from the House-Builders Federation, the director of which sent me a copy of a letter he had written to the Prime Minister, saying:
now that the euphoria has passed"—
clearly, he has been slightly unhinged—
it must be evident to you that nothing much has changed since 9th April. The economy is still locked in recession and Treasury claims of recovery are widely disbelieved. Indeed, they are thoroughly discredited.
Commenting on the performance of the Chancellor, he says of the Treasury:
The housing market has been one of its greatest failures … we built fewer houses than in any decade since the 1940s. This imbalance alone left a shortage of more than one million homes by 1990.
The House-Builders Federation, speaking for the private house building industry, as Conservative Members have done in this debate, writes:
Despite lower house prices and interest rates…the continued recession is holding back the housing market. After signs of an improvement in January and February, the housing market has slowed down markedly in May and June…If further damage to purchaser confidence is to be avoided, the existing stamp duty moratorium should be extended beyond 20th August…An improving housing market, with its stimulus to retail spending and to employment through new housebuilding, can play an important role in economic recovery.
Government figures pay eloquent testimony to those sentiments. The slump has never been clearer. In my constituency and in Scotland generally, the boom in the issuing of mortgages by building societies occurred not in 1987, 1988 or 1990—although mortgage lending was much higher then—but in 1984. By 1991, lending had hit a 10-year low. That has meant, for example, that Edinburgh house prices have fallen dramatically and, as we have heard, they have fallen in London and throughout the country.
No wonder the new clause is supported by the building industry, the mortgage lenders and everyone who believes that people should not be prevented from buying a first home or from moving to a new home, whatever the reason. If the Economic Secretary does not accept it, he will find that the Government's erstwhile friends will desert them, never to return. A time of deep recession is not a time at which to drive up house prices.
If the new clause is not accepted, 20 August 1992 will go down in housing history as the day when an iron curtain was drawn, separating tens of thousands of families from their dream of home ownership for the foreseeable future. According to the housebuilders, the frosty freeze that will follow 20 August will make last year's housing slump seem like a boom. After a long, cold summer and a long and bitter winter—a winter of discontent—for milions of home owners and aspiring home owners, 20 August will come as the Government's nemesis.
There is time, however, for the Government to listen to their friends in the building industry, who donated to their election campaign the lavish sums that put them in power and gave them the power to vote for or against home owners and aspiring home owners. We wait, but not with bated breath.
I entirely deny that the Government introduced the moratorium in late 1991 as a gimmick. It was a responsible gesture, aimed at injecting some life into the housing industry.
As one who has spent almost all his career as a civil engineer in housing, construction and property development, I consider the continuation of the relief immaterial: I do not believe that it will have any effect, adverse or positive, on the housing market. In the past it has exerted little pressure on the market; few additional sales have resulted. Anyone trying to buy a house anywhere in the country now is looking not for a I per cent. price reduction, but for a reduction of 5, 10 or 15 per cent.
I want to dispel some of the doom and gloom. In the south-east a reduction of 25 per cent. or, more probably, 30 per cent. is possible, but in the more responsible areas —the north, the north-west and the north-east—house prices never reached such crazy levels. House owners and house builders are suffering the consequences of those price rises. My hon. Friend the Member for Buckingham (Mr. Walden) blamed the construction industry for the present parlous state of the economy, but I believe that it is the other way around: the economy is in such a difficult position that people arc unemployed, fearful of becoming unemployed or worried about the falling value of their properties.
I am grateful to the Government for introducing the minor benefit of the moratorium last year, but, rather than continuing it, they should reduce the amount of public expenditure—hundreds of millions of pounds—that is involved in its perpetuation. The house building industry wants positive action. It wants lower interest rates and more action on repossessions; it wants pressure to be exerted on the insurance industry, because the present indemnity insurance premium levels are criminal. It does not help house buyers to make them pay a swingeing insurance premium for a mortgage of more than 70 or 80 per cent.
The housing industry is probably the most private-enterprise oriented industry in the United Kingdom. It does not want subsidies; it wants the real market to apply, and it is more than capable of lifting itself to its former level. So often in the past, successive Governments have used the building industry as a regulator of the economy. At difficult times they have held back public expenditure, especially on council houses and infrastructure; at boom times they have expected too much of the industry, and the economy has overheated as a result.
I signed the early-day motion tabled by my hon. Friend the Member for Crosby (Sir M. Thornton), but I told him that—along with other hon. Members, such as my hon. Friend the Member for Romford (Sir M. Neubert)—I had pressed for the total abolition of stamp duty for at least 10 years. The Government should bring that about in the next few years, for I am certain that, if left to its own devices and to natural market forces, the housing industry will lift off. This minimal measure will not do much.
The stamp duty changes that were introduced last December were not, in my view, part of a coherent economic policy or of a coherent housing policy. They were a recognition by the Government that economic recovery was not happening and that an election was coming. It was a matter of electoral expediency, in the crudest sense.
The problem for the Government is that economic recovery has still not happened and that the election has come and gone. The Government now feel that the measure that they introduced to try to win some popularity has served its useful purpose.
I agree with some of the comments made by the hon. Member for Chorley (Mr. Dover) about the Government's housing policy. They were very interesting. However, stamp duty is a matter not of general housing policy but of its potential impact on the housebuilding industry. If I were feeling a little more charitable about the Government's designs, I might even accept, as the Chancellor of the Exchequer said at the time, that there was recognition of the fact that the housebuilding industry could be one of the important motors for economic recovery. If the Government did recognise that fact, when they looked around they found that there were not many alternatives.
The Government looked at the council house building sector and found that it no longer existed because their bigoted and dogmatic policies towards council housing over the years had killed it off. They were not prepared to take the obvious step of releasing capital receipts—which, by any logical definition, would have had no impact on the public sector borrowing requirement—which would have allowed local authorities to build council houses. They looked at the housing association sector and saw a little increase there, but the Treasury was growing worried about the cost. The Government also looked at the private rented sector and found that, after their 13 years in power and an awful lot of talk, the private sector was continuing to decline.
Housebuilding in the private sector remained virtually steady throughout the 1980s, though the private sector had not replaced the fall-off in the council house building sector. By the early 1990s, however, private housebuilding had fallen to a record low. Stamp duty exemption was introduced against that background.
If we examine the impact of that measure so far, it is fair to say that there are real doubts about its effectiveness. It has had a limited effect on the housing market; there has been no great take-off. In Sheffield, which has not been so badly hit by the fall in house prices and the fall-off in activity as other parts of the country, there are no clear signs of a sustained recovery.
