§ (1) As from the first day of August, nineteen hundred and fifty-four, the stamp duties chargeable on the conveyance or transfer on sale of any lands, tenements, hereditaments or heritages or of any estate or interest in any lands, tenements, hereditaments or heritages shall, where the amount of value of the consideration for the sale does not exceed three thousand pounds, be such part of the duties which would have been chargeable immediately before that day as is mentioned in the next following subsection.
§ (2) The parts referred to in the last foregoing subsection are—
- (a) where the amount or value of the consideration for the sale does not exceed two thousand five hundred pounds, one-half; and
- (b) where such amount or value as aforesaid exceeds two thousand five hundred pounds as to the first two thousand five hundred pounds thereof, one-half, and as to the excess over two thousand five hundred pounds, three-quarters.
§ Brought up, and read the First time.
§ Mr. Houghton
I beg to move, "That the Clause be read a Second time."
I do not know whether it is too much to hope that the Chancellor is in the same agreeable mood as he was during our discussion of the last new Clause. This Clause proposes a small concession in Stamp Duty on the transfer of small properties not part of a larger transaction, and it is linked directly to the Government's recent proposals for facilitating house purchase by mortgage arrangements set out in the circular of the Ministry of Housing and Local Government to local housing authorities on 4th May this year.
In that scheme for assisted house purchase there is a limit on the guaranteed 2247 mortgage from building societies on the purchase price or value of the property. That limit is £2,500, and this new Clause proposes that Stamp Duty on houses valued up to £2,500 shall be halved, and that on the purchase price of houses between £2,500 and £3,000 the duty charged shall be three-quarters of the existing rate.
The latter part of the proposal is merely to provide a sort of taper, but the essentials of the new Clause are to reduce the Stamp Duty on houses which people will be buying largely under the scheme of assisted house purchase set out in the circular of 4th May, 1954.
I should like to draw attention to the burdens which accompany house purchase, even though the property may be small and the price relatively low. Take, for example, the purchase of a house -valued at £1,800. That, today, does not buy a mansion or anything luxurious. We are talking now of artisans' dwellings with a purchase price of about £1,800. Suppose that in this case the purchaser goes to the local authority and, through them, with the help of the building society, gets a loan of £1,620. Then the costs which the purchaser will have to bear in the case of an unregistered title will amount to £67 15s., made up As follows.
The purchase costs will be £34 10s. the Stamp Duty on the conveyance will be £18, and it is that amount that this new Clause proposes to cut in half; the mortgage costs will be £11; the Stamp Duty on the mortgage will be £4 5s., making a total of £67 15s. That is a considerable sum for a purchaser to find on top of the lump sum deposit which he must put down in order to get the assistance of the building society and complete the purchase.
If the purchase price of the house is £2,500 and the loan is £2,250, then the total cost on an unregistered title would amount to £89 15s. [Interruption.] I hope my right hon. Friends will allow me to make my speech.
§ Mr. Houghton
I have my own opinion of what my right hon. Friends were talking about. They were talking about the concession given by the Chancellor on the 2248 last new Clause and the one that I am not going to get on this new Clause.
I was saying that where the purchase price is the maximum amount permitted under the scheme to which I have referred, and the loan is £2,250, then the total cost in the case of an unregistered title would be £89 15s., and of that £25 would be the Stamp Duty. This new Clause proposes to cut in half the amount of Stamp Duty on the conveyance in the case of a house purchased separately and not part of a larger transaction, up to £2,500 in value. That is a very modest concession to ask for in order to bring nearer and more rapidly the property-owning democracy which is one of the aims and objects of hon. Members opposite. This is one of the occasions when those of us on these benches can assist in the realisation of the aim of hon. Members opposite.
I want to make it clear that the concession does not apply to the transfer of stocks and shares. It is limited to property. I have no idea how much this concession would cost, but I hope that on this new Clause, as on the last, the amount of revenue lost would not damage the financial poise of the right hon. Gentleman's Budget this year. It would help to reduce the additional costs which some people find stand between them and buying a house. It is not within the power of this House, in this connection at least, to reduce the legal costs of purchase, and, therefore, the proposal that I am making is confined to halving the Stamp Duty.
I trust that the Financial Secretary has been left by his right hon. Friend the Chancellor of the Exchequer with his concession on this Finance Bill. Probably there should be fair shares in making concessions between Chancellors and their Financial Secretaries, and I hope that the Chancellor, when leaving the Chamber. left behind authority to the Financial Secretary to continue the agreeable mood which we found so pleasant a little while ago, and that his approach to this new Clause will be equally favourable.
