House of Commons Hansard Debates for 7 Jul 1992

Mr. Nigel Griffiths (Edinburgh, South) : The new clause goes to the heart of the Conservative bogus commitment to lift the burden on home owners and the housing

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industry. What reasons have the Government given for reimposing stamp duty at this time? Do they claim that the recession is over, that recovery is under way or that the housing market is beginning to boom?

Even the Government's friends are sceptical about those issues. Like other hon. Members, I receive many begging letters. Few have been as pitiful as one from the House-Builders Federation, the director of which sent me a copy of a letter he had written to the Prime Minister, saying :

"now that the euphoria has passed"--

clearly, he has been slightly unhinged--

"it must be evident to you that nothing much has changed since 9th April. The economy is still locked in recession and Treasury claims of recovery are widely disbelieved. Indeed, they are thoroughly discredited."

Commenting on the performance of the Chancellor, he says of the Treasury :

"The housing market has been one of its greatest failures ... we built fewer houses than in any decade since the 1940s. This imbalance alone left a shortage of more than one million homes by 1990." The House-Builders Federation, speaking for the private house building industry, as Conservative Members have done in this debate, writes :

"Despite lower house prices and interest rates the continued recession is holding back the housing market. After signs of an improvement in January and February, the housing market has slowed down markedly in May and June If further damage to purchaser confidence is to be avoided, the existing stamp duty moratorium should be extended beyond 20th August An improving housing market, with its stimulus to retail spending and to employment through new housebuilding, can play an important role in economic recovery." Government figures pay eloquent testimony to those sentiments. The slump has never been clearer. In my constituency and in Scotland generally, the boom in the issuing of mortgages by building societies occurred not in 1987, 1988 or 1990--although mortgage lending was much higher then--but in 1984. By 1991, lending had hit a 10-year low. That has meant, for example, that Edinburgh house prices have fallen dramatically and, as we have heard, they have fallen in London and throughout the country.

No wonder the new clause is supported by the building industry, the mortgage lenders and everyone who believes that people should not be prevented from buying a first home or from moving to a new home, whatever the reason. If the Economic Secretary does not accept it, he will find that the Government's erstwhile friends will desert them, never to return. A time of deep recession is not a time at which to drive up house prices.

If the new clause is not accepted, 20 August 1992 will go down in housing history as the day when an iron curtain was drawn, separating tens of thousands of families from their dream of home ownership for the foreseeable future. According to the housebuilders, the frosty freeze that will follow 20 August will make last year's housing slump seem like a boom. After a long, cold summer and a long and bitter winter--a winter of discontent--for milions of home owners and aspiring home owners, 20 August will come as the Government's nemesis. There is time, however, for the Government to listen to their friends in the building industry, who donated to their election campaign the lavish sums that put them in power and gave them the power to vote for or against home owners and aspiring home owners. We wait, but not with bated breath.

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9 pm

Mr. Den Dover (Chorley) : I entirely deny that the Government introduced the moratorium in late 1991 as a gimmick. It was a responsible gesture, aimed at injecting some life into the housing industry.

As one who has spent almost all his career as a civil engineer in housing, construction and property development, I consider the continuation of the relief immaterial : I do not believe that it will have any effect, adverse or positive, on the housing market. In the past it has exerted little pressure on the market ; few additional sales have resulted. Anyone trying to buy a house anywhere in the country now is looking not for a 1 per cent. price reduction, but for a reduction of 5, 10 or 15 per cent.

I want to dispel some of the doom and gloom. In the south-east a reduction of 25 per cent. or, more probably, 30 per cent. is possible, but in the more responsible areas--the north, the north-west and the north-east--house prices never reached such crazy levels. House owners and house builders are suffering the consequences of those price rises. My hon. Friend the Member for Buckingham (Mr. Walden) blamed the construction industry for the present parlous state of the economy, but I believe that it is the other way around : the economy is in such a difficult position that people are unemployed, fearful of becoming unemployed or worried about the falling value of their properties.

I am grateful to the Government for introducing the minor benefit of the moratorium last year, but, rather than continuing it, they should reduce the amount of public expenditure--hundreds of millions of pounds--that is involved in its perpetuation. The house building industry wants positive action. It wants lower interest rates and more action on repossessions ; it wants pressure to be exerted on the insurance industry, because the present indemnity insurance premium levels are criminal. It does not help house buyers to make them pay a swingeing insurance premium for a mortgage of more than 70 or 80 per cent.

