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The Temporary Chairman: Order. The hon. Gentleman is straying rather wide of the amendment.
Mr. Leslie: Thank you for the prompt, Mr. Butterfill. I was merely trying to prove that, if the amendment is carried, the revenue that would be lost would make it impossible to pay for the increase in child benefit, for example. We know from experience that, when the Conservatives oppose revenue yield measures, they want to cut welfare.
Mr. Jack: Why does the hon. Gentleman favour raising--particularly from business--additional revenue by raising stamp duty?
Mr. Leslie: I think that stamp duty is a very progressive way of raising revenue. It is a fair tax, in that those with significant assets pay proportionately more. A strong principle underlies that philosophy of progressive taxation.
Mr. Geraint Davies: Unfortunately, I had to leave the Chamber briefly, so I may have missed something. Have the Opposition given us any idea how much the amendment would cost when combined with the earlier amendments, which would have cost billions of pounds, and the abolition of the fuel duty escalator, which we discussed yesterday? How much would it cost in terms of value added tax on domestic fuel, cutting services and so on?
Mr. Leslie: An Adjournment debate may well be called for. The country will be clamouring to know just how the Conservatives intend to fill the black hole that would result from the passing of amendment No. 3. Where will the money come from to pay for vital public services?
Mr. Gibb: Are not Labour Members merely reciting a list of stealth tax rises implemented by their Government? Are they not doing our job for us?
Mr. Leslie: It is possible to view the situation from the perspective of a responsible Government who are seeking
to pay for vital public services. If we could not raise revenue, we would not be able to spend it on schools and hospitals. I thought that the right hon. Member for Hitchin and Harpenden was saying that the Conservatives wanted an extra £40 billion for schools and hospitals, but they clearly do not. Amendment No. 3 would chip away at the money that they would have to spend on those vital public services.
I know that the Conservatives are in turmoil this evening, and I realise that the Leader of the Opposition is making a very important speech that is essential to the future of the Conservative party, but I think that we should sort out how the Conservatives are to secure the revenue base of the nation's finances before we can ever expect the return of a Conservative Administration.
There are other reasons why I think that the stamp duty changes are worth not only considering but supporting, not least because of the current state of the property market across the United Kingdom, and the increased property values that have been reported in recent weeks in very many studies and newspapers. We should focus on the stamp duty's regulating effect in preventing a return to boom and bust in the property market, in attaining market stability and in capping the large speculative exchanges that were symptomatic of the 1980s. The Chancellor, in proposing the measure, has taken early action to prevent a worse fate later. The stamp duty changes will help to prevent that fate.
The hon. Member for Guildford also made the interesting point that stamp duty rates are so much lower across Europe, and that the United Kingdom Government are imposing a very heavy burden.
Mr. St. Aubyn:
I know that this is a very difficult subject for the hon. Gentleman, but I was referring to the total of taxes on property, of which stamp duty is a part. The total tax take on property is much higher in the United Kingdom than in the rest of Europe.
Mr. Leslie:
I am grateful for that implicit recognition of the fact that the United Kingdom stamp duty rate is very competitive. Compared with stamp duty rates of 9 per cent. in Ireland, 8 per cent. in Italy and 6 per cent. in Spain, we have a very competitive rate, of which we have much to be proud. We have a prudent Chancellor who proposed in his Budget only a minor change--a mere 0.5 per cent. increase--in the stamp duty rate. The context in which the decision was made included the factors that I have described, and the need to keep an eye on the United Kingdom's economic stability and to be prudent with its finances.
The debate has highlighted the contrast between the Government, who are concerned with achieving stability in the property market and securing the tax base, and Conservative Members, who clearly stand only for the few and not the many. I believe that the measure should be supported, and that amendment No. 3 should be thrown out.
Sir Peter Lloyd (Fareham):
It is very interesting to follow the speech of the hon. Member for Shipley (Mr. Leslie). However, I should correct him on one or two of the assumptions that he made about Conservative
Sir Peter Lloyd:
If the hon. Gentleman will tell me that he knows that, I shall happily give way.
Mr. Leslie:
I hope that the right hon. Gentleman will welcome the reduction in the corporation tax rate and the imposition of a new, lower 10p starting rate of corporation tax.
Sir Peter Lloyd:
I certainly applaud reduction in corporation tax, but am not so impressed with the 10p rate, which I should have preferred to be wrapped up in the lower standard tax rate--so that the tax threshold started later, and some more small companies would not have to pay any tax. I think that that would be a much better use of the time of the Inland Revenue and of Customs and Excise and much better for small businesses. The rate that the hon. Gentleman mentioned is really rather gimmicky, as is so much of the Budget. However, I should return to the amendment, to which I know that the Chairman would like me to speak.
Today will be the third time that the Government have raised stamp duty. It went up in 1997, again in 1998, and will undoubtedly go up again today, when the Government's large majority moves through the Lobby. I can appreciate why the Government have followed this course--they want the money, and there are plenty of good things on which Governments spend money. Although I do not always agree with the Government's spending choices, I do understand why they try to maximise the revenue that they take.
Increasing stamp duty is a way of raising extra money that the general public do not notice. It does not affect most people directly and they will not connect it with the malign impact that it may have further down the line. They certainly do not make the connection in the constituency of the hon. Member for Halton (Mr. Twigg) and I doubt whether many people do in my constituency. They have other more immediate worries. Nevertheless, it will have an effect that should concern us on behalf of our constituents.
Stamp duty on commercial property is such a soft option in respect of the average voter--and some hon. Members--that, no doubt, the Government will find it impossible to resist the temptation to raise it still higher in future years, not just because it is easy, but because the Government intend to join the economic and monetary union. One way of hastening harmonisation would be to increase stamp duty to the higher average of continental countries with the minimum fuss. If that is their objective, the Government should remember, as some of my hon. Friends have reminded us this evening, that, although stamp duty or its equivalent is generally higher in Europe than it is here, that is not the case in all EU countries.
So, unless the Government accept that tax harmonisation must be at the highest rates, they should be careful about imposing increases.
Even more to the point, as my hon. Friend the Member for Guildford (Mr. St. Aubyn) pointed out a couple of times and again in an intervention, taxes on property are much higher in the UK than they are in the rest of the EU. If the Government seek a level playing field with Europe, they should cut total taxes on property instead of raising them.
I hope that, in her reply to the debate, the Minister will confirm that she recognises that property taxes are higher in the UK and let us know whether the Government intend to call a halt to increases in future years. I do not expect her to do so as a personal favour or in the cause of cross-party co-operation. Of course I realise that Governments can save themselves a great deal of trouble if they keep open as many options as possible. However, I am allowing myself a little hope because I assume that the Minister will want to observe the requirements of the Government's code of fiscal stability, which was also mentioned by my hon. Friend the Member for Guildford.
The code commits the Government to operating fiscal policy in a way that is predictable and consistent with high and stable levels of growth and employment. I know that the Minister can talk and listen at the same time, although not all her colleagues can do that. Will she make clear, in the spirit of the code, what the Government's medium-term intentions are in respect of stamp duty? Whether or not she tells us, I fear that the effect of increasing stamp duty will distort that part of the economy.
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