§ Mr. Frederick Willey (Sunderland, North)
I beg to second the Motion.
The advantage in following my hon. Friend the Member for Sowerby (Mr. Houghton) is that he always expresses himself so lucidly and cogently that there 2249 is no need to say much in support. I think we can anticipate that we shall get this concession from the Government, because, at this stage of the Bill, they are in a concessionary mood. I do not think this concession will cost very much, and I certainly think that for good public and political reasons the Government ought to make this concession.
I share the view held by many hon. Members opposite that we ought to encourage people to buy and own their houses. I have never made any bones about supporting the idea of a property-owning democracy. I think it is a good thing. That is why I was very critical of the Government's financial policy which caused the increase in the mortgage rates. It has deterred people from buying houses, and for that reason it is a very had thing.
One of the very unfortunate incidents in house purchase is the surprise which faces the house purchaser when he discovers the costs he has to bear immediately upon the purchase of his house. Speaking recently at Rugby, I upset some local members of the Law Society by talking about these costs. Everyone hopes that it will be possible to reduce conveyancing costs, but the question has been examined and re-examined on many occasions without very much saving having been made. This proposal, however, allows for a very easy saving if the Chancellor will bear the burden.
I realise that the Financial Secretary may point out that the Labour Party increased Stamp Duty in 1947. That is so, but that was a bi-partisan policy. I remember my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) saying that he was following the precedent of Mr. Austen Chamberlain, as he then was, in 1920, when he did the same thing. In 1947, I believe the general view of the House was that we should not place too heavy a burden upon the purchasers of what we call small properties. In fact, my right hon. Friend exempted what he believed to be the smaller properties from the increased Stamp Duty.
I should have thought that, in the atmosphere which now pervades the House, this might well be one of the first concessions to be made to the purchaser. I can call in aid the Beaverbrook Press, 2250 as it is quite clear that that organisation has a very powerful influence upon the Government. On 29th June, the "Daily Express" advanced the general argument that everyone should be his own landlord. It pointed out that £18 had to be paid by way of Stamp Duty upon a property worth £1,800. That is a heavy burden on a person who is facing all sorts of expenditure, and the "Daily Express" was appealing to its friend the Minister of Housing and Local Government, and asking, rhetorically, whom he should see about it. On the matter of Stamp Duty, it suggested that he should see the Chancellor, and it said:Mr. Macmillan should ask him to ease this absurd tax and look elsewhere for revenue.Has the Minister seen his right hon. Friend and powerfully expressed this, point of view? If he has, I am quite sure that the Financial Secretary will take this opportunity to make this concession. If he does not, it will give the lie to a good deal of Tory propaganda. As the "Daily Express" went on to say:If the Tories believe in encouraging people to buy their own houses, it is fantastic to deter them with taxes.That is the simple issue. This concession would not cost very much, and it would be a great encouragement to people who are buying their own houses. It is the policy of the Government to encourage house purchase. They are making a great deal of it; it is a cardinal point in their policy. Even from the narrow point of view of political expediency I should have thought that the Financial Secretary and the Chancellor would not be so stupid as to oppose the Beaverbrook Press in this matter.
Therefore, I am most hopeful that the. Financial Secretary, making small easements as he has been doing in the Bill, will give way and provide this small solace to people who are facing these very real difficulties in setting up their own homes.
§ Mr. Cyril W. Black (Wimbledon)
I am quite certain that hon. Members on this side of the House will be sympathetic towards the object of this Motion. We believe in making home ownership as easy as possible and bringing it within the reach of as many people as we can. Anything that can properly be done to reduce the cost of house purchase will be generally welcomed. At the same time 2251 I cannot fail to notice the extraordinary conversion which has taken place in the attitude of the hon. Member for Sowerby (Mr. Houghton) and the hon. Member for Sunderland, North (Mr. Willey) upon this matter.
I must refer quite briefly to its history during the last few years. Reference has already been made to the fact that in 1947 the then Government increased—I believe they doubled—the Stamp Duty which was then in existence. In doing so they made house purchase much more expensive. On 28th June, 1951, on the Report stage of the Finance Bill, I tabled an Amendment in terms very similar to those of the proposed new Clause. I moved that Amendment in a speech which very closely resembled the one which has just been made by the hon. Member for Sowerby, although I cannot claim that it achieved the persuasiveness that we all expect from him on any occasion when he addresses the House.