The housing industry is probably the most private-enterprise oriented industry in the United Kingdom. It does not want subsidies ; it wants the real market to apply, and it is more than capable of lifting itself to its former level. So often in the past, successive Governments have used the building industry as a regulator of the economy. At difficult times they have held back public expenditure, especially on council houses and infrastructure ; at boom times they have expected too much of the industry, and the economy has overheated as a result.

I signed the early-day motion tabled by my hon. Friend the Member for Crosby (Sir M. Thornton), but I told him that--along with other hon. Members, such as my hon. Friend the Member for Romford (Sir M. Neubert)--I had pressed for the total abolition of stamp duty for at least 10 years. The Government should bring that about in the next few years, for I am certain that, if left to its own devices and to natural market forces, the housing industry will lift off. This minimal measure will not do much.

Mr. Betts : The stamp duty changes that were introduced last December were not, in my view, part of a coherent economic policy or of a coherent housing policy. They were a recognition by the Government that economic

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recovery was not happening and that an election was coming. It was a matter of electoral expediency, in the crudest sense.

The problem for the Government is that economic recovery has still not happened and that the election has come and gone. The Government now feel that the measure that they introduced to try to win some popularity has served its useful purpose.

I agree with some of the comments made by the hon. Member for Chorley (Mr. Dover) about the Government's housing policy. They were very interesting. However, stamp duty is a matter not of general housing policy but of its potential impact on the housebuilding industry. If I were feeling a little more charitable about the Government's designs, I might even accept, as the Chancellor of the Exchequer said at the time, that there was recognition of the fact that the housebuilding industry could be one of the important motors for economic recovery. If the Government did recognise that fact, when they looked around they found that there were not many alternatives.

The Government looked at the council house building sector and found that it no longer existed because their bigoted and dogmatic policies towards council housing over the years had killed it off. They were not prepared to take the obvious step of releasing capital receipts--which, by any logical definition, would have had no impact on the public sector borrowing requirement--which would have allowed local authorities to build council houses. They looked at the housing association sector and saw a little increase there, but the Treasury was growing worried about the cost. The Government also looked at the private rented sector and found that, after their 13 years in power and an awful lot of talk, the private sector was continuing to decline.

Housebuilding in the private sector remained virtually steady throughout the 1980s, though the private sector had not replaced the fall-off in the council house building sector. By the early 1990s, however, private housebuilding had fallen to a record low. Stamp duty exemption was introduced against that background.

If we examine the impact of that measure so far, it is fair to say that there are real doubts about its effectiveness. It has had a limited effect on the housing market ; there has been no great take-off. In Sheffield, which has not been so badly hit by the fall in house prices and the fall- off in activity as other parts of the country, there are no clear signs of a sustained recovery. The question that we should be asking is not what has happened as a result of this measure but what the impact will be if the exemption is removed. It is just possible that the failure of the housing market to take off in the last few months was not due to the stamp duty changes. It is just possible that the housing slump would have been much worse without those changes. The real worry and concern is that the reimposition of stamp duty now will send the housebuilding industry into yet further decline. Confidence in the housebuilding sector is very delicate. The reimposition of stamp duty could have a significant impact in the wrong direction.

Before I came to the House today, I asked a few builders and estate agents in Sheffield for their views. Obviously they have a vested interest, but they also have

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knowledge that is worth sharing. Garton, Lockwood and Riddle, one of the leading estate agents in Sheffield, said that there is a real problem of confidence, that ending the exemption will be just another element in the equation which will be unhelpful to recovery and that the market is slow. The House-Builders Federation said that "while the stamp duty moratorium may not have had the positive effect that was hoped for, its reimposition will simply depress confidence further and delay recovery."

That point is borne out by Gleeson Homes, a major housebuilder in Sheffield. It referred to the real problems caused by the deep recession and said that the reimposition of stamp duty will further weaken any return of confidence. It said :

"We believe that by suspending Stamp Duty it will not necessarily create an early market recovery but reimposing Stamp Duty will have a further depressing factor on an already weak, buyers confidence." Omega Homes have said that people have been rushing to meet the deadline in the last few weeks, but now it has all gone flat. Henry Boot told me that any reduction could have a detrimental effect on the housing market, which is just showing a few signs of recovering. And, of course, there are the comments by Tim Melville-Ross of the Nationwide building society, who said that the Government proposals could have a fatal impact.

