Stamp Duty (Hansard, 28 February 2002)

§ 2. Shona McIsaac (Cleethorpes)
If he will make a statement on stamp duty exemptions. [35743]

§ The Chancellor of the Exchequer (Mr. Gordon Brown)
New investment, new businesses and new jobs are the key to regenerating our high unemployment communities. In the pre-Budget report is a special measure to help the slowest growing and highest unemployment areas of Britain. The Government have abolished stamp duty in 2,000 wards in constituencies throughout the country, for all transactions for homes and business properties worth up to £150,000, leading in the first three months to 5,000 claims for purchases worth £450 million—an average saving of £900 per transaction. As my hon. Friend is aware, the qualifying areas include two wards in her constituency. In the Budget I propose to legislate so that we can take more business property transactions out of stamp duty in these areas.

§ Shona McIsaac
I thank my right hon. Friend for that reply. The measures certainly have been welcome in the two wards in my constituency and the three wards in neighbouring Grimsby. I welcome my right hon. Friend's statement that he will extend these welcome exemptions, but will he also consider including more of the deprived 816 wards in that exemption? Residents in the neighbouring wards to the two in my constituency would certainly like to benefit from these measures as well.

§ Mr. Brown
The definition that has been used for choosing the wards is that they are the 15 per cent. most deprived wards in the country, and that has led to the choice that we have made, based on the most up-to-date information. My hon. Friend has welcomed our plans to extend that scheme involving business properties, and I hope that they will be welcomed on both sides of the House. What we are proposing here is a move from the old strategy, which was either providing girocheques to people who were unemployed or providing only property subsidies. The stamp duty exemptions go side by side with changes in policy to reduce VAT for conversions in high streets, for transferring businesses into houses; the community investment tax credit, which we are introducing in the Budget; and the community investment fund. All these measures are designed to help the creation of small businesses and the development of economic activity in communities that have hitherto been high unemployment communities.

§ Mr. Roger Williams (Brecon and Radnorshire)
Have the United Kingdom Government made a state aid notification on stamp duty exemptions to the European Commission, and if so, what response has the Commission made?

§ Mr. Brown
We believe that our proposals will be acceptable to the Commission. We will go ahead with our proposals on that basis. I will announce further proposals in the Budget on that basis. The hon. Gentleman should be particularly pleased, because 42 per cent. of areas in Wales qualify under our proposals. I emphasise that the help that is available now to start small businesses in those areas, including advice and help from the Small Business Service in England and the relevant services in Scotland and Wales, should enable us to bridge the gap whereby, in Britain, only half as many small businesses are created as in America, and only one small business is created in the poorest areas for every six created in the richest areas. Therefore we will go ahead with our proposals.

§ Mr. Dennis Skinner (Bolsover)
Is the Chancellor aware that, welcome though it is that there has been a 1 million cut in unemployment and that we have the highest level of employment throughout the country, he is right to concentrate on those areas that need to be revitalised after the massive attacks—pit closures, textile closures and so on? Will he therefore bear it in mind that the new £24 million development in Shirebrook in the north Derbyshire area is important, as is junction 29A, which will revitalise three constituencies in north Derbyshire? Will my right hon. Friend, together with what he is about to announce today, ensure that that type of programme continues, because there will be not only economic benefit but electoral benefit from acting in this fashion?

§ Mr. Brown
Our policies for both stability and economic regeneration have led to the creation of 817 1.3 million more jobs in this country over the last five years. At the same time we have the lowest inflation and the lowest long-term interest rates for 40 years.
I should have thought that among the Conservatives there would be at least one Member wishing to intervene to thank us for introducing these measures because the shadow Chancellor has four wards in his constituency that are benefiting from the stamp duty exemption, and that is one of the reasons why we have cut unemployment in his constituency by 50 per cent. over the last five years. It is about time that the Conservatives abandoned their policy to get rid of the new deal and supported our policies for both stability and prosperity.