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House of Commons

Wednesday 17 April 2013

The House met at half-past Two o’clock

Prayers

[Mr Speaker in the Chair]

Co-operative Schools

Motion for leave to bring in a Bill (Standing Order No. 23)

2.34 pm

Meg Munn (Sheffield, Heeley) (Lab/Co-op): I beg to move,

That leave be given to bring in a Bill to enable schools to register as Industrial Provident Societies; to amend the Education Act 2006 to enable nursery schools to be established as school trusts; and for connected purposes.

The Department for Education’s vision, which is shared on both sides of the House, is for a highly educated society in which opportunity is more equal for children and young people, no matter what their background or family circumstances. I am presenting a Bill to take forward that vision, and part of that is about a society that values self-help, self-responsibility, democracy, equality, equity and solidarity. These are the values of the co-operative movement and the Co-operative party, which I am proud to represent in Parliament, and of the Schools Co-operative Society, which is the co-ordinating body of co-operative schools.

Those values are also evident in co-operative trust schools, where everyone—teachers, parents, pupils and the local community—work together for their mutual benefit. Performance improves, pupils learn and are more engaged in the life of the school, and the best possible environment for young people to learn and develop is created. Everyone is encouraged to take responsibility for themselves, while the local community has a say in how the school is run. With a commitment to equality and equity, everyone is helped to be the best they can.

In 2008, Reddish Vale technology school in Stockport became the first co-operative trust school in England. Working with the co-operative college, it developed a co-operative model for foundation schools with a trust, following the enactment of the Education and Inspections Act 2006. In 2008, the Prime Minister, then Leader of the Opposition, spoke of the desire to see a

“new generation of cooperative schools...funded by the taxpayer but owned by parents and the local community.”

There is no sign, however, that this has been attempted. Academies have become the centrepiece of education policy. Nor has the free schools policy led to a new generation of parent-owned co-operatives. To date, just one of the free schools is expected to operate as a co-operative. Much is said about choice in education, but if this is to become a reality, we need to allow co-operative school trusts to flourish and remove the hurdles that make that difficult.

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At the moment, the legal forms of co-operatives are determined as industrial and provident societies, or co-operative or community benefit societies, and there is no provision in the relevant Acts for co-operative schools. They have to work around the existing legislation in a clumsy and confusing way. Clause 1 of my very short Bill would therefore seek to amend Education Acts to include those legal forms and so ensure a level playing field with other school structures.

Despite the legal difficulties, in just five years, co-operative schools have become the third-largest grouping within the English education system, with currently more than 450 operating. Thirty have become co-operative converter academies, a few are co-operative sponsor academies and we have seen the creation of the first co-operative multi-academy trust. Those that have led the process are confident that growth will continue. So far, numbers have doubled every year, and with many more schools adopting this model, we can expect more than 1,000 schools to be using co-operative models by the time of the next general election.

The Co-operative college provides an effective support system, and the Schools Co-operative Society has been established as the national network of co-operative schools in England. Through the extensive network they have built, co-operative schools have access to mutual and targeted support to achieve the highest standards. They have developed a distinct model that enables schools to embed co-operative values into the ethos of the school. This also includes ethical values in keeping with those of the founders of the co-operative movement—openness, honesty, social responsibility and caring for others.

In Cornwall, a group of schools have joined together to protect their sense of community. The head teachers from Sir James Smith’s school, Helston community college and Upton Cross primary school have all spoken about the importance of solidarity and letting local people work towards a shared vision and mutual solutions in education. The newly formed Multi-Academy Trust in Barnsley works with three other schools and, through the establishment of the Pioneer Academies Co-operative Trust, has ensured that the community is at the heart of all it does. Lipson community college in Plymouth was an early co-operative trust school and is now a co-operative academy. Its arrangements for involving parents—Parent Voice—was recognised as outstanding in an Ofsted survey on parental and community engagement. Student Voice at da Vinci college in Derby gives pupils a real role in school decisions, allowing them to sit in on interview panels and join the staff on training sessions.

