Stamp Duty (Temporary Provisions) (Extension)

Part of New Clause 3 – in the House of Commons at 8:30 pm on 7 July 1992.

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Photo of Mr John Wilkinson Mr John Wilkinson , Ruislip - Northwood 8:30, 7 July 1992

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.