At that time I was endeavouring to secure for small house purchasers a reduction in a Stamp Duty which was then about double the present rate. It is interesting to notice that on that occasion all six hon. Members whose names appear on the Order Paper in support of this proposed new Clause went into the Division Lobby against it and brought about the defeat of the purpose I had in view. If I had had their support on that occasion the object which they have in mind might have been achieved about three years earlier. I must point out the remarkable conversion which has taken place in the attitude of those hon. Members, although it is none the less welcome.
§ Mr. Black
Since I moved my Amendment in June, 1951, the present Government, with the very enlightened policy Which they have brought to bear in this matter, have given effect to the object I then sought to achieve and which was refused by the Government which was then in power. I am quite sure that it is entirely proper that hon. Members should bring this matter continually to the attention of successive Governments, and that we should all endeavour to secure reductions in the expenses connected with house purchase, but it is not inappropriate 2252 that Members should have their memories jogged and be reminded of the history of the matter.
§ Mr. Houghton
Does not the hon. Member appreciate the vast difference between the conditions which obtained in 1947 and those of today? The Stamp Duty was doubled in 1947 to impose a tax on a good deal of property speculation and the transfer of houses at profiteering prices.
§ Mr. Black
I am prepared to agree that since 1951 there has been a tremendous improvement in the fortunes of the country. I agree, furthermore, that that is reffected in the action of the present Government in approximately halving the Stamp Duty as it stood in June, 1951, when I was endeavouring to secure a reduction. Whether it is reasonable to go further is, of course, a matter that the Chancellor must consider.
The point of my intervention is to draw the attention of the House to some of these matters which I feel some hon. Members might be in danger of forgetting and also to raise the question of whether, if the Chancellor is in a position to make any further concession, having regard to the concession he has already made in this particular field, this is the most worthy place in which, at the present time, a further measure of relief should be given.
§ Mr. Barnett Janner (Leicester, North-West)
The hon. Member for Wimbledon (Mr. Black), having had his little say, is evidently prepared to come into the Lobby with us in the event of the Government resisting the new Clause because he has explained quite clearly that he expected those of us who have our names to it to have gone into the Lobby against our own Government in 1951.
§ Mr. Black
I should like to make clear to the hon. Member—perhaps it was not clear in my speech—that what I was seeking to achieve in June, 1951, was subsequently given by the present Government soon after they came into power. The objective I sought, in June, 1951, has now been achieved, and what the hon. Gentleman is now trying to achieve is something different.
§ Mr. Janner
That being the case, I now understand that the hon. Member does not want the Stamp Duty on this 2253 kind of purchase reduced and is not prepared to support any suggestion to that effect. I will now tell him why he should. The circumstances in 1947 warranted the increase in the Stamp Duty. The difference today is this. I do not want to be aggressive, because we want a concession to be made and we want to give reasons to the Financial Secretary why he should accept what is a reasonable proposal. The Government are claiming that they are prepared to assist people of modest means to purchase houses for their own occupation. With that end in view there has been a great story made of the fact that the Government are encouraging building societies to advance up to 90 per cent. of the purchase money in cases where the price of the house is £2,500 or below.
What is very much more important to realise is that a house which is sold for £2,500 today is not the kind of house that could have been purchased some years ago for a similar amount. The purchaser has to put aside out of his earnings what the Government consider to be the maximum that can be expected of him, namely, £250. The costs involved in a purchase of that kind are out of all proportion to that £250 which he has to find, and that is what we are talking about at the present time.
We are asking the Financial Secretary to realise that the concession that was made in respect of the amount that could be obtained by way of loan is, to a very considerable extent, watered down by virtue of the fact that people who come within the category of those able to make a purchase of that kind of house have to pay a considerable sum in addition to the 10 per cent.
§ 8.15 p.m.
§ Mr. Janner
I have to be careful in this matter because I want a favourable reply to our request, but I would say that the hon. Member for Wimbledon, like all Members of his party, is always living in the past. Let us talk about the present and the future, especially the bright future that we can provide. We hope hon. Members opposite will assist us to provide it.
2254 The position is that this imposes a very considerable burden upon the person who wants to buy his own home. What we are asking for is, in fact, a small concession by the Government. The Government say that they are in sympathy with our new Clause. Let us have a little practical sympathy so that the person who wants to buy a house of this size is in a position to do so without having placed upon him a burden which is greater than he can sustain.