The question that we should be asking is not what has happened as a result of this measure but what the impact will be if the exemption is removed. It is just possible that the failure of the housing market to take off in the last few months was not due to the stamp duty changes. It is just possible that the housing slump would have been much worse without those changes. The real worry and concern is that the reimposition of stamp duty now will send the housebuilding industry into yet further decline. Confidence in the housebuilding sector is very delicate. The reimposition of stamp duty could have a significant impact in the wrong direction.
Before I came to the House today, I asked a few builders and estate agents in Sheffield for their views. Obviously they have a vested interest, but they also have
knowledge that is worth sharing. Garton, Lockwood and Riddle, one of the leading estate agents in Sheffield, said that there is a real problem of confidence, that ending the exemption will be just another element in the equation which will be unhelpful to recovery and that the market is slow. The House-Builders Federation said that
while the stamp duty moratorium … may not have had the positive effect that was hoped for, its reimposition will simply depress confidence further and delay recovery.
That point is borne out by Gleeson Homes, a major housebuilder in Sheffield. It referred to the real problems caused by the deep recession and said that the reimposition of stamp duty will further weaken any return of confidence. It said:
We believe that by suspending Stamp Duty it will not necessarily create an early market recovery but reimposing Stamp Duty will have a further depressing factor on an already weak, buyers confidence.
Omega Homes have said that people have been rushing to meet the deadline in the last few weeks, but now it has all gone flat. Henry Boot told me that any reduction could have a detrimental effect on the housing market, which is just showing a few signs of recovering. And, of course, there are the comments by Tim Melville-Ross of the Nationwide building society, who said that the Government proposals could have a fatal impact.
It is very clear from all this that there are some doubts so far about the effectiveness of the measures taken last December and a very real worry about the impact of reversing those measures at this time.
There are two questions for the Government. Is the economic recovery so assured that the Government can afford to take any steps that might curtail it? I believe that the answer to that has to be a very clear no. Secondly, is the public sector borrowing requirement so completely out of control that the Government cannot afford another £400 million to continue the current exemption?
The real problem for the Government is that one of their economic disasters, the PSBR, is now constraining their ability to deal adequately with another of their disasters, the economic slump which they have created. My hon. Friend the Member for Wrexham (Dr. Marek) gave the Government a way out with some suggestions about how they could negate the effects of the PSBR increases that would come from a continuance of the exemptions. Therefore, the only question left open concerns the impact on economic recovery.
I hope that all hon. Gentlemen who spoke in favour, in principle, of the proposals in the new clause moved by the Opposition will support it in the Lobby. I do not believe that any of them, in the very delicate state of the economy, can ignore the risk that the measures that the Minister is proposing might have the very damaging effect of curtailing the possibilities of recovery. I will put it no more strongly than that. I therefore think that it is worth taking the risk, for £400 million, of supporting the new clause and giving a bit of hope to the housebuilding industry in the very difficult situation that it is experiencing.
When Ministers announced the moratorium on stamp duty it was part of a package of measures designed to stimulate recovery in the housing market. The argument deployed by the then Financial Secretary was that the measure
would not transform the world
but would give a mild impetus towards housing recovery.
I have a dreadful feeling as we sit here tonight that there were two kinds of impetus towards the introduction of the moratorium. Certainly the depth of the housing crisis with which Ministers were confronted was one, but I suspect that the second was the ticking away of the general election clock sounding very loud and clear in Ministers ears, and providing a very clear incentive to tackle the problems of the housing crisis.
The hon. Member for Blyth Valley shouts "Cynical". Well, maybe I am.
With its sister policy, the mortgage rescue plan devised by the building societies, the stamp duty moratorium was supposed to kill two birds with one stone: first, to give a boost to the housing market; hut, secondly, to give a boost to the Conservatives' electoral fortunes.
Six months on, the Government have certainly achieved one objective, but they have failed lamentably in the other. Housing and the economy as a whole remain stuck deep in recession. The housing crisis that prompted the moratorium in the first place has not gone away; arguably, in some respects, it has even intensified. Hon. Gentlemen are therefore faced with a very simple question: why is it that the measure that was so important six or seven months ago is no longer relevant? If we accept that the housing crisis is as deep today as it was in December or January last, why should the moratorium be withdrawn?
Perhaps the hon. Gentleman will accept from me an answer to that question. The letter from the House-Builders Federation to which there has been reference says that the moratorium has had very little effect on the housing programme. The relief is not the primer that we hoped it would be, and it is costing £430 million. Has not the House-Builders Federation answered the hon. Gentleman's question?
I assume that the hon. Gentleman accepts that, in effect, Ministers have wasted about £400 million of public money. I see nods from Conservative Members. And this is from a Government who accept financial rectitude and tight control of public expenditure, a Government who always have the correct financial and economic answers.
Let me tell the House what the House-Builders Federation said. I have a letter from Mr. Adamson, the regional chairman in the northern counties region, which says:
I accept that suspending stamp duty will not kick-start the market on its own, but reintroducing it will be a further depressing factor to house purchase confidence.
The hon. Member for Crosby (Sir M. Thornton) made a very important comment when he said that the housing market is sensitive and very prone to shifts in confidence. It is confidence that counts, yet here we have an example of the ways in which the Government undermine confidence in the very housing market that they are supposed to support.
I refer to comments of the hon. Gentleman's hon. Friends—and I note the nods from Conservative Members—that the money has been wasted.
When this measure was introduced, Ministers made it very clear that it would take some time to become effective. We have now had six or seven months to test its credibility. I hope that when the Financial Secretary introduced it he did not have in mind just the period leading up to the general election and immediately after it. That would give rise to a great deal of cynicism among hon. Members on both sides of the House.
The housing crisis has not gone away. The number of families losing their homes through repossession has hit 144 per day. As is normal in these situations, Conservative Members are indifferent to the consequences of their own Government's policy. On the programme "Desert Island Discs" a few months ago the Prime Minister, with his finger on the pulse of public concern, as usual, told Sue Lawley:
Well, we stopped, if you recall, the repossessions before Christmas.
Let the Prime Minister and other Ministers express that sort of sentiment to the 126 families in the Darlington area who had mortgage repossession orders against them in the first four months of this year—a 9 per cent. increase on the number for the same period last year. In the north-east as a whole about 1,670 families lost their homes in the first four months of the year, compared with 1,284 in the same period last year.
A little while back, the hon. Gentleman was quite candid and straightforward. He said that the money that the Government had spent so far had been wasted. In that case, why does he want to extend the exemption to March next year?
The hon. Gentleman is obviously confusing what I have said with what his hon. Friends have said. They have said that the £400 million has been wasted, and others nodded in assent.
It may be that in terms of priming the housing market the money has been wasted, but the hon. Gentleman should not forget all those families who have been grateful for that tax concession when buying their homes. The money was not wasted because it stayed with the people.
