Stamp Duty Land Tax (Reduction)

I inform the House that I have selected amendment (a) in the name of Tim Farron.

I beg to move,

That—

(1) Part 4 of the Finance Act 2003 is amended as follows.

(2) In section 55(1B) (amount of stamp duty land tax chargeable: general), for Table A substitute—

(3) In Schedule 4ZA (higher rates of stamp duty land tax for additional dwellings etc), for the Table A in section 55(1B) mentioned in paragraph 1(2) substitute—

(4) In Schedule 5 (amount of SDLT chargeable in respect of rent), in paragraph 2(3), for Table A substitute—

(5) In Schedule 6ZA (relief for first-time buyers)—

(a) in paragraph 1(3), for “£500,000” substitute “£625,000”, and

(b) for the Table A in section 55(1B) mentioned in paragraph 4 substitute—

“TABLE A: RESIDENTIAL

Part of relevant consideration

Percentage

So much as does not exceed £425,000

0%

Any remainder (so far as not exceeding £625,000)

5%”

I beg to move amendment (a), Leave out paragraph 3.

I appreciate the contribution from the Minister. The amendment, which is supported by right hon. and hon. Friends, concerns a particular element of the proposal which is of great concern not just to me but to many Members on both sides of the House and from different parts of the country. It is, I expect, the unintended consequence of the proposal on communities already suffering under the weight of excessive second home ownership and the explosion of Airbnbs eating up the long-term rented market. There is obviously a debate to be had, which we will have next, about the proposal itself, the stamp duty cut, for which there are arguments that I fully understand. What I am concerned about is that the cut will apply to all properties, including to people buying their second, third, 22nd or 23rd home. My concern is not because I am consumed by the politics of envy, but because I am consumed with concern for my community and many others like it.

Since the pandemic, we have seen the explosion of a problem that was already difficult to start with: the rising proportion of second homes in communities such as mine. The former Chancellor and soon to be new Prime Minister—I congratulate him—my constituency neighbour, the right hon. Member for Richmond (Yorks) (Rishi Sunak), made an error at the beginning of the pandemic when he created the temporary stamp duty holiday. The immediate result was that in the first few months of the pandemic 80% of all house sales in my constituency, and in communities like it, were in the second home market. I hope and assume that was not the intention of the former Chancellor and soon-to-be Prime Minister, but that was the consequence. Furthermore, we saw a 32% increase in the number of holiday lets during the pandemic, up from a huge number to start off with in the lakes and the dales. That is the collapse of the long-term private rented market into the Airbnb market.

The last time we debated a stamp duty cut in this House was summer 2020. During that debate, my hon. Friend the Member for Liverpool, Walton (Dan Carden) made it clear that we do not oppose the principle of additional support for homeowners and buyers, and action to stimulate the housing market. The same principle applies today. At the time, however, my hon. Friend rightly questioned why the Government’s plans include such significant support for second home owners, landlords and holiday home buyers. Why have the Government today designed a scheme that gives so much help to second home owners?

We estimate that the Bill means subsidising second home owners to the tune of £300 million a year. That is not only a very significant amount of public money, but an amount that will be paid out each and every year. How can the Government justify that spending?

What is more, any benefit that the stamp duty changes may have for first-time buyers, or for the housing market in general, will pale into insignificance when compared with the havoc that the Government’s kamikaze mini-Budget unleashed on our economy. The Conservatives’ recklessness has seen more than 40% of available mortgages withdrawn from the market. It has seen lenders begin to price in interest rates of over 6% for two-year, fixed-rate deals. It has led to families facing their mortgage repayments increasing by £500 a month.

Despite the inevitable U-turns on all but a few measures, the damage has been done. No matter how much the Conservatives shuffle the personalities in Downing Street, as the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), put it a week ago:

“People will be paying a Tory mortgage premium for years to come”.—[Official Report, 17 October 2022; Vol. 720, c. 398.]

I listened with interest to the shadow spokesperson, the hon. Member for Ealing North (James Murray), who seemed to be using up all his greatest hits of criticism ahead of Second Reading, so I am not sure what he will say when we come to that. We always look forward to hearing Labour Members talk to us about the economy—they did such a good job with it last time they were in power.

Let me turn, more constructively, to the amendment tabled by the hon. Member for Westmorland and Lonsdale (Tim Farron). His concerns come from a good place. I have had the privilege of listening to him, on the Front and Back Benches, talk about this issue and the impact on his constituents. I know that he comes from a good place and not, as he said, from the politics of envy.

As the Minister will know, there is a lot of concern on the Government Benches about the proposal’s impact on second homes and holiday lets, and there will be a lot of sympathy for the amendment from the hon. Member for Westmorland and Lonsdale (Tim Farron). Last week, the Chief Secretary to the Treasury gave me an assurance that the Treasury was looking at this issue. Will the Minister reaffirm that the Treasury understands that this is an issue and that we will look at how we can address it as the Bill progresses through the House?

My hon. Friend is absolutely right. He echoes some of the points made by the hon. Member for Westmorland and Lonsdale about the broad range of opportunities to address the issue, because there are such wide-ranging effects. The purpose of the amendment, however, is to create a separate schedule of rates in the stamp duty land tax system for those purchasing an additional property. That would mean that the purchase of additional property would not be included in the scope of the resolution or the ensuing Bill.

The Government already have higher rates for additional dwellings, which were introduced in 2016 and which apply a 3% surcharge to the standard residential rates of stamp duty. That surcharge will continue to apply. This means that, although the Government’s changes to stamp duty will ensure that around 43% of transactions will pay no stamp duty land tax, none of those will be purchases of second homes or investments in buy-to-let properties. The Government have taken meaningful action to support local communities on second homes. I assure my hon. Friend that we will continue to look at that.

I reiterate the concerns raised by my hon. Friend the Member for St Austell and Newquay (Steve Double). Would it be possible to meet the Treasury team as the Bill progresses to ensure that coastal communities such as mine in North Devon do not continue to be blighted by the march of second homes?

I am always happy to engage with colleagues across the House. As I was saying, the Government have taken meaningful action on a range of issues, most recently through the Levelling-up and Regeneration Bill, which will introduce a council tax second homes premium.

I am grateful to the Minister for the tone of his response, but I am disappointed that it looks as though he will not accept my amendment, not least because it lays the ground to take seriously the points made by the hon. Member for St Austell and Newquay (Steve Double) about proactively tackling excessive second-home ownership and holiday lets. We need to do something now at least to not make the situation worse, and I fear that, unamended, the Minister’s proposals will make things worse. We have been trying to amend the Levelling-up and Regeneration Bill in Committee so that there are measures that can control, through planning, the number of second homes and holiday lets in communities such as mine, but we have had no success so far. Will he meet me and others who are concerned to look at how we can table amendments and make proposals through the Treasury that would make a material difference to communities such as mine?

As I said to my hon. Friend the Member for North Devon (Selaine Saxby), I am very happy to engage with the hon. Member for Westmorland and Lonsdale about this issue, but I say again that there are multiple ways in which we can deal with these issues through different aspects of Government. I hope that he will take this up with other Departments as well, and I urge him to withdraw his amendment.

Question put, That the amendment be made.