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6.45 pm
A target date of 1 September 2003 aims to strike a balance between the urgent need to tackle avoidance and allowing sufficient time for taxpayers and their agents, including solicitors and other conveyancers, to make the necessary preparations. Deferral would merely ensure that the existing unfairness endures for another year—good for avoiders, but bad for everybody else. I therefore urge the House to reject amendment No. 11.
Amendments Nos. 15 to 18 seek to restrict the power of the Treasury to make regulations to amend or to repeal enactments relating to stamp duty and stamp duty reserve tax following from the abolition of stamp duty, other than on instruments relating to stock or marketable securities and certain partnership transactions. They would also make the regulations subject to an affirmative resolution of the House. That is undesirable, because limiting the scope of the regulations in that way would prevent the making of regulations that ensure that stamp duty and stamp duty reserve tax on shares work properly together.
Moreover, amendment No. 18 would lead to uncertainty over whether regulations that are in place have full effect. I fear that that would create the danger—to which the hon. Member for Torridge and West Devon (Mr. Burnett) will be acutely alert—of lacunae arising. That of course would never do, so I hope to see the hon. Gentleman in the Lobby with us on this group of amendments, if nothing else.
Mr. Burnett: Will the Chief Secretary acknowledge that one of the many lacunae in the stamp duty provisions is the fact that there is a continuing raft of legislation? He has even offered to reconsider lease duty. When will it stop? When will we know exactly what are the Bill's provisions on stamp duty?
Mr. Boateng: I am very fond of the hon. Gentleman, but he really must avoid falling like so many of his Liberal Democrat colleagues into the trap of wanting it each and every way: they want the best of all possible worlds—to have their cake and eat it. Realistically, he cannot take us to task for not consulting enough, then, when we do consult and say that we are open to making new proposals—if they meet our objectives—in the light of those consultations, complain about a lack of certainty. That is unfair. The hon. Gentleman is a fair-minded man, so for him to take us to task for being open and consultative is uncharacteristically unreasonable.
Mr. Burnett: I am extremely grateful to the Chief Secretary—or should I call him the chief? Hail to the chief. My point is that we do not want continuing stamp duty land tax legislation for perhaps another six months without proper scrutiny or a proper opportunity for this House to debate it in detail. That is what disturbs us.
Mr. Boateng: I hear the hon. Gentleman, who makes his point in his usual way. However, that argument would not lead us to abandon our commitment to consultation and the careful consideration of alternatives—nor does it make the amendments any more acceptable. The purpose of regulations under schedule 20 is to enable stamp duty legislation to be repealed when it is no longer needed and to ensure that the current effect of the legislation is preserved for stock and marketable securities. Regulations will not be made under schedule 20 to increase the scope of stamp duty or the rate at which it is payable. I hope that that will be of some comfort to the hon. Member for Torridge and West Devon. There is no need to make regulations subject to affirmative resolution. I hope that, on the basis of that assurance, hon. Members will not try to divide the House.
Hon. Members are anxious to hear from the hon. Member for Hertford and Stortford, so I shall deal with the Government amendments expeditiously. They fulfil the commitments that I made in Committee and clarify other aspects about which we have received representations. Some—for example, those on appeal procedures—are essentially technical. However, most make substantive changes, for example, on the rules for sub-sales, to meet genuine concerns that were shared by all members of the Committee. I should like to take the opportunity to thank all those inside and outside the
House who have engaged in constructive dialogue and continue to do so. We had some good sittings in Committee, and they have led to improvements to the measure.Amendments No. 96 and 97 cover issues that relate to the transition from stamp duty to stamp duty land tax. Amendment No. 96 ensures that there is no charge on anyone who substantially fulfils a contract before Royal Assent. That deals with anxieties that such a charge could be perceived as retrospective. Amendment No. 97 preserves the current practice whereby an agreement for a lease can be presented for stamping at the same time as the exit duty lease without incurring interest or penalties. Amendments Nos. 53 to 56 deal with the treatment of sub-sales and other circumstances in which the purchaser's rights under a contract are transferred to a third party.
Clause 45 as drafted would impose a charge on a contracting purchaser, whether or not he completed, at the latest when the ultimate purchaser completed. Hon. Members know that we debated the issue at length in Committee. There was particular concern that there might be a charge on contracting purchasers who do not complete or, indeed, substantially fulfil the contract. I gave an assurance that it was not our intention that such purchasers should be subject to a charge. The amendments would give effect to that assurance.