In that case, if the measure was important enough in the past seven months and if it has failed lamentably, as it has, to stimulate the major pick-up in the housing market for which we all hoped, why on earth, at this juncture, are the Government saying that enough is enough? Why should not the measure be given a chance to benefit other families, other owner-occupiers and young families seeking to get on the first rung of the housing ladder?
By ending exemption, the Government will be seen as delivering a kick in the teeth to young families who are looking to get on the first rung of the housing ladder. Far from kick-starting the recovery in the housing market, by ending the moratorium on stamp duty, the Government will kick away the prospective recovery in the housing market. The crisis is as deep as ever and the Government, by withdrawing what paltry assistance they offered six months ago, leave us to draw no other conclusion than that the whole exercise was designed not to help people save their homes but to help Conservative Members of Parliament to save their seats. That was the cynical purpose underlying the measure.
The exemption was a cynical and crude exercise in manipulating genuine public concerns about the difficult circumstances of home owners. The mortgage rescue plan and the temporary exemption of stamp duty have fulfilled their purpose for the Conservative party but not for those who are suffering the consequences of the policies pursued by the Government. I only wish that Conservative Members would listen not only to the House-Builders Federation but to the Royal Institution of Chartered Surveyors and the building societies, and to the estate agents in my constituency, whom I contacted today, who are urging that the moratorium be continued if the fragile recovery that may be around the corner is not to be brought to a shuddering halt.
As the hon. Member for Crosby said, we all know that confidence is the key to recovery in the housing market. After all, we are told that all the other ingredients are in place—prices have fallen, there is a glut of properties on the market, it is a buyers' market—but people are not buying because they lack confidence or the incentive to do so. The Government can help with both. They can pursue measures to stimulate the economy by cutting interest rates, by investing in the regions, in infrastructure and in training. They could also stimulate housing more directly. For example, they could ensure that there is a phased release of capital receipts to allow local authorities to make good use of the money that is lying useless in bank accounts around the country. Those assets should he put to use. They should not be allowed to gather dust.
The Government should not be closing options at this stage; they should be opening them up. First-time buyers are the mortar of the housing market and they must feel that it is worth their while to invest in a home. Suspending stamp duty for another nine months will not, by itself, instil new confidence. However, it will be a pointer in the right direction. The removal of the concession can only make matters worse.
My hon. Friend the Member for Barrow and Furness (Mr. Hutton) said earlier that young families who are hoping to get on to the first rung of the housing ladder will look rather askance at a Government who claim that they cannot continue the moratorium because of public expenditure concerns, but who, at the same time, are prepared to spend £730 million ending stamp duty on share transactions as from next April.
I have a direct point for the Economic Secretary to the Treasury. No doubt some Conservative Members are genuinely concerned about the ending of the moratorium, but they will not be prepared to put their money where their mouths are. They will vote against the new clause. I have no doubt that the new clause will be lost as a consequence of that.
However, what are the Government prepared to put in place of the moratorium to ensure that there is a recovery in the housing market? What are they going to do to ensure that there is new investment in housing so that we begin to house our homeless people and start to bring an end to the repossession crisis that is gripping my constituency and others around the country? What new measures will the Government introduce tonight? By all means end the moratorium on stamp duty, but let us hear from the Conservative Benches exactly what new policies the Government are prepared to bring forward to stimulate the recovery that we all want to see in the housing market.
There are perhaps two things that we can all agree on at the end of this extensive debate. The first is the comment of the hon. Member for Barrow and Furness (Mr. Hutton) that this has been a very high-quality debate and the other is that stamp duty is not a much-loved tax.
I will try to persuade the House that stamp duty raises sums of money that the Government cannot ignore or forgo. I will also try to persuade the House that when introducing a concession for a time-limited period, it does not induce one to embark on further concessions unless one sticks to the conditions. That does not mean that they are immutable, but that is a powerful argument for sticking to the concession that has been agreed.
If money is available, there is a question of judgment as to how most effectively it can be spent in the regeneration of the housing market and in other social and industrial areas and priorities for public expenditure. We have debated some of the criteria and considerations to a high standard.
I want first to set out the financial parameters. The concession has cost £400 million. During that time, 540,000 housing transactions have benefited and have not had to pay stamp duty. Although the moratorium has been of limited value, it has been of real value. It has meant that a number of transactions have been brought forward, and a number of individuals have not had to incur an additional marginal capital cost on the purchase of their properties. That is still happening, for the moratorium period has not yet ended. Many people are bringing forward their house purchases, to the benefit both of the construction industry and the general liquidity of the housing market.
The hon. Member for Wrexham (Dr. Marek) asked what amount of money the delay in the implementation of TAURUS has released. The answer is about £850 million. Of course, the concession, which costs about £400 million, leaves a balance. The hon. Gentleman rightly asked, "Is not that money available?" Sadly, it is not available. The balance of those sums is included in the Budget strategy of my right hon. Friend the Chancellor. It is part of the overall equation of income and expenditure of the Government; therefore, it is not money which has been released and which can easily be spent.
If we were to extend the moratorium, it would be an additional cost which would have to be financed by additional borrowing, additional taxation or cuts elsewhere in public expenditure. It behoves hon. Members, principally Opposition Members, who easily call for an extension to say where the money would come from, what additional tax or borrowing burden they would be prepared to live with, or what public expenditure cuts they would be prepared to make.
I shall complete what I was saying about the financial parameters, because they are very important. The moratorium cost £400 million. Were we to extend the moratorium, as the new clause provides, for the rest of the financial year, the additional cost is estimated to be £430 million. That is not an insignificant sum, even in terms of an addition to the borrowing requirement.
One of my responsibilities in the Treasury is to help to raise the funding requirement through national savings and through the gilt-edged markets. That is not easy. Substantial sums are involved. We are talking about very material additional amounts which would be bound to inhibit the extent to which we could further reduce interest rates at a later date or the extent to which we could further reduce taxes—objectives to which the Government have firmly adhered.
My hon. Friend has said quite clearly that the moratorium has persuaded people to bring forward their house purchases. Does he agree that if the moratorium were extended to the end of this year, thereby extending the house-buying season, other people would bring forward their house purchases? If they brought forward their house purchases, what impact would that have on the recovery of the economy? What impact would that have on tax revenues? What impact would that have on the reduction in the cost of unemployment?
I was about to refer to my hon. Friend's intervention, because I listened carefully to what he said. His proposal would cost another £220 million. That money would have to be found from one of the sources to which I referred. Also, our hon. Friend the Member for Bridlington (Mr. Townend) said that part of the effect of increasing liquidity by bringing forward sales would be diminished if we announced that we would extend the exemption period, because people would relax and be less keen to complete sales early.