As the Secretary of State for Education has recognised, when extending the academies programme to primary schools, it is vital that children get the best foundation at primary level to realise their potential at secondary level. I agree, and I think we also need to get it right at nursery level. Many co-operative networks and co-operative trusts are based on strong geographical clusters. They wish to raise achievement by supporting young people from nursery to school-leaving age, yet the Education and Inspections Act 2006 prevents nurseries from setting up as school trusts. Nursery schools are in many ways the most naturally co-operative part of the education sector, with their engagement with parents and carers. Enabling nursery schools to become full members of trusts would strengthen that engagement in early years

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and help to develop the nursery-to-secondary vision of education that best enables young people to realise their potential. Consequently, clause 2 of my Bill would remove the relevant provisions in the 2006 Act and would enable nursery schools to be established as school trusts.

I believe that co-operative schools are well placed not only to ensure high standards of education, but to teach children that the values of co-operation have a great deal to offer. Pooling resources across schools is something to be welcomed at a time of austerity, but doing so at any time ensures a productive, collaborative approach and the most effective use of resources. For young people, the experience of supporting each other in school, along with seeing the support that the community and other co-operatives give, helps to shape character and inculcate a positive approach towards others. There is evidence that young people brought up in that environment continue to contribute to their communities long after they have left school. In the words of Pat McGovern, head teacher at Helston community college,

“The last thing the people of Cornwall want is to see a big education chain coming in to run school services and take money out of the area…Our co-operative is about a mutual solution to local needs.”

The education system should always be based on support, collaboration and co-operation at every level.

Question put and agreed to.

Ordered,

That Meg Munn, Mike Gapes, Mrs Louise Ellman, Mr Andrew Love, Meg Hillier, Mr Steve Reed, Seema Malhotra, Mr Barry Sheerman, Mr Gareth Thomas, Dan Rogerson and Andy Sawford present the Bill.

Meg Munn accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 26 April, and to be printed (Bill 160).

Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op): On a point of order, Mr Speaker. My hon. Friend the Member for Cardiff West (Kevin Brennan) and I would be interested to know whether you had notice of a statement from the Minister for Sport on the remarkable news that was confirmed last night that, as of next season, as a result of Cardiff City’s promotion to the premier league last night, 10% of the clubs in the English premier league will in fact be Welsh.

Mr Speaker: I have received no notification of any such ministerial statement, but the statement, albeit one not of an official character and not by a Minister, has just been delivered by the hon. Gentleman.

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Finance (No. 2) Bill

(Clauses 1, 3, 16, 183, 184 and 200 to 212, Schedules 3 and 41, and certain new Clauses and new Schedules)

[1st Allocated Day]

Considered in Committee

[Mr Lindsay Hoyle in the Chair]

New Clause 1

Government housing market support (second homes)

‘HM Government shall provide a report to Parliament within three months of the passing of this Act on the availability of government housing market support as part of the tax system to those seeking to purchase a second home and plans to prevent this.’.—(Chris Leslie.)

Brought up, and read the First time.

2.46 pm

Chris Leslie (Nottingham East) (Lab/Co-op): I beg to move, That the clause be read a Second time.

The Chairman of Ways and Means (Mr Lindsay Hoyle): With this it will be convenient to discuss new clause 5 —Mansion tax

‘The Chancellor shall review the possibility of bringing forward a mansion tax on properties worth over £2 million and publish a report, within six months of the passing of this Act, on how the revenue could be used to fund a tax cut for millions of people on middle and low incomes as part of a fair tax system.’.

Chris Leslie: This first group of new clauses to this year’s Finance (No. 2) Bill relates broadly to issues of housing policy. Sadly, new clause 6, which urged the Chancellor to focus on the availability of affordable housing particularly in the wake of the bedroom tax, has not been selected for debate. My hon. Friends will be delighted to know, however, that new clause 5 seeks the support of Parliament for a review of a mansion tax on properties worth over £2 million and the earmarking of revenues for a tax cut for low and middle-income households.

Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): My hon. Friend has just referred to the bedroom tax, and we all know that this has huge implications for the future finance of our country. Does he think that those implications are reflected in the Bill?

The Chairman of Ways and Means: Order. Much as that issue might be in Members’ minds, we are unfortunately not going to discuss it. I allowed a little bit of sailing earlier in the opening comments, but we must now deal with what is on the Order Paper.

