5. Mr. AndrewRosindell (Romford)To ask the Chancellor of the Exchequer what recent representations he has received on his policies on taxation in relation to residential property. [138328]
§ The Economic Secretary to the Treasury (John Healey)As with all tax issues, the Government consider representations that are received as part of the normal Budget process.
§ Mr. RosindellDoes the Minister understand that since this Government came to power in 1997, their polices have been absolutely devastating for the hard-pressed homeowners of this country, with a 60 per cent. average increase in council tax and a devastating increase in stamp duty? When will the Government introduce policies that encourage, rather than discourage, home owning?
§ John HealeyAs my right hon. Friend the Chancellor said, there are I million more homeowners in the United Kingdom since this Government came to power in 1997.
§ Dr. Brian Iddon (Bolton, South-East)Bearing in mind the Government's energy efficiency commitment, will my hon. Friend look again at the charging of VAT on refurbishing older properties and on do-it-yourself energy-saving products?
§ John HealeyMy hon. Friend is a passionate and long-standing advocate of energy efficiency measures, and he will be aware that we are arguing with the Commission and our partners in the European Union for greater freedom to allow a reduced rate of VAT on energy-saving materials that people use on a DIY basis. We are still constrained by European rules that prevent some of the measures that my hon. Friend would like.
§ Mr. Andrew Tyrie (Chichester)Over the past five years, the Government have clobbered homeowners with massive increases in stamp duty that have resulted in a nearly fivefold increase in the total yield to more 403 than £3.5 billion a year and hit many people's main source of saving. A few weeks ago, the Government ruled out taxing capital gains on first homes— a seemingly enormous pledge that I welcome. Will they now rule out further increases in stamp duty, at least for the forthcoming Budget?
§ John HealeyI sometimes wonder whether Conservative Members are living in the real world. As I said to the hon. Member for Romford (Mr. Rosindell), the Chancellor considers representations and makes decisions on tax as part of the Budget process. As for tax rises—[Interruption.The shadow Chancellor is shouting "60". The Tories treat this like a maths test for a seven-year-old. They go through our Budget documents looking for the plus signs and add them up, but they do not take into account the cuts in income tax, the pension credit, the working families tax credit or the child tax credit. The personal tax and benefit changes that have been made since 1997 have had a direct impact on householders, who are, on average, £775 a year better off: the poorest and those with children are better off still.
§ John Cryer (Hornchurch)Does my hon. Friend agree that council tax is fundamentally a regressive form of taxation because it was introduced by the Tories to replace Mrs. Thatcher's poll tax and is closely related to it? Will my hon. Friend the Minister consider making it more closely related to ability to pay, perhaps by extending the banding so that wealthier people in wealthier areas pay proportionately more?
§ John HealeyQuestions about council tax bands and the ratios between them will form part of the analysis and decision making in the revaluation of council taxes that starts in 2005 and will affect bills from 2007.
I emphasise to my hon. Friend and Conservative Members that the average council tax per dwelling this year under Labour councils is £818, whereas under Liberal Democrat councils, it is £934 and £1,008 under Tory councils.