Although it is not the intention to have an enormous bunching of house sales towards August, that would be the effect of a finite date on the exemption period. Wherever we set that, whether later in the financial year or at the end of it, we would have the same effect. The substantial answer to my hon. Friend's proposal is that it would cost us £220 million—again a highly significant sum.
The hon. Member for Hornsey and Wood Green (Mrs. Roche) referred to the problems of first-time buyers in London. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) referred to the 25 per cent. reduction in house prices in London. The Government are very conscious of the personal problems that that imposes on many families who are struggling with mortgage repaymeois. We are also very conscious of the difficulties that have been faced in the construction and property-related industries because of it, but, to the extent that prices have fallen, the only group who have benefited are first-time buyers, because property prices are more affordable. Of course, I acknowledge that that depends on whether someone has a job, can afford the mortgage payments and so on. However, more affordable accommodation at least offers more hope to first-time buyers than the ridiculous, spiralling boom prices that many of them faced previously.
My hon. Friend the Member for Crosby (Sir M. Thornton) made an outstanding contribution to the debate. He said that the debate was about confidence in the housing market. That point was reiterated by my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant). I acknowledge that confidence is essential to both prospective buyers and people maintaining their financing commitments once they have bought a home.
However, the Government should not try to rekindle confidence by fiscal or other measures that simply inflate house prices still further. The Government already have in place a range of measures, including mortgage interest tax relief and other financial supports. We provide substantial support for home ownership. Surely the main factor that will revive confidence in the housing market is not fiscal stimulus provided by the Government but economic policies that lead to further reductions in interest rates when it is sensible and responsible to cut them. Our policies should provide a sustained basis for more liquidity and healthier prices in the market, but especially more liquidity.
If the hon. Gentleman will permit me. I shall make a little progress. I will come to his remarks later.
The hon. Member for Leeds, East (Mr. Mudie) referred to unemployment in the construction industry and in his constituency. I readily acknowledge that the social and employment impact of the recession in the housing market has been serious. Those of us who represent constituencies in the south are at least as conscious of that as the hon. Gentleman.
While my hon. Friend the Member for Romford (Sir M. Neubert) understood the Government's position, he reiterated his long-held conviction that we should get rid of stamp duty altogether. He espoused that conviction in compelling fashion.
As I said, stamp duty is an unloved tax and abolishing it altogether is an appealing line. However, the cost of doing so would be £1 billion. Approximately £800 million is raised from transactions up to the current threshold, but another £200 million to £300 million over and above that is raised from much higher-priced properties. The total amount is about £1 billion. To abolish it would impose on us opportunity fiscal costs. Where would we raise the revenue from—extra borrowing or cuts in public expenditure?
I cannot predict in the longer term the decisions of the Government and the Chancellor on stamp duty. All such taxes are examined from year to year. But the Government and the Conservative party have a good record on stamp duty. Since we came to office we have not only halved the rate of stamp duty on property but increased the threshold twice.
Does my hon. Friend the Minister recall that we seemed to find it relatively easy to get rid of stamp duty on all exchange dealings and share transfers, at a cost of almost £1 billion yet we seem to find it incredibly difficult to get rid of it for the much worthier matter of house purchase? Many of us find it extremely difficult to walk through the Lobby in support of stamp duty—a tax to which most of us have objected for decades. Can he at least tell us that there is some prospect that in years to come, sooner rather than later, we will consider getting rid of stamp duty altogether?
We can always consider it. However, it would be improper for me to hold out false hopes to my hon. Friend. I am not in a position to say that we anticipate or intend to abolish stamp duty. The considerations that led to that decision for paperless transfers in the TAURUS system had as much to do with the new technical systems that were being imposed and the attractions of the London market for international share dealings as anything else. Stamp duty is a duty on documents and it extends to not only financial transactions and house purchases but other documents.
My hon. Friend the Member for Cambridgeshire, South-West said that reassurance about the Government's commitment to home ownership was required. I am happy to provide that reassurance, even though my hon. Friend the Member for Buckingham (Mr. Walden) is not in the Chamber, as he also made an interesting speech, which questioned the import of the remarks made by my hon. Friend the Member for Cambridgeshire, South-West.
The Government are committed to maintaining and encouraging home ownership, and the range of measures that we have already implemented should stimulate it. The stamp duty concession was designed to promote and encourage home ownership, as were many other measures announced by my right hon. Friend the Chancellor. A testimony to that is the £600 million worth of payments to people on income support who are having difficulty with their mortgages.
My hon. Friend the Member for Cambridgeshire, South-West said that the boom went too far, too fast, and that, as there was no prospect of its being repeated, we could afford to extend the concession. Large sums of money are involved and, as he rightly remarked, it is much more important for us to pursue policies designed to reduce interest rates and to maintain restraint on public expenditure.
The hon. Member for Ashfield (Mr. Hoon) dismissed the moratorium, but then called for its extension. That paradox was also implicit in speeches by the hon. Member for Wrexham and others. They called the moratorium a political ploy and described it as being of marginal benefit, if any, but also called for its extension. I have mentioned the cost involved. That is real money and it is a substantial amount of money, which remains in the private, rather than the public, sector.
In a brave and interesting speech, my hon. Friend the Member for Buckingham said that housing should not be a barometer of the economy and that high-priced property is a deformity of the economy. I acknowledge the intellectual persuasion of much that he said, but it is a question of "where you are at" and not "where you come from". For many years, substantial support has been given to the ideal and the reality of home ownership and the Government are not about to abandon that or to undermine it in any switch of policies.
The hon. Member for Knowsley, North (Mr. Howarth) supported an extension of the moratorium, in the absence of other Government policies. I have sought to explain that the Government have other policies—notably on the broader economic front—which are designed to return a healthier degree of liquidity in transactions to the property market.
My hon. Friend the Member for Ruislip-Northwood was right to remind the House that owning one's home is a family aspiration and that for many people in London ownership has had to be deferred because of the difficulties that they face. As mortgage liabilities have in many cases exceeded the value or properties, following the fall in prices, home ownership has also become more difficult for those who have mortgages on their homes to realise.
My hon. Friend said that stamp duty was a tax on mobility. The substantial reduction in house prices has reduced the differential between prices in the north and south of England. During the boom, prices spiralled up in the south. Although the fall in price has been injurious to many home owners, it has meant that the differential has narrowed. If anything, that should encourage mobility rather than discourage it.
My hon. Friend the Member for Bridlington was right to concentrate on public expenditure. It is essential that the Government are mindful of the impact of public expenditure on their ability to deliver lower interest rates and lower taxation in years to come. I am sure that all my hon. Friends agree that the Government have an essential early responsibility to get a grip on public expenditure if we are to deliver the sort of political promises with which we gained the trust of the electorate at the general election. We shall not do so if we grant extensions and engage in expenditure of this order.