It is very clear from all this that there are some doubts so far about the effectiveness of the measures taken last December and a very real worry about the impact of reversing those measures at this time.

There are two questions for the Government. Is the economic recovery so assured that the Government can afford to take any steps that might curtail it? I believe that the answer to that has to be a very clear no. Secondly, is the public sector borrowing requirement so completely out of control that the Government cannot afford another £400 million to continue the current exemption?

The real problem for the Government is that one of their economic disasters, the PSBR, is now constraining their ability to deal adequately with another of their disasters, the economic slump which they have created. My hon. Friend the Member for Wrexham (Dr. Marek) gave the Government a way out with some suggestions about how they could negate the effects of the PSBR increases that would come from a continuance of the exemptions. Therefore, the only question left open concerns the impact on economic recovery.

I hope that all hon. Gentlemen who spoke in favour, in principle, of the proposals in the new clause moved by the Opposition will support it in the Lobby. I do not believe that any of them, in the very delicate state of the economy, can ignore the risk that the measures that the Minister is proposing might have the very damaging effect of curtailing the possibilities of recovery. I will put it no more strongly than that. I therefore think that it is worth taking the risk, for £400 million, of supporting the new clause and giving a bit of hope to the housebuilding industry in the very difficult situation that it is experiencing.

Mr. Milburn : When Ministers announced the moratorium on stamp duty it was part of a package of measures designed to stimulate recovery in the housing market. The argument deployed by the then Financial Secretary was that the measure

"would not transform the world"

but would give a mild impetus towards housing recovery.

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I have a dreadful feeling as we sit here tonight that there were two kinds of impetus towards the introduction of the moratorium. Certainly the depth of the housing crisis with which Ministers were confronted was one, but I suspect that the second was the ticking away of the general election clock sounding very loud and clear in Ministers ears, and providing a very clear incentive to tackle the problems of the housing crisis.

Mr. Ronnie Campbell (Blyth Valley) : Cynical.

Mr. Milburn : The hon. Member for Blyth Valley shouts "Cynical". Well, maybe I am.

With its sister policy, the mortgage rescue plan devised by the building societies, the stamp duty moratorium was supposed to kill two birds with one stone : first, to give a boost to the housing market ; but, secondly, to give a boost to the Conservatives' electoral fortunes.

Six months on, the Government have certainly achieved one objective, but they have failed lamentably in the other. Housing and the economy as a whole remain stuck deep in recession. The housing crisis that prompted the moratorium in the first place has not gone away ; arguably, in some respects, it has even intensified. Hon. Gentlemen are therefore faced with a very simple question : why is it that the measure that was so important six or seven months ago is no longer relevant? If we accept that the housing crisis is as deep today as it was in December or January last, why should the moratorium be withdrawn?

9.15 pm

Mr. Geoffrey Dickens (Littleborough and Saddleworth) : Perhaps the hon. Gentleman will accept from me an answer to that question. The letter from the House-Builders Federation to which there has been reference says that the moratorium has had very little effect on the housing programme. The relief is not the primer that we hoped it would be, and it is costing £430 million. Has not the House-Builders Federation answered the hon. Gentleman's question?

Mr. Milburn : I assume that the hon. Gentleman accepts that, in effect, Ministers have wasted about £400 million of public money. I see nods from Conservative Members. And this is from a Government who accept financial rectitude and tight control of public expenditure, a Government who always have the correct financial and economic answers.

Let me tell the House what the House-Builders Federation said. I have a letter from Mr. Adamson, the regional chairman in the northern counties region, which says :

"I accept that suspending stamp duty will not kick-start the market on its own, but reintroducing it will be a further depressing factor to house purchase confidence."

The hon. Member for Crosby (Sir M. Thornton) made a very important comment when he said that the housing market is sensitive and very prone to shifts in confidence. It is confidence that counts, yet here we have an example of the ways in which the Government undermine confidence in the very housing market that they are supposed to support.

Mr. Marlow : The hon. Gentleman seems to be implying that the Government have wasted the £400 million. If he is saying that that money has been wasted--

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Mr. Bob Cryer (Bradford, South) : He is not saying that. You are.