This is a small concession. Not very much is being asked. It is true that in the aggregate it may seem a formidable amount, but actually it is not. It is a very important factor to the individual who is buying a house, and I think that the Financial Secretary, who, at times, is fairly reasonable, and who has been shown an example in the acceptance of the last Amendment by his right hon. Friend, should accept this very reasonable suggestion. I know the difficulty with which people are faced when they go to buy houses of this kind. One frequently comes across cases of men and women who want their own homes, and yet who find that a matter of £10 or £15 in the way of costs is something which is going to make a considerable difference.
I want to say one other word about the concession. It is for an amount of £2,500 or below, but it is sometimes found that people cannot get the house they want at the price of £2,500 and have to pay £3,000. The Financial Secretary knows that today the £3,000 house is not a very elaborate affair. The person who purchases a house at £2,500 has to find only 10 per cent. of the purchase money, but when he goes beyond that range he is in considerable difficulties if he seeks a mortgage of 90 per cent. The hon. Member for Wimbledon knows that such a purchaser will flit from one building society to another and will search high and low in an effort to obtain a satisfactory mortgage.
In the case of a purchaser of a house of that kind the concession is not very large, and the mortgage is something that should 'be taken into consideration by the Financial Secretary. This is a matter that cuts across a very large section of the community. They have often to scrape and save to find the necessary money to enable them to purchase such a house, 2255 and very often it is just a question of £10, £15 or £20 standing between the possibility of that purchase and being unable to bring it about. In those circumstances, I ask the right hon. Gentleman to regard this new Clause as one which he can accept.
§ Mr. Boyd-Carpenter
Like my hon. Friend the Member for Wimbledon (Mr. Black), I have great sympathy with the declared objects of the Clause, namely, the assistance of house purchase. I have held that view for a good many years and it is a view to which the Government have given concrete expression by way of the reduction in Stamp Duty on house purchase, which was effected in the Finance Act, 1952.
As my hon. Friend the Member for Wimbledon pointed out with great accuracy, in the Finance Act of 1952 and my right hon. Friend's first Budget a substantial reduction was made. It was provided that the lower 1 per cent. rate should run up to £3,000 with a modified provision of 1½ per cent. up to £3,450. We have not only paid lip service to this point of view, but have gone a considerable way to meeting it by practical financial measures.
The proposed new Clause would carry the matter considerably further and, like all proposed tax concessions, it has to be looked at partly from the point of view of the good that it would do and partly from the point of view of whether in the circumstances of any particular year it is possible to accept the loss of revenue involved.
Before passing to that subject, I should like to draw the attention of the House to the rather unfortunate way in which, in one respect, the new Clause would operate. The hon. Member for Leicester, North-West (Mr. Janner) referred to the £3,000 house, which, he rightly said, is not necessarily, in these days, a mansion of unbridled luxury. This proposal, however, would operate with a very severe jump just at that £3,000 level. If the Clause were adopted the house of just under £3,000 in value would carry a Stamp Duty of about £16 5s., whereas one of just over £3,000 value would jump to as much as £46 10s. Stamp Duty, that is at the £1 10s. per cent. rate.
§ Mr. Janner
If the right hon. Gentleman thinks that he ought to go further we have no objection at all.
§ Mr. Boyd-Carpenter
I am only dealing with the precise proposal that has been put forward. One of the minor objections to it is that it provides this very acute jump at just the level which the hon. Member for Leicester, North-West went out of his way to point out was not a particularly high level. The hon. Member is good enough to say that he is prepared to go further but, if he does, that automatically raises the cost. Indeed, it is perhaps an indication of the difficulty of the proposal that to make it operate fairly and equitably it would be necessary to add to the already substantial cost of the Clause.
The hon. Member for Sowerby (Mr. Houghton) asked what the cost would be. According to the best estimate that I can obtain, it would be £2 million in the present year and £3 million in a full year. In the light of the figures for the current year, a cost of that sort makes it quite impossible for my right hon. Friend to accept this proposal. For reasons with which the House will be only too familiar, a concession of that amount of revenue is not possible in the circumstances of this year.
Having said that, it does not mean, of course, that we do not agree that were the resources available this is certainly one of the matters which would call for consideration. The Government attach very great importance to house purchase. It would be a mistake to assume, however, that Stamp Duty is the only, or even a particularly substantial, deterrent. It is the experience of most of us who have discussed this matter, as I have, with our constituents, that the real deterrent in the great majority of cases is the size of the original deposit.