Chris Leslie: You are of course entirely correct, Mr Hoyle, as we are debating new clauses 1 and 5. New clause 1, however, talks about the Government’s approach to the housing market more broadly and, in the context of taxpayer support for the housing market, it would be remiss of any hon. Member not to recognise the volatility

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created by consequential changes in other areas of departmental policy, particularly those of the Department for Work and Pensions, as they affect the availability of housing supply. After all, in most of our constituencies and particularly the least well-off ones across the country, there is a sense of foreboding about the potential displacement of many constituents who are being told that they should look for other housing market options when it is, in fact, quite clear that there are no suitable social housing options to fit the circumstances of nine out of 10 of them. You are completely correct, Mr Hoyle, about the nature of new clause 1.

Jack Dromey (Birmingham, Erdington) (Lab): On that point and before my hon. Friend moves on, does he agree that the impact of the totality of the welfare changes, including universal credit and the factoring in of housing associations’ bad debts, will have a very serious impact on housing supply—including with respect to the recent profoundly disturbing calculation by the G15 group of housing associations in London that as a consequence of the Government’s welfare reforms, they will build 1,200 fewer badly needed affordable homes next year?

Chris Leslie: Very few people—

The Chairman of Ways and Means: Order. We need to stick to where we are. I know that Members are being tempted, but much as we might like to go down that route, I know that we are not going to do so.

Chris Leslie: New clause 1 talks about the way in which the Government’s approach may target help on those who want to buy a second home. In tabling new clause, we were concerned that we should prioritise those who need their first home—a primary residence. That is an important part of our argument in new clause 1.

Susan Elan Jones (Clwyd South) (Lab) rose—

Chris Leslie: No one knows more about housing issues than my hon. Friend the Member for Birmingham, Erdington (Jack Dromey)—with, perhaps, the exception of my hon. Friend, the Member for Clwyd South (Susan Elan Jones), to whom I am happy to give way.

Susan Elan Jones: I am sure that I do not know more than the first-named hon. Friend.

Does my hon. Friend think that what could effectively become a holiday-home subsidy will end up having a disproportionate effect in rural communities? We know what has happened in north and west Wales in the past, but could not the same apply to the Lake District, Cornwall and other rural areas? Will my hon. Friend be asking the Minister whether any impact assessment has been carried out in relation to the potential cost of rural housing? This move is an absolute disgrace.

Chris Leslie: My hon. Friend ought to know by now that this particular Treasury does not go in for assessments based on evidence. In fact, we are lucky that there was a fag packet on which the Chancellor could draw up his plan.

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My hon. Friend needs to recognise that the Budget was not designed to deal with the needs of the economy, the housing market or the rural communities to which she has referred. It was designed entirely to save the Chancellor’s skin, and to support his ideological approach and the extreme austerity agenda that he has been pursuing. Because he had been failing on the deficit and borrowing, he decided to design a housing market intervention that fell below the line—that added up in terms of national debt, but did not affect his borrowing figures. The convoluted scheme that he created may have a series of perverse consequences, because it was not designed to meet the needs of housing or of the communities that we represent. It was designed merely for the Chancellor’s own convenience, in the light of his disappearing and diminishing personal prospects.

We all know, or at least Labour Members know, that housing is the bedrock of a stable community, strong families and economic progress, and that the adequacy of housing availability is crucial to our economic recovery. There should be a cross-party consensus on the need to help families to get a foot on the housing ladder and helping people to fulfil their aspirations and provide a decent foundation for the future. However, despite the warm words about housing that we have heard for the past three years, the Government’s record is poor, and the housing investment measures in this Budget—like those in previous Budgets—fall well short of what is needed and what Labour Members would advocate. What hope can there be for hard-working families who are struggling to get on to the housing ladder, given the current mismatch between supply and demand? House building has fallen, rents are rising, home ownership is becoming harder rather than easier so that the goal for young families is becoming less and less achievable, and homelessness has risen.

Andy Sawford (Corby) (Lab/Co-op): I agree with my hon. Friend’s assessment of the likelihood that the Government’s latest measures in the Bill will significantly improve people’s opportunities to buy their own homes or gain access to housing on the rental market. Are we right to take account of the Government’s track record over those three years when making such an assessment, and am I right in thinking that the Government have announced 300 housing measures which have caused the situation to become worse rather than better?

Chris Leslie: It could almost be said that there have been more announcements than new homes constructed under the present Administration. Let us consider a few of the schemes that they have announced.

