HC Deb 18 December 2003 vol 415 c1705
5. Mr. Bill Wiggin (Leominster) (Con)

What discussions he has had with representatives of licensees regarding the case for reform of stamp duty land tax. [144720]

The Financial Secretary to the Treasury (Ruth Kelly)

In the Finance Bill of 2003, the Government modernised and streamlined the stamp duty system. As a result of tax avoidance, only half the stamp duty owed on all large commercial property transactions was being paid. As part of our package, we reviewed the lease duty regime to ensure that businesses pay stamp duty fairly and consistently. Following consultation, including with the British Beer and Pub Association, the stamp duty land tax proposals were amended to help all tenants, but it was targeted at small and medium-sized businesses.

Mr. Wiggin

Is it correct that independent evidence shows that the average pub licensee faces a tenfold increase in the amount of tax from £600 to £6,000? How can the Financial Secretary possibly justify that?

Ruth Kelly

From the information that the licensed trade supplied, we know that very few leases were exempt from stamp duty under the old regime. However, increasing the threshold means that more than 30 times the number of leases in the sector will be exempt from stamp duty land tax duty.

Mr. Mark Prisk (Hertford and Stortford) (Con)

For licensees and others, the tax is half-baked and hideously bureaucratic, yet the real scandal is the increase in the tax burden, to which my hon. Friend the Member for Leominster (Mr. Wiggin) referred. Since 1997, stamp duty has been increased four times, and now we have discovered a fifth increase. Tucked away on page 217—how surprising—of the pre-Budget report is the information that the Government expect stamp duty revenue to rise from £7.5 billion this year to £9.3 billion next year. Given that property prices are expected to rise next year by 8 per cent., how do the Government plan to secure an increase of 24 per cent. in revenue?

Ruth Kelly

The hon. Gentleman has got his facts completely wrong. The tax burden is lower now than it was almost throughout the 1980s. He must realise that the economy is stronger than it has ever been, with 1.7 million more people in work, interest rates at their lowest since 1955 and net wealth, including property prices, rising.