Stamp duty is but one of many items on which the Government will rightly be pressed for concessions to bring personal relief, but we have a greater responsibility. We must bring the benefits of lower interest rates, lower inflation and lower public expenditure to our economy.
The hon. Member for Edinburgh, South (Mr. Griffiths) gave an apocalyptic, theatrical description of his predictions for Scotland. I acknowledge that there have been serious problems with the depth and severity of the property recession in Scotland, but that alone is not a reason for extending the relief, given the cost for the country as a whole.
My hon. Friend the Member for Chorley (Mr. Dover), whose considerable knowledge and experience in these matters is acknowledged throughout the House, also supported the case for total abolition, about which he has spoken on many occasions. I am sorry that I cannot offer him that prospect tonight, but I hope that he understands why we must reintroduce stamp duty in August.
The hon. Member for Sheffield, Attercliffe (Mr. Betts) said that as the market would have been much worse without the moratorium, now is not the right time to abolish it. However, although the market is still low and there are serious problems, there are also some positive signs. The figures for housing starts and completions in May were up by 4 per cent. and 1 per cent. respectively. Many building society predictions show substantial increases in the turnover of property transactions as well as prices in the remainder of this year.
The hon. Member for Darlington (Mr. Milburn) accused us of a cynical political ploy. It would have been a cynical political ploy if the Chancellor had announced the abolition or the substantial raising of thresholds permanently, won the election and then reneged on that.
[Interruption.] No, it was always clear that the measure was for a finite period of time to bring much-needed relief, liquidity and some support to the property market during a difficult time. The fact that we have been able to reduce the average mortgage interest rate from 15·4 per cent. to less than 11 per cent. shows that the Government's policies are working and we are moving in the right line. To abandon those policies with public expenditure commit-ments that would derail us would be imprudent and the Government could not responsibly offer such a course to the House.
Therefore, although I understand the concerns and representations of all my hon. Friends, I hope that they will understand that, for public expenditure and other reasons, it is essential and important that we revert to the imposition of stamp duty on the date originally given.
We have had a good debate and, in some ways, its nub was when the hon. Member for Faversham (Mr. Moate) intervened in the Minister's speech and presented him with the option of cutting the duty on share transfers or extending the moratorium on stamp duty. Presented with such an option, I should have thought that share transactions could bear tax for a few months longer so that the Government could find the extra £220 million necessary for them to accept the Opposition's new clause. That would be straightforward because, ultimately, getting the economy right and lifting the country out of recession are far more important than allowing shares to be exchanged without tax for a few more months. No harm would befall the City or the international capital markets if the Government chose to do that.
The Minister tried to muddy the waters a little by implying that the Government had a good record on interest rates because they were already down to 11 per cent. So they were from the high of 15·4 per cent. that we experienced for a year and a half a few years ago. Interest rates were above 10 per cent. for some 20 per cent. of the time in which the last Labour Government were in office, whereas they have been below 10 per cent. for only 20 per cent. of the time in which the present Conservative Government have been in office. When hon. Members compare the record of the past Labour Government with the present Conservative Administration they will see that, by and large, interest rates are high when a Conservative Government are in office and much lower under a Labour Government. There was a secret agenda for the Conservative Government to have high interest rates so that they could have high real interest rates.
I agree with the Economic Secretary that this has been a good debate, in which many different views have been expressed. It was nice to hear speeches from seven or eight Conservative Members and eight Labour Members. The Labour speeches were all individual and targeted at the problem. My hon. Friends made the case for the new clause. Although it will not solve the problems of the recession, if the Government are not prepared to do anything else at least it will do something to help the country when it comes out of recession.
We were treated to amazing pirouettes by a number of Conservative Members. I shall start with the hon. Member for Crosby (Sir M. Thornton). He said that it did not matter what is contained in an early-day motion because it is simply an expression of opinion. He invited us to believe that if the House did not like a particular set of opinions, it did not matter because he had plenty of others.
I wonder what his constituents in Crosby will think. It is hardly worth him putting his name to an early-day motion if, at the slightest pressure from the Whips, he says, "I do not really mean it, or if I do, I do not mean it that much. I shall exercise my beliefs in the right Lobby in the interests of my constituents—but I shall be persuaded by the Whips to go elsewhere."
That was not the view of the hon. Member for Ruislip-Northwood (Mr. Wilkinson), who made a principled speech. He did not say that he would support the Opposition, but he said that he would not support the Government. He was the only Conservative Member to say that and he has my respect for doing so.
The hon. Member for Bridlington (Mr. Townend) said that, as there are still six weeks to go before the relief from stamp duty ends, there is still plenty of time. He implied that we should ask for a recall of Parliament on 21 August to debate the issue. I do not think that there is much chance of that. Although there are six weeks left, people cannot suddenly buy a house. They have to exchange contracts, proper searches have to be made and the conveyance procedure must be carried out. Indeed, moving from one house to another depends on many agreements in a chain. All that takes time, but there is no more time. The Government now know what removing the exemption from stamp duty will mean to the housing market. Six weeks may appear to be a long time, but it is not.
The hon. Member for Buckingham (Mr. Walden) made a very different speech and I agree with the Economic Secretary's analysis of it. Most Labour Members felt that the hon. Gentleman made some good points. However, as the Economic Secretary said, it is not a matter of where we want to start from, but where we are now. I have a great deal of sympathy for what the hon. Member for Buckingham said. He spoke his mind and added to the debate.
We believe that there are better ways of spending £220 million—such as helping manufacturing industry or, if possible, reducing interest rates. The Government either cannot or will not do that. Because of that attitude, the new clause would help when the economy eventually begins to move out of recession. That has not begun yet, which is why the exemption from stamp duty has not really been successful—but it would be when we do begin to move—[Interruption.] The hon. Member for Lancaster (Dame E. Kellett-Bowman) has not been here during the debate. I hope that she has dined well. Making silly noises and signs does not help or add to a debate in which about eight Conservative Members and eight Opposition Members have spoken—and which, by and large, has been one of the best debates in the House for some time.
Order. The House is not giving the hon. Member a fair hearing. Right hon. and hon. Members who want to hold conversations must either do so quietly or remove themselves from the Chamber so that the rest of us can hear the hon. Member.
That has enlivened the debate a little. I am reaching the end of my remarks.
The continuation of stamp duty relief would be useful if we move out of the recession. The cost of £220 million could be budgeted. The duty on share transactions can be delayed if the Government so choose. That presents them with a clear choice, but I understand that they have decided to terminate the relief in August.