Contracting purchasers will not be charged stamp duty land tax solely as a result of completion or substantial performance by the ultimate purchaser. On the other hand, a contracting purchaser who substantially performs, for example, by going into possession, will be charged stamp duty land tax. That charge is fair and creates a level playing field for different classes of taxpayer, but we are anxious to know about specific transactions that might operate unfairly. Hon. Members, as well as the professional associations and others, will doubtless have views to express if such instances arise.
Amendments Nos. 57 to 59 and 81 amend clause 58 and make consequential amendments to other clauses. The clause allows relief for the acquisition of an existing dwelling by a house builder when a new dwelling is being given in exchange for the existing one. The amendments fulfil the commitment that I made in Committee to extend the relief to cases in which the house that the builder acquires is worth more than the new dwelling and the householder is downsizing. Members of the Committee will remember our specific concerns about senior citizens who try to downsize in preparation for their old age.
Mr. Stephen O'Brien: Thank us.
Mr. Boateng: I certainly thank Opposition Members for their contribution to a constructive debate in Committee.
Amendments Nos. 70, 78, 79, 143 and 144 make the necessary adjustments to ensure that stamp duty land tax works in the context of Scots law and conveyancing practice. I am grateful to my hon. Friend the Member for Glasgow, Maryhill (Ann McKechin) for her contribution to that debate.
Amendments Nos. 60 to 67 and 84 to 86 cover our commitment to ensuring that the Bill covers the relevant Welsh institutions and planning institutions. The hon. Member for East Carmarthen and Dinefwr (Adam Price) made an important contribution to our deliberations on those matters in Committee.
Amendment No. 68 replaces a reference to an obsolete Act, in relation to which we had some fun in Committee. Amendments Nos. 69 and 71 widen the definition of financial institutions to allow for the wider development of alternative property financing arrangements such as Islamic mortgage products. Many inside and outside the House welcomed that.
Amendment No. 72 clarifies the circumstances in which purchasers need to self-certify when they register land with land registries. Amendments Nos. 73 to 76 deal with applications for deferred payments, clarify the way in which tax is calculated and ensure that there are sufficient powers to provide for appeals, returns and postponements. Amendments Nos. 77, 87 and 95 ensure that the appeals regime for stamp duty land tax is in line with that for other taxes.
Amendment No. 80 covers instruments that will remain within the remit of stamp duty rather than being subject to stamp duty land tax after the tax has been implemented. Those instruments give effect to contracts that are entered into on or before the date of Royal Assent, provided that the contract is not varied or assigned after Royal Assent. Anxiety has been expressed that instruments that complete such contracts would not be within the remit of existing stamp duty and thus might escape charge altogether. That was never the Government's intention. The amendment puts it beyond doubt that instruments that complete such contracts remain within the remit of the stamp duty charge.
Amendments Nos. 82 and 83 make technical changes to schedule 7, which deals with group relief, in line with the commitments that I made in Committee. I commend all the amendments to the House.
Mr. Prisk: I draw hon. Members' attention to my entry in the Register of Members' Interests. I thank the Chief Secretary for his remarks. I am not sure that they did not neatly erase some parts of the debate in Committee, but the process was positive and I thank him for his opening comments.
Before considering the amendments that we tabled, I should like to consider new clause 10 and the 45 other Government amendments. The fact that the Government have to make 46 changes to a single aspect of the measure at this late stage shows the shoddy handling of their proposals for a new land tax.
I welcome the Government's action in new clause 10 and their belated recognition of an omission. It is a shame that the action had to be rushed at the last minute, but the change is nevertheless welcome. However, I have two concerns and I hope that the Chief Secretary will be able to deal with them in his reply.
As the right hon. Gentleman said, new clause 10 relates to registered social landlords and subsection (1)(e) sets out one of the five conditions in which the new clause operates. It states that as a condition,
- "the landlord's interest has at any time before 26th June 2003 been held by a registered social landlord."
I also wish to draw hon. Members' attention to subsection (3). It states that the commissioners shall pay to each person
- "as they consider appropriate an amount equal to the duty . . . so charged."
- "Entitlement to a payment under subsection (3) is subject to compliance with such conditions as the Commissioners may determine".
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