Mr. Milburn : You are saying that it has been wasted.

Madam Deputy Speaker (Dame Janet Fookes) : Order. There are many "you"s flying about. I hope that they do not refer to me.

Mr. Marlow : Is the hon. Gentleman saying that that money has been well spent?

Mr. Milburn : I refer to comments of the hon. Gentleman's hon. Friends--and I note the nods from Conservative Members--that the money has been wasted.

When this measure was introduced, Ministers made it very clear that it would take some time to become effective. We have now had six or seven months to test its credibility. I hope that when the Financial Secretary introduced it he did not have in mind just the period leading up to the general election and immediately after it. That would give rise to a great deal of cynicism among hon. Members on both sides of the House.

The housing crisis has not gone away. The number of families losing their homes through repossession has hit 144 per day. As is normal in these situations, Conservative Members are indifferent to the consequences of their own Government's policy. On the programme "Desert Island Discs" a few months ago the Prime Minister, with his finger on the pulse of public concern, as usual, told Sue Lawley : "Well, we stopped, if you recall, the repossessions before Christmas."

Let the Prime Minister and other Ministers express that sort of sentiment to the 126 families in the Darlington area who had mortgage repossession orders against them in the first four months of this year--a 9 per cent. increase on the number for the same period last year. In the north-east as a whole about 1,670 families lost their homes in the first four months of the year, compared with 1,284 in the same period last year.

Mr. Marlow : A little while back, the hon. Gentleman was quite candid and straightforward. He said that the money that the Government had spent so far had been wasted. In that case, why does he want to extend the exemption to March next year?

Mr. Milburn : The hon. Gentleman is obviously confusing what I have said with what his hon. Friends have said. They have said that the £400 million has been wasted, and others nodded in assent.

Mr. Dickens : It may be that in terms of priming the housing market the money has been wasted, but the hon. Gentleman should not forget all those families who have been grateful for that tax concession when buying their homes. The money was not wasted because it stayed with the people.

Mr. Milburn : In that case, if the measure was important enough in the past seven months and if it has failed lamentably, as it has, to stimulate the major pick-up in the housing market for which we all hoped, why on earth, at this juncture, are the Government saying that enough is enough? Why should not the measure be given a chance to benefit other families, other owner-occupiers and young families seeking to get on the first rung of the housing ladder?

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By ending exemption, the Government will be seen as delivering a kick in the teeth to young families who are looking to get on the first rung of the housing ladder. Far from kick-starting the recovery in the housing market, by ending the moratorium on stamp duty, the Government will kick away the prospective recovery in the housing market. The crisis is as deep as ever and the Government, by withdrawing what paltry assistance they offered six months ago, leave us to draw no other conclusion than that the whole exercise was designed not to help people save their homes but to help Conservative Members of Parliament to save their seats. That was the cynical purpose underlying the measure.

The exemption was a cynical and crude exercise in manipulating genuine public concerns about the difficult circumstances of home owners. The mortgage rescue plan and the temporary exemption of stamp duty have fulfilled their purpose for the Conservative party but not for those who are suffering the consequences of the policies pursued by the Government. I only wish that Conservative Members would listen not only to the House- Builders Federation but to the Royal Institution of Chartered Surveyors and the building societies, and to the estate agents in my constituency, whom I contacted today, who are urging that the moratorium be continued if the fragile recovery that may be around the corner is not to be brought to a shuddering halt. As the hon. Member for Crosby said, we all know that confidence is the key to recovery in the housing market. After all, we are told that all the other ingredients are in place--prices have fallen, there is a glut of properties on the market, it is a buyers' market--but people are not buying because they lack confidence or the incentive to do so. The Government can help with both. They can pursue measures to stimulate the economy by cutting interest rates, by investing in the regions, in infrastructure and in training. They could also stimulate housing more directly. For example, they could ensure that there is a phased release of capital receipts to allow local authorities to make good use of the money that is lying useless in bank accounts around the country. Those assets should be put to use. They should not be allowed to gather dust.

The Government should not be closing options at this stage ; they should be opening them up. First-time buyers are the mortar of the housing market and they must feel that it is worth their while to invest in a home. Suspending stamp duty for another nine months will not, by itself, instil new confidence. However, it will be a pointer in the right direction. The removal of the concession can only make matters worse.