As the House knows, my right hon. Friend the Minister of Housing and Local Government is seeking to tackle that difficulty by enabling advances to be made up to a far higher proportion of the total cost than has been possible in the past, by way of arrangements which he has succeeded in making under which both the central Government and local authorities undertake to cover the risk of building societies in making increased advances. That factor is a much bigger 2257 factor than Stamp Duty, but that does not mean that Stamp Duty is not material.
It is necessary to put the matter in proportion, however, and to appreciate that, not only by way of Stamp Duty in 1952, but also by way of the new arrangements which were announced a few weeks ago, we have shown that we are seriously concerned about house purchase. Because on the ground of cost it is necessary to reject this proposal this year, it does not mean that we shall not continue the great success that my right hon. Friend has had in stimulating people to house themselves or that that beneficent process cannot continue to a still greater degree than at present.
§ Mr. F. H. Hayman (Falmouth and Camborne)
The Financial Secretary has just said that this proposal would cost £2 million. Earlier, he said that the cost was small to the individual. It follows, therefore, that it affects a very large number of people and I should have thought that his party, which uses the slogan, "A property-owning democracy," would have acceded to our request. But in his list of costs which the house purchaser has to face, the right hon. Gentleman forgot legal costs. I am surprised that he should have done that, because to the layman legal costs are rather frightening.
The memory of the hon. Member for Wimbledon (Mr. Black) must be very good, otherwise he would not be able to be a director of as many companies as he directs. One must assume, therefore, that he knew that in 1951 my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) had to face the first instalment of the re-armament budget which, over three years, was costing £4,500 million. That was a terrific item and, therefore, my right hon. Friend was perfectly justified in voting, and we were perfectly justified in voting with him, against Amendments which would reduce the revenue which he had to obtain.
§ 8.30 p.m.
§ Mr. Gaitskell
I am disappointed in the Financial Secretary. I had thought that perhaps the concession the Government made on the last new Clause portended a new trend. Perhaps there was now a new look in the Treasury; they would see whether they could please the taxpayers and please the House, but no, we are back again with the same old 2258 replies, "Cannot be done this year—costs too much—administrative inconvenience"—difficulties of one kind or another. It is surprising because we would have thought that, above all the new Clauses, this would have been the one most popular with the right hon. Gentleman and his right hon. and hon. Friends. After all, here was an opportunity to stimulate people into buying their own houses.
The right hon. Gentleman referred to the cost of £2 million, but he forgot that in stimulating people to buy their own houses he will save money on housing subsidies, a very important point which I am sure he has in mind in general housing policy. It would be quite consistent with that policy to give a little money away here in order to save a lot more money on the subsidy bill. So I do not think we need take too seriously what the right hon. Gentleman said about costs.
I am not quite sure where the hon. Member for Wimbledon (Mr. Black) stands. He made a speech which seemed more appropriate to the platform than to this House and made points which I am sure he has made many times before in public and which, I think, have been very adequately dealt with by my hon. Friends. Of course, in 1951 we had to face a terrific increase in defence expenditure. I think it is- in the recollection of the House that that defence expenditure was supported by the party opposite. That year it was quite impossible to make concessions. I was unfortunate, as Chancellor of the Exchequer in the one year in which I had to present a Budget, in having to face an extra £500 million for defence. Therefore, I do not think that we can accept the strictures of the hon. Member too seriously.
I am still not clear whether he is in favour of the new Clause. When he rose I thought he would give us his blessing. I believe he is connected with building societies and I am sure that building societies in general would not oppose a reduction in Stamp Duty.
§ Mr. Blackindicated assent.
§ Mr. Gaitskell
I am glad to see the hon. Member nodding his head. Whatever he does about dividing on this issue, at least we know where his heart is. I hope that the hon. Member will not spoil the excellent expression of his point of view which I am trying to give to the 2259 House. While he may feel strongly in favour of this Clause, and may even have meant to speak in support of it, the Financial Secretary has turned it down. It is very regrettable that the right hon. Gentleman has missed a great opportunity to win popularity for himself and for the
§ Government. To show our disapproval of this foolish and reckless rejection of the new Clause, I propose that we should divide upon it.
§ Question put.
§ The House divided: Ayes, 238; Noes, 255.