We will see how many Conservative Members turn on their heads and vote for the cessation of stamp duty relief and for a continuing crisis in housing. I urge my hon. Friends to join me in the Lobby in voting for new clause 3. It is not the complete answer. There are better ways of spending the money and of helping manufacturing industry, which is absolutely necessary if we are to survive as an industrial nation. However, I invite the House to join me in voting for the new clause because it will provide some help in alleviating the crisis in housing that we all want to see come to an end at the earliest opportunity.
|Division No. 54]||[19.57 pm|
|Abbott, Ms Diane||Clark, Dr David (South Shields)|
|Adams, Mrs Irene||Clarke, Eric (Midlothian)|
|Ainger, Nick||Clarke, Tom (Monklands W)|
|Ainsworth, Robert (Cov'try NE)||Clelland, David|
|Allen, Graham||Clwyd, Mrs Ann|
|Alton, David||Coffey, Ms Ann|
|Anderson, Donald (Swansea E)||Cohen, Harry|
|Anderson, Ms Janet (Ros'dale)||Connarty, Michael|
|Armstrong, Hilary||Cook, Frank (Stockton N)|
|Ashdown, Rt Hon Paddy||Cook, Robin (Livingston)|
|Ashton, Joe||Corbett, Robin|
|Austin-Walker, John||Corbyn, Jeremy|
|Banks, Tony (Newham NW)||Cousins, Jim|
|Barron, Kevin||Cox, Tom|
|Battle, John||Cryer, Bob|
|Bayley, Hugh||Cummings, John|
|Beckett, Margaret||Cunliffe, Lawrence|
|Beggs, Roy||Cunningham, Jim (Covy SE)|
|Beith, Rt Hon A. J.||Cunningham, Dr John (C'p'l'nd)|
|Benn, Rt Hon Tony||Dalyell, Tam|
|Bennett, Andrew F.||Darling, Alistair|
|Benton, Joe||Davidson, Ian|
|Bermingham, Gerald||Davies, Bryan (Oldham C'tral)|
|Berry, Roger||Davies, Rt Hon Denzil (Llanelli)|
|Betts, Clive||Davies, Ron (Caerphilly)|
|Blair, Tony||Davis, Terry (B'ham, H'dge H'I)|
|Blunkett, David||Denham, John|
|Boateng, Paul||Dewar, Donald|
|Boyce, Jimmy||Dixon, Don|
|Boyes, Roland||Dobson, Frank|
|Bradley, Keith||Donohoe, Brian|
|Bray, Dr Jeremy||Dowd, Jim|
|Brown, Gordon (Dunfermline E)||Dunnachie, Jimmy|
|Brown, N. (N'c'tle upon Tyne E)||Dunwoody, Mrs Gwyneth|
|Bruce, Malcolm (Gordon)||Eagle, Ms Angela|
|Burden, Richard||Eastham, Ken|
|Byers, Stephen||Enright, Derek|
|Caborn, Richard||Etherington, William|
|Callaghan, Jim||Evans, John (St Helens N)|
|Campbell, Ms Anne (C'bridge)||Ewing, Mrs Margaret|
|Campbell, Menzies (Fife NE)||Fatchett, Derek|
|Campbell, Ronald (Blyth V)||Faulds, Andrew|
|Campbell-Savours, D. N.||Field, Frank (Birkenhead)|
|Cann, James||Fisher, Mark|
|Carlife, Alexander (Montgomry)||Flynn, Paul|
|Chisholm, Malcolm||Foster, Derek (B'p Auckland)|
|Clapham, Michael||Foster, Donald (Bath)|
|Foulkes, George||Mallon, Seamus|
|Fraser, John||Mandelson, Peter|
|Fyfe, Maria||Marek, Dr John|
|Galbraith, Sam||Marshall, David (Shettleston)|
|Galloway, George||Marshall, Jim (Leicester, S)|
|Gapes, Mike||Martin, Michael J. (Springburn)|
|Garrett, John||Martlew, Eric|
|George, Bruce||Maxton, John|
|Gerrard, Neil||Meacher, Michael|
|Gilbert, Rt Hon Dr John||Meale, Alan|
|Godman, Dr Norman A.||Michael, Alun|
|Godsiff, Roger||Michie, Bill (Sheffield Heeley)|
|Golding, Mrs Llin||Michie, Mrs Ray (Argyll Bute)|
|Gordon, Mildred||Milburn, Alan|
|Gould, Bryan||Miller, Andrew|
|Graham, Thomas||Mitchell, Austin (Gt Grimsby)|
|Grant, Bernie (Tottenham)||Molyneaux, Rt Hon James|
|Griffiths, Nigel (Edinburgh S)||Moonie, Dr Lewis|
|Griffiths, Win (Bridgend)||Morgan, Rhodri|
|Grocott, Bruce||Morley, Elliot|
|Gunnell, John||Morris, Rt Hon A. (Wy'nshawe)|
|Hain, Peter||Morris, Estelle (B'ham Yardley)|
|Hall, Mike||Morris, Rt Hon J. (Aberavon)|
|Hanson, David||Mudie, George|
|Hardy, Peter||Mullin, Chris|
|Harman, Ms Harriet||Murphy, Paul|
|Harvey, Nick||Oakes, Rt Hon Gordon|
|Henderson, Doug||O'Brien, Michael (N W'kshire)|
|Heppell, John||O'Brien, William (Normanton)|
|Hill, Keith (Streatham)||O'Hara, Edward|
|Hinchliffe, David||Olner, William|
|Hoey, Kate||O'Neill, Martin|
|Hogg, Norman (Cumbernauld)||Orme, Rt Hon Stanley|
|Home Robertson, John||Paisley, Rev Ian|
|Hood, Jimmy||Patchett, Terry|
|Hoon, Geoff||Pendry, Tom|
|Howarth, George (Knowsley N)||Pickthall, Colin|
|Howells, Dr. Kim (Pontypridd)||Pike, Peter L.|
|Hoyle, Doug||Pope, Greg|
|Hughes, Kevin (Doncaster N)||Powell, Ray (Ogmore)|
|Hughes, Robert (Aberdeen N)||Prentice, Bridget (Lew'm E)|
|Hughes, Roy (Newport E)||Prentice, Gordon (Pendle)|
|Hughes, Simon (Southwark)||Prescott, John|
|Hutton, John||Primarolo, Dawn|
|Jackson, Ms Glenda (H'stead)||Purchase, Ken|