My hon. Friend the Member for Barrow and Furness (Mr. Hutton) said earlier that young families who are hoping to get on to the first rung of the housing ladder will look rather askance at a Government who claim that they cannot continue the moratorium because of public expenditure concerns, but who, at the same time, are prepared to spend £730 million ending stamp duty on share transactions as from next April.

I have a direct point for the Economic Secretary to the Treasury. No doubt some Conservative Members are genuinely concerned about the ending of the moratorium, but they will not be prepared to put their money where

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their mouths are. They will vote against the new clause. I have no doubt that the new clause will be lost as a consequence of that. However, what are the Government prepared to put in place of the moratorium to ensure that there is a recovery in the housing market? What are they going to do to ensure that there is new investment in housing so that we begin to house our homeless people and start to bring an end to the repossession crisis that is gripping my constituency and others around the country? What new measures will the Government introduce tonight? By all means end the moratorium on stamp duty, but let us hear from the Conservative Benches exactly what new policies the Government are prepared to bring forward to stimulate the recovery that we all want to see in the housing market.

Mr. Nelson : There are perhaps two things that we can all agree on at the end of this extensive debate. The first is the comment of the hon. Member for Barrow and Furness (Mr. Hutton) that this has been a very high- quality debate and the other is that stamp duty is not a much-loved tax.

I will try to persuade the House that stamp duty raises sums of money that the Government cannot ignore or forgo. I will also try to persuade the House that when introducing a concession for a time-limited period, it does not induce one to embark on further concessions unless one sticks to the conditions. That does not mean that they are immutable, but that is a powerful argument for sticking to the concession that has been agreed.

If money is available, there is a question of judgment as to how most effectively it can be spent in the regeneration of the housing market and in other social and industrial areas and priorities for public expenditure. We have debated some of the criteria and considerations to a high standard.

I want first to set out the financial parameters. The concession has cost £400 million. During that time, 540,000 housing transactions have benefited and have not had to pay stamp duty. Although the moratorium has been of limited value, it has been of real value. It has meant that a number of transactions have been brought forward, and a number of individuals have not had to incur an additional marginal capital cost on the purchase of their properties. That is still happening, for the moratorium period has not yet ended. Many people are bringing forward their house purchases, to the benefit both of the construction industry and the general liquidity of the housing market.

The hon. Member for Wrexham (Dr. Marek) asked what amount of money the delay in the implementation of TAURUS has released. The answer is about £850 million. Of course, the concession, which costs about £400 million, leaves a balance. The hon. Gentleman rightly asked, "Is not that money available?" Sadly, it is not available. The balance of those sums is included in the Budget strategy of my right hon. Friend the Chancellor. It is part of the overall equation of income and expenditure of the Government ; therefore, it is not money which has been released and which can easily be spent.

9.30 pm

If we were to extend the moratorium, it would be an additional cost which would have to be financed by additional borrowing, additional taxation or cuts elsewhere in public expenditure. It behoves hon. Members, principally Opposition Members, who easily call for an

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extension to say where the money would come from, what additional tax or borrowing burden they would be prepared to live with, or what public expenditure cuts they would be prepared to make.

I shall complete what I was saying about the financial parameters, because they are very important. The moratorium cost £400 million. Were we to extend the moratorium, as the new clause provides, for the rest of the financial year, the additional cost is estimated to be £430 million. That is not an insignificant sum, even in terms of an addition to the borrowing requirement.

One of my responsibilities in the Treasury is to help to raise the funding requirement through national savings and through the gilt-edged markets. That is not easy. Substantial sums are involved. We are talking about very material additional amounts which would be bound to inhibit the extent to which we could further reduce interest rates at a later date or the extent to which we could further reduce taxes--objectives to which the Government have firmly adhered.

Mr. Marlow : My hon. Friend has said quite clearly that the moratorium has persuaded people to bring forward their house purchases. Does he agree that if the moratorium were extended to the end of this year, thereby extending the house-buying season, other people would bring forward their house purchases? If they brought forward their house purchases, what impact would that have on the recovery of the economy? What impact would that have on tax revenues? What impact would that have on the reduction in the cost of unemployment?

Mr. Nelson : I was about to refer to my hon. Friend's intervention, because I listened carefully to what he said. His proposal would cost another £220 million. That money would have to be found from one of the sources to which I referred. Also, our hon. Friend the Member for Bridlington (Mr. Townend) said that part of the effect of increasing liquidity by bringing forward sales would be diminished if we announced that we would extend the exemption period, because people would relax and be less keen to complete sales early.

