§ (1) In any case where a conveyance on sale is executed in respect of:—
- (a) a piece of land together with a private dwelling-house erected thereon, or
- (b) a piece of land not exceeding one acre in area and such conveyance is expressed to be for the purpose of erecting a private dwelling-house on the said land, and the interest in the property so conveyed is not less than the fee simple absolute or a term of years absolute of not less than sixty years, the said conveyance shall not, by virtue of the provisions of the Stamp Act, 1891, be liable to stamp duty.
§ (2) If, within a period of two years, or such longer period as the Commissioners of Inland Revenue may allow, from the date on which the person to whom is conveyed any property referred to in the foregoing subsection becomes entitled to possession thereof, there is such a change of use of the dwelling-house as to constitute development within the meaning of the Town and Country Planning Act, 1947, or, as the case may be, no private dwelling-house has been erected on the land conveyed, the conveyance on sale shall there- 1248 upon become liable to stamp duty as if the foregoing subsection had not been enacted.—[Mr. J. Rodgers.]
§ Brought up, and read the First time.
§ Mr. John Rodgers (Sevenoaks)
I beg to move, That the Clause be read a Second time.
It will be seen that this Clause is aimed at assisting people to own their own houses by exempting from Stamp Duty conveyances relating to private dwelling houses.
For a long time it has been the declared policy of the Conservative Party to try and create a property-owning democracy. I am sure, therefore, that we shall have support for this Clause from most hon. Members on these benches, and I very much hope for support from hon. Gentlemen opposite. In recent months they have put out propaganda in which they state that they believe that the more people who own their own houses the better.
Mr. H. Wilson
While that statement of our view is correct, I hope the hon. Gentleman will join with us in the policies we advocate to reduce interest rates, and thus mortgage rates—a most important factor.
§ Mr. Rodgers
That is a different question.
Stamp Duty has been doubled twice since its introduction. It is four times greater than when it was introduced in 1910. It was last doubled in 1947 under a Socialist Government, although it is true to say that reliefs were provided for in the case of smaller properties. Today, Stamp Duty is 5s. per £50 where the consideration does not exceed £3,500; 10s. per £50 where the conveyance is to a body of persons established for charitable purposes only or where consideration does not exceed £4.250 with the appropriate certificate of value; 15s. per £50 where the consideration does not exceed £5.000: £1 per £50 where the consideration exceeds £5,000.
When a person embarks on the purchase of a house, we all recognise that such a person is confronted with a number of legal and other charges which are somewhat discouraging. If the suggestions contained in this Clause were adopted, at least one of the financial difficulties facing the would-be purchaser would be removed.
1249 I recognise that Stamp Duty is not confined to the sale of property as such. It is also chargeable on stocks and shares, and other things. Personally, I should like to see it reduced on shares also; but that is outside the scope of this Clause. I believe that there is a special case with regard to the purchase of new house property or land intended for that specific purpose.
I cannot do better than quote from the Report of the Scottish Housing Advisory Committee, Cmd. 6741, at paragraph 147. This Report was, it is true, published ten years ago, but it summarises the position adequately. It said:We are aware that any concession to owner-occupiers might have repercussions on the transfer of other forms of property or of other types of transaction for which stamp duty is exigible. We should point out, however, that the stamp duty will fall to be met by the owner-occupier at the same time as he is involved in the other initial expenses of house purchase—legal expenses, removal expenses and an initial deposit on the purchase price. It is unfortunate that he should have to meet an expense of this kind at a time when he is least able to bear it. Psychologically also, the tax is payable at an unfortunate time; whereas the prospective house purchaser can see some return for his other initial expenses, he can see no immediate return for his stamp duty in relation to the house he is purchasing.I hope that my right hon. Friend the Financial Secretary will agree that that states the case pretty fairly and puts forward most of the main arguments in support of the Clause.
It will be observed that in drafting the Clause we have limited it to conveyances of sale whereby the fee simple or a term of not less than sixty years is conveyed. We did this because the object is to encourage house ownership and we thought that some limitation on period was necessary to avoid extending the concession to transactions such as furnished lettings.
In order to prevent obvious evasions, we have provided in subsection (2) that the conveyance becomes liable to full Stamp Duty in the event of a private house not being erected on the land conveyed or being used for a purpose other than that of a private dwelling house within a period of two years from the date on which the purchaser would be entitled to possession under the conveyance. The period could be extended by permission of the Inland Revenue if for 1250 any particular purpose the house was not erected for reasons outside the control of the would-be purchaser. It did not seem to us to be necessary to introduce the complication of a right of appeal to the courts.
