Stamp Duty (Temporary Provisions) (Extension)

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

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Photo of John Hutton John Hutton , Barrow and Furness 8:30 pm, 7th July 1992

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.

8.45 pm

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.