Although it is not the intention to have an enormous bunching of house sales towards August, that would be the effect of a finite date on the exemption period. Wherever we set that, whether later in the financial year or at the end of it, we would have the same effect. The substantial answer to my hon. Friend's proposal is that it would cost us £220 million-- again a highly significant sum.

The hon. Member for Hornsey and Wood Green (Mrs. Roche) referred to the problems of first-time buyers in London. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) referred to the 25 per cent. reduction in house prices in London. The Government are very conscious of the personal problems that that imposes on many families who are struggling with mortgage repayments. We are also very conscious of the difficulties that have been faced in the construction and property-related industries because of it, but, to the extent that prices have fallen, the only group who have benefited are first-time buyers, because property prices are more affordable. Of course, I acknowledge that that depends on whether someone has a job, can afford the mortgage payments and so on. However, more affordable

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accommodation at least offers more hope to first-time buyers than the ridiculous, spiralling boom prices that many of them faced previously.

My hon. Friend the Member for Crosby (Sir M. Thornton) made an outstanding contribution to the debate. He said that the debate was about confidence in the housing market. That point was reiterated by my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant). I acknowledge that confidence is essential to both prospective buyers and people maintaining their financing commitments once they have bought a home.

However, the Government should not try to rekindle confidence by fiscal or other measures that simply inflate house prices still further. The Government already have in place a range of measures, including mortgage interest tax relief and other financial supports. We provide substantial support for home ownership. Surely the main factor that will revive confidence in the housing market is not fiscal stimulus provided by the Government but economic policies that lead to further reductions in interest rates when it is sensible and responsible to cut them. Our policies should provide a sustained basis for more liquidity and healthier prices in the market, but especially more liquidity.

Mr. Betts : Will the Minister give way?

Mr. Nelson : If the hon. Gentleman will permit me, I shall make a little progress. I will come to his remarks later.

The hon. Member for Leeds, East (Mr. Mudie) referred to unemployment in the construction industry and in his constituency. I readily acknowledge that the social and employment impact of the recession in the housing market has been serious. Those of us who represent constituencies in the south are at least as conscious of that as the hon. Gentleman.

While my hon. Friend the Member for Romford (Sir M. Neubert) understood the Government's position, he reiterated his long-held conviction that we should get rid of stamp duty altogether. He espoused that conviction in compelling fashion.

As I said, stamp duty is an unloved tax and abolishing it altogether is an appealing line. However, the cost of doing so would be £1 billion. Approximately £800 million is raised from transactions up to the current threshold, but another £200 million to £300 million over and above that is raised from much higher-priced properties. The total amount is about £1 billion. To abolish it would impose on us opportunity fiscal costs. Where would we raise the revenue from--extra borrowing or cuts in public expenditure?

I cannot predict in the longer term the decisions of the Government and the Chancellor on stamp duty. All such taxes are examined from year to year. But the Government and the Conservative party have a good record on stamp duty. Since we came to office we have not only halved the rate of stamp duty on property but increased the threshold twice.

Mr. Roger Moate (Faversham) : Does my hon. Friend the Minister recall that we seemed to find it relatively easy to get rid of stamp duty on all exchange dealings and share transfers, at a cost of almost £1 billion yet we seem to find it incredibly difficult to get rid of it for the much worthier matter of house purchase ? Many of us find it extremely difficult to walk through the Lobby in support of stamp

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duty--a tax to which most of us have objected for decades. Can he at least tell us that there is some prospect that in years to come, sooner rather than later, we will consider getting rid of stamp duty altogether?

Mr. Nelson : We can always consider it. However, it would be improper for me to hold out false hopes to my hon. Friend. I am not in a position to say that we anticipate or intend to abolish stamp duty. The considerations that led to that decision for paperless transfers in the TAURUS system had as much to do with the new technical systems that were being imposed and the attractions of the London market for international share dealings as anything else. Stamp duty is a duty on documents and it extends to not only financial transactions and house purchases but other documents. My hon. Friend the Member for Cambridgeshire, South-West said that reassurance about the Government's commitment to home ownership was required. I am happy to provide that reassurance, even though my hon. Friend the Member for Buckingham (Mr. Walden) is not in the Chamber, as he also made an interesting speech, which questioned the import of the remarks made by my hon. Friend the Member for Cambridgeshire, South-West.