|Jackson, Ms Helen (Shef'ld, H)||Quin, Ms Joyce|
|Jamieson, David||Radice, Giles|
|Janner, Greville||Raynsford, Nick|
|Johnston, Sir Russell||Redmond, Martin|
|Jones, Barry (Alyn and D'side)||Robertson, George (Hamilton)|
|Jones, Ieuan (Ynys Môn)||Robinson, Geoffrey (Co'try NW)|
|Jones, Jon Owen (Cardiff C)||Robinson, Peter (Belfast E)|
|Jones, Ms Lynne (B'ham S O)||Roche, Mrs Barbara|
|Jones, Martyn (Clwyd, SW)||Rogers, Allan|
|Jowell, Ms Tessa||Rooker, Jeff|
|Kaufman, Rt Hon Gerald||Rooney, Terry|
|Keen, Alan||Ross, Ernie (Dundee W)|
|Kennedy, Charles (Ross, C & S)||Ross, William (E Londonderry)|
|Kennedy, Ms Jane (L'p'l Br'g'n)||Rowlands, Ted|
|Khabra, Piara||Ruddock, Joan|
|Kilfoyle. Peter||Salmond, Alex|
|Leighton, Ron||Sedgemore, Brian|
|Lestor, Joan (Eccles)||Sheerman, Barry|
|Litherland, Robert||Sheldon, Rt Hon Robert|
|Livingstone, Ken||Shore, Rt Hon Peter|
|Lloyd, Tony (Stretford)||Short, Clare|
|Llwyd, Elfyn||Simpson, Alan|
|Loyden, Eddie||Skinner, Dennis|
|Lynne, Ms Liz||Smith, Andrew (Oxford E)|
|McAllion. John||Smith, C. (Isl'ton S & F'sbury)|
|McAvoy. Thomas||Smith, Rt Hon John (M'kl'ds E)|
|MacDonald, Calum||Smith, Llew (Blaenau Gwent)|
|McGrady, Eddie||Smyth, Rev Martin (Belfast S)|
|McKelvey, William||Snape, Peter|
|Mackinlay, Andrew||Soley, Clive|
|McLeish, Henry||Spearing, Nigel|
|McMaster, Gordon||Spellar, John|
|Madden, Max||Squire, Rachel (Dunfermline W)|
|Maginnis, Ken||Steel, Rt Hon Sir David|
|Mahon, Alice||Steinberg, Gerry|
|Stevenson, George||Watson, Mike|
|Strang, Dr. Gavin||Welsh, Andrew|
|Straw, Jack||Wicks, Malcolm|
|Taylor, Mrs Ann (Dewsbury)||Williams. Rt Hon Alan (Sw'n W)|
|Taylor, Rt Hon John D.(Str'gf'd)||Williams, Alan W (Carmarthen)|
|Taylor, Matthew (Truro)||Wilson, Brian|
|Tipping, Paddy||Wise, Audrey|
|Trimble, David||Worthington, Tony|
|Turner, Dennis||Wray, Jimmy|
|Tyler, Paul||Wright, Dr. Tony|
|Vaz, Keith||Young, David (Bolton SE)|
|Walley, Joan||Tellers for the Ayes:|
|Wardell, Gareth (Gower)||Mr. Jack Thompson and|
|Wareing, Robert N||Mr. Eric Illsley.|
|Adley, Robert||Coombs, Simon (Swindon)|
|Ainsworth, Peter (East Surrey)||Cope, Rt Hon Sir John|
|Aitken, Jonathan||Cormack, Patrick|
|Alexander, Richard||Cran, James|
|Alison, Rt Hon Michael (Selby)||Currie, Mrs Edwina (S D'by'ire)|
|Allason, Rupert (Torbay)||Curry, David (Skipton & Ripon)|
|Amess, David||Davies, Quentin (Stamford)|
|Ancram, Michael||Davis, David (Boothferry)|
|Arbuthnot, James||Day, Stephen|
|Arnold, Jacques (Gravesham)||Deva, Nirj Joseph|
|Arnold, Sir Thomas (Hazel Grv)||Devlin, Tim|
|Ashby, David||Dickens, Geoffrey|
|Aspinwall, Jack||Dicks, Terry|
|Atkins, Robert||Dorrell, Stephen|
|Atkinson, David (Bour'mouth E)||Douglas-Hamilton, Lord James|
|Atkinson, Peter (Hexham)||Dover, Den|
|Baker, Rt Hon K. (Mole Valley)||Duncan, Alan|
|Baker, Nicholas (Dorset North)||Duncan-Smith, Iain|
|Baldry, Tony||Dunn, Bob|
|Banks, Matthew (Southport)||Durant, Sir Anthony|
|Banks, Robert (Harrogate)||Eggar, Tim|
|Bates, Michael||Elletson, Harold|
|Batiste, Spencer||Emery, Sir Peter|
|Bendall, Vivian||Evans, David (Welwyn Hatfield)|
|Beresford, Sir Paul||Evans, Jonathan (Brecon)|
|Biffen, Rt Hon John||Evans, Nigel (Ribble Valley)|
|Blackburn, Dr John G.||Evans, Roger (Monmouth)|
|Bonsor, Sir Nicholas||Evennett, David|
|Booth, Hartley||Faber, David|
|Boswell, Tim||Fabricant, Michael|
|Bottomley, Peter (Eltham)||Fairbairn, Sir Nicholas|
|Bottomley, Rt Hon Virginia||Fenner, Dame Peggy|
|Bowden, Andrew||Field, Barry (Isle of Wight)|
|Bowis, John||Fishburn, John Dudley|
|Boyson, Rt Hon Sir Rhodes||Forman, Nigel|
|Brandreth, Gyles||Forsyth, Michael (Stirling)|
|Brazier, Julian||Forth, Eric|
|Bright, Graham||Fowler, Rt Hon Sir Norman|
|Brooke, Rt Hon Peter||Fox, Dr Liam (Woodspring)|
|Browning, Mrs. Angela||Fox, Sir Marcus (Shipley)|
|Bruce, Ian (S Dorset)||Freeman, Roger|
|Budgen, Nicholas||French, Douglas|
|Burns, Simon||Fry, Peter|
|Burt, Alistair||Gale, Roger|
|Butcher, John||Gallie, Phil|
|Butler, Peter||Gardiner, Sir George|
|Butterfill, John||Garel-Jones, Rt Hon Tristan|
|Carlisle, John (Luton North)||Garnier, Edward|
|Carlisle, Kenneth (Lincoln)||Gill, Christopher|
|Carrington, Matthew||Gillan, Ms Cheryl|
|Carttiss, Michael||Goodlad, Rt Hon Alastair|
|Cash, William||Goodson-Wickes, Dr Charles|
|Channon, Rt Hon Paul||Gorman, Mrs Teresa|
|Chaplin, Mrs Judith||Gorst, John|
|Churchill, Mr||Grant, Sir Anthony (Cambs SW)|