I do not know what the cost of this concession would be. Perhaps the Financial Secretary would be willing to tell us what that cost would be when he replies. But I hope we shall be spared the stock Treasury answer that this might be administratively difficult and therefore is not acceptable, because it seems to me that it is the problem of the Treasury to find ways of making this administratively easy if it is desirable in the national interest.
A similar Clause, although not quite so well drafted as this, was moved in Committee on the 1946 Finance Bill. At that time it had the support of most hon. Members of the party to which I belong, and it included among its supporters no less a person than my right hon. Friend the Economic Secretary to the Treasury and other members of the Government such as the Minister of Pensions and National Insurance, the President of the Board of Trade, the Secretary of State for Scotland and so on; I could mention twenty or so other Ministers who at that time supported such a Clause. One notable name is missing from that support That is my right hon. Friend the Chancellor of the Exchequer, but I believe that it was only missing because he was not a Member of the House at that time. Otherwise, I feel that his name would have been among those others. I hope that this will not deter him or my right hon. Friend the Financial Secretary from giving the most sympathetic consideration to this Clause.
We do not necessarily press for the acceptance of the Clause in its present wording. If the Financial Secretary would like to modify it in any way, we would be quite happy. The Clause is designed with the object of stimulating a stated aim of Conservative Party policy, namely, the creation of a property-owning democracy. In that spirit, I hope the Financial Secretary will give it his most sympathetic consideration.
§ Mr. Powell
My hon. Friend the Member for Sevenoaks (Mr. J. Rodgers) has explained that the object of the Clause 1251 is directed to home ownership, to facilitating and encouraging the purchase of houses for occupation by the purchaser. Of course, it is not so restricted in its terms, which extend to the purchase of all houses, whether for occupation by the purchaser or otherwise. But any modification of Stamp Duty which was dependent upon the occupation of the property or the use to which the property was put would be quite impracticable, because the Stamp Acts both require and provide for certainty in regard to the payment of duty.
The principal Act of 1891 provides that an instrument "not duly stamped in accordance with the law in force at the time when it was first executed" is not, except in criminal proceedings, "available for any purpose whatever." When an instrument is brought for adjudication to the Commissioners of Inland Revenue and is stamped by them, it is thereafter "available for all purposes notwithstanding any objection relating to duty." It is, therefore, impracticable—I am not merely riding this off on an administrative point; it is worth putting on the record—to vary stamp duty according to circumstances which may change from time to time after the transfer upon which the duty is imposed.
Therefore, the only way in which my hon. Friend's intention can be attained is by a straight reduction or abolition of stamp duty in respect of all transfers, certainly all transfers of property other than stocks and shares. This is the method which a Conservative Government have twice used, in 1952 and as recently as the Finance Act of last year, by both of which Measures Stamp Duty on transfers of property for considerations below £5,000 was reduced so substantially that today the stamp duty on a house of £3,000 is as low as £15.
I will not argue that even the sum of £15 is not a consideration or an obstacle along with the other requirements—the deposit, the legal charges, and so on—in the purchase of a house; but I do say that great strides have been made since this party came into office in 1951 towards the reduction of this obstacle to the purchase of houses. The question, therefore, is whether that process should be carried further in this Finance Bill.
My hon. Friend asked what would he the cost of the Clause. For the reasons 1252 which I have given, it is hardly possible to estimate precisely what its cost would be, but I have looked at various possibilities and various changes of Stamp Duty such as exemption up to £3,000 and a scaling down of the present duties between £3,000 and £5,000 or £6,000. I find that no alteration in duties which could have any practical effect would cost less than £5–£6 million in a full year.
I think that my hon. Friend will, therefore, see that a further advance in the direction in which we have twice taken important steps in the last few years is, on grounds of cast, ruled out within the ambit of the present Finance Bill. I say that without any prejudice either to the purposes which he has in mind or to the possibility of taking further steps in that direction in future years.
§ 11.30 p.m.
§ Mr. Mitchison
Does the hon. Member say that the Conservative Party is sufficiently interested in a property-owning democracy, and in the consequent reduction of Stamp Duty, as to take £5 million or £6 million out of the concessions the Government are making to Surtax payers in the interests of a property-owning oligarchy?
§ Question put and negatived.