The Government are committed to maintaining and encouraging home ownership, and the range of measures that we have already implemented should stimulate it. The stamp duty concession was designed to promote and encourage home ownership, as were many other measures announced by my right hon. Friend the Chancellor. A testimony to that is the £600 million worth of payments to people on income support who are having difficulty with their mortgages.

My hon. Friend the Member for Cambridgeshire, South-West said that the boom went too far, too fast, and that, as there was no prospect of its being repeated, we could afford to extend the concession. Large sums of money are involved and, as he rightly remarked, it is much more important for us to pursue policies designed to reduce interest rates and to maintain restraint on public expenditure. The hon. Member for Ashfield (Mr. Hoon) dismissed the moratorium, but then called for its extension. That paradox was also implicit in speeches by the hon. Member for Wrexham and others. They called the moratorium a political ploy and described it as being of marginal benefit, if any, but also called for its extension. I have mentioned the cost involved. That is real money and it is a substantial amount of money, which remains in the private, rather than the public, sector.

In a brave and interesting speech, my hon. Friend the Member for Buckingham said that housing should not be a barometer of the economy and that high- priced property is a deformity of the economy. I acknowledge the intellectual persuasion of much that he said, but it is a question of "where you are at" and not "where you come from". For many years, substantial support has been given to the ideal and the reality of home ownership and the Government are not about to abandon that or to undermine it in any switch of policies. The hon. Member for Knowsley, North (Mr. Howarth) supported an extension of the moratorium, in the absence of other Government policies. I have sought to explain that the Government have other policies--notably on the

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broader economic front--which are designed to return a healthier degree of liquidity in transactions to the property market. My hon. Friend the Member for Ruislip-Northwood was right to remind the House that owning one's home is a family aspiration and that for many people in London ownership has had to be deferred because of the difficulties that they face. As mortgage liabilities have in many cases exceeded the value or properties, following the fall in prices, home ownership has also become more difficult for those who have mortgages on their homes to realise.

My hon. Friend said that stamp duty was a tax on mobility. The substantial reduction in house prices has reduced the differential between prices in the north and south of England. During the boom, prices spiralled up in the south. Although the fall in price has been injurious to many home owners, it has meant that the differential has narrowed. If anything, that should encourage mobility rather than discourage it.

My hon. Friend the Member for Bridlington was right to concentrate on public expenditure. It is essential that the Government are mindful of the impact of public expenditure on their ability to deliver lower interest rates and lower taxation in years to come. I am sure that all my hon. Friends agree that the Government have an essential early responsibility to get a grip on public expenditure if we are to deliver the sort of political promises with which we gained the trust of the electorate at the general election. We shall not do so if we grant extensions and engage in expenditure of this order. Stamp duty is but one of many items on which the Government will rightly be pressed for concessions to bring personal relief, but we have a greater responsibility. We must bring the benefits of lower interest rates, lower inflation and lower public expenditure to our economy.

The hon. Member for Edinburgh, South (Mr. Griffiths) gave an apocalyptic, theatrical description of his predictions for Scotland. I acknowledge that there have been serious problems with the depth and severity of the property recession in Scotland, but that alone is not a reason for extending the relief, given the cost for the country as a whole.

My hon. Friend the Member for Chorley (Mr. Dover), whose considerable knowledge and experience in these matters is acknowledged throughout the House, also supported the case for total abolition, about which he has spoken on many occasions. I am sorry that I cannot offer him that prospect tonight, but I hope that he understands why we must reintroduce stamp duty in August. The hon. Member for Sheffield, Attercliffe (Mr. Betts) said that as the market would have been much worse without the moratorium, now is not the right time to abolish it. However, although the market is still low and there are serious problems, there are also some positive signs. The figures for housing starts and completions in May were up by 4 per cent. and 1 per cent. respectively. Many building society predictions show substantial increases in the turnover of property transactions as well as prices in the remainder of this year.

9.45 pm

The hon. Member for Darlington (Mr. Milburn) accused us of a cynical political ploy. It would have been a cynical political ploy if the Chancellor had announced the abolition or the substantial raising of thresholds permanently, won the election and then reneged on that.

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