|Clappison, James||Greenway, Harry (Ealing N)|
|Clark, Dr Michael (Rochford)||Greenway, John (Ryedale)|
|Clarke, Rt Hon Kenneth (Ruclif)||Griffiths, Peter (Portsmouth, N)|
|Clifton-Brown, Geoffrey||Grylls, Sir Michael|
|Colvin, Michael||Gummer, Rt Hon John Selwyn|
|Congdon, David||Hague, William|
|Conway, Derek||Hamilton, Rt Hon Archie|
|Coombs, Anthony (Wyre For'st)||Hamilton, Neil (Tatton)|
|Hampson, Dr Keith||Moate, Roger|
|Hanley, Jeremy||Monro, Sir Hector|
|Hannam, Sir John||Montgomery, Sir Fergus|
|Hargreaves, Andrew||Moss, Malcolm|
|Harris, David||Needham, Richard|
|Haselhurst, Alan||Nelson, Anthony|
|Hawkins, Nicholas||Neubert, Sir Michael|
|Hawksley, Warren||Newton, Rt Hon Tony|
|Hayes, Jerry||Nicholls, Patrick|
|Heald, Oliver||Nicholson, David (Taunton)|
|Heathcoat-Amory, David||Nicholson, Emma (Devon West)|
|Hendry, Charles||Norris, Steve|
|Hicks, Robert||Onslow, Rt Hon Cranley|
|Higgins, Rt Hon Terence L.||Oppenheim, Phillip|
|Hill, James (Southampton Test)||Ottaway, Richard|
|Hogg, Rt Hon Douglas (G'tham)||Page, Richard|
|Horam, John||Paice, James|
|Hordern, Sir Peter||Patten, Rt Hon John|
|Howard, Rt Hon Michael||Pattie, Rt Hon Sir Geoffrey|
|Howarth, Alan (Strat'rd-on-A)||Pawsey, James|
|Howell, Rt Hon David (G'dford)||Peacock, Mrs Elizabeth|
|Howell, Ralph (North Norfolk)||Pickles, Eric|
|Hughes Robert G. (Harrow W)||Porter, David (Waveney)|
|Hunt, Rt Hon David (Wirral W)||Portillo, Rt Hon Michael|
|Hunt, Sir John (Ravensbourne)||Powell, William (Corby)|
|Hunter, Andrew||Rathbone, Tim|
|Jack, Michael||Redwood, John|
|Jackson, Robert (Wantage)||Renton, Rt Hon Tim|
|Jenkin, Bernard||Richards, Rod|
|Jessel, Toby||Riddick, Graham|
|Johnson Smith, Sir Geoffrey||Rifkind, Rt Hon. Malcolm|
|Jones, Gwilym (Cardiff N)||Robathan, Andrew|
|Jones, Robert B. (W H'f'rdshire)||Roberts, Rt Hon Sir Wyn|
|Jopling, Rt Hon Michael||Robertson, Raymond (Ab'd'n S)|
|Kellett-Bowman, Dame Elaine||Robinson, Mark (Somerton)|
|Key, Robert||Roe, Mrs Marion (Broxbourne)|
|Kilfedder, Sir James||Rowe, Andrew (Mid Kent)|
|Kirkhope, Timothy||Rumbold, Rt Hon Dame Angela|
|Knapman, Roger||Ryder, Rt Hon Richard|
|Knight, Mrs Angela (Erewash)||Sackville, Tom|
|Knight, Greg (Derby N)||Sainsbury, Rt Hon Tim|
|Knight, Dame Jill (Bir'm E'st'n)||Scott, Rt Hon Nicholas|
|Knox, David||Shaw, David (Dover)|
|Kynoch, George (Kincardine)||Shephard, Rt Hon Gillian|
|Lait, Mrs Jacqui||Shepherd, Colin (Hereford)|
|Lang, Rt Hon Ian||Shepherd, Richard (Aldridge)|
|Lawrence, Sir Ivan||Sims, Roger|
|Legg, Barry||Skeet, Sir Trevor|
|Leigh, Edward||Smith, Sir Dudley (Warwick)|
|Lennox-Boyd, Mark||Smith, Tim (Beaconsfield)|
|Lester, Jim (Broxtowe)||Soames, Nicholas|
|Lidington, David||Speed, Sir Keith|
|Lightbown, David||Spencer, Sir Derek|
|Lilley, Rt Hon Peter||Spicer, Sir James (W Dorset)|
|Lloyd, Peter (Fareham)||Spicer, Michael (S Worcs)|
|Lord, Michael||Spink, Dr Robert|
|Luff, Peter||Spring, Richard|
|Lyell, Rt Hon Sir Nicholas||Sproat, Iain|
|MacGregor, Rt Hon John||Squire, Robin (Hornchurch)|
|MacKay, Andrew||Stanley, Rt Hon Sir John|
|Maclean, David||Steen, Anthony|
|McLoughlin, Patrick||Stephen, Michael|
|McNair-Wilson, Sir Patrick||Stern, Michael|
|Madel, David||Stewart, Allan|
|Maitland, Lady Olga||Streeter, Gary|
|Malone, Gerald||Sumberg, David|
|Mans, Keith||Sweeney, Walter|
|Marland, Paul||Tapsell, Sir Peter|
|Marlow, Tony||Taylor, Ian (Esher)|
|Marshall, John (Hendon S)||Taylor, John M. (Solihull)|
|Marshall, Sir Michael (Arundel)||Taylor, Sir Teddy (Southend, E)|
|Martin, David (Portsmouth S)||Thomason, Roy|
|Mates, Michael||Thompson, Patrick (Norwich N)|
|Mawhinney, Dr Brian||Thornton, Sir Malcolm|
|Mayhew, Rt Hon Sir Patrick||Thurnham, Peter|
|Mellor, Rt Hon David||Townend, John (Bridlington)|
|Merchant, Piers||Townsend, Cyril D. (Bexl'yh'th)|
|Milligan, Stephen||Tracey, Richard|
|Mills, Iain||Tredinnick, David|
|Mitchell, Andrew (Gedling)||Trend, Michael|
|Trotter, Neville||Whittingdale, John|
|Twinn, Dr Ian||Widdecombe, Ann|
|Vaughan, Sir Gerard||Wiggin, Jerry|
|Viggers, Peter||Willetts, David|
|Waldegrave, Rt Hon William||Winterton, Mrs Ann (Congleton)|
|Walden, George||Winterton, Nicholas (Macc'f'ld)|
|Walker, Bill (N Tayside)||Wolfson, Mark|
|Waller, Gary||Wood, Timothy|
|Ward, John||Yeo, Tim|
|Wardle, Charles (Bexhill)||Young, Sir George (Acton)|
|Watts, John||Tellers for the Noes:|
|Wells, Bowen||Mr. Sydney Chapman and|
|Wheeler, Sir John||Mr. Irvine Patnick.|