My hon. Friend will recall the new homes bonus, which was part of the Government’s so-called localism agenda, because he and I have spent some time examining that particular set of policy options. The scheme, which the Government announced in 2010, was supposed to unleash growth and build at least 400,000 additional homes, but it has totally failed to deliver. The number of housing starts fell by 11% last year, to below 100,000—less than half the number required to meet housing need.

Andrew Gwynne (Denton and Reddish) (Lab): How confident can we be that this new initiative will be any more successful than the others that my hon. Friend is beginning to outline? He will remember, as we do, the

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NewBuy scheme, which the Prime Minister promised would make 100,000 new properties available to people. In fact, only 1,500 people have secured new properties as a result of that initiative.

Chris Leslie: My hon. Friend has hit the nail on the head. Imagine announcing such a scheme, and then delivering only 1.5% of the goal that the Government set out so confidently at the inception of that project, which has clearly failed. We want to see the careful and detailed thought, piloting, workings and evidence that the Government have put into this latest venture.

Mr Stewart Jackson (Peterborough) (Con) rose—

Chris Leslie: I am sure that the hon. Gentleman is now going to assure us that all that careful and thorough work has been done.

Mr Jackson: The hon. Gentleman is being most generous in giving way. We would take his critique a little more seriously, had not his Government’s regional spatial strategy delivered the lowest number of homes since 1923, doubled the number of homeless families and built 117,000 homes on flood plains between 1997 and 2005. Is that not the reality of the Government he supported between 1997 and 2010?

Chris Leslie: Setting aside the fact that there is probably the lowest number of Conservative MPs here in the Chamber today since 1923, they do not have room to criticise any previous Government on these issues, let alone the last Labour Government. We believe that there is a crying need for housing, which is one of the crucial foundations for future economic prosperity. It is about time Government Members recognised that they have had three years in power, and have their own record to defend. They have to take some responsibility for the decisions they have been supporting.

I do not know whether my hon. Friends recall the infrastructure guarantee scheme, a key feature of the summer before last. It was part of the Government’s emergency legislation, and they rushed it through Parliament. It was supposed to enable guarantees to underpin £40 billion of investment in infrastructure and £10 billion-worth of new homes, including 15,000 new affordable homes. However, so far as I can see—I am sure the Minister will intervene if I am wrong—not a single tangible penny of support from that scheme has been allocated for house building. I am happy to give way to the Minister if he wants to correct me.

Andy Sawford: Will my hon. Friend give way?

Chris Leslie: I am just waiting to see whether the Minister wants to intervene. [Interruption.] It seems that he does not, so I give way to my hon. Friend.

Andy Sawford: My hon. Friend questions the confidence we can have in voting on the measures in the Finance Bill, given the Government’s performance in the last three years, and rightly mentions their infrastructure guarantee scheme. According to my assessment, they have begun 15% of the 576 projects in the national infrastructure plan, so we have no reason to have any confidence in the measures in the Bill.

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Chris Leslie: I know that the Minister pursues his duty to this House with great diligence and that, in responding to the debate, he will want to update us in detail on the number of extra houses that have been forthcoming as a result of the vital emergency legislation that the Government put through. It would be extremely helpful if he did so. However, it is clear to us that the overwhelming barrier for the housing market to overcome has been the 60% cut in the affordable housing budget made in the 2010 spending review, and of course, matters have been made worse by the subsequent lack of growth in the economy. It is therefore no wonder that the Chancellor felt the need to reboot his various schemes back in March. That is why we come now to the Government’s Help to Buy scheme, the detail of which I want to spend a little time considering.

Mr Stewart Jackson: I pay tribute to the Minister, who does indeed know what he is talking about, having been, like me, a member of the board of management of the New Local Government Network. If there is a Labour Government within the next year or so, will the hon. Gentleman abolish the affordable rent model and put funding directly back into social rent—yes or no?

Chris Leslie: I will come to some of those details because I think it important that we look at the contrasting policy options for housing support. My hon. Friend the Member for Birmingham, Erdington has been developing our plans for house building and housing supply in a number of different ways, and I will touch on those, if I may, after having looked at the Government’s approach: the Help to Buy scheme, which consists of two parts, the first being an equity loan element. The Government have said that they want to extend what was known as the First Buy scheme—there are so many names that it is sometimes difficult to keep track—whereby people would purchase new build homes up to a value of £600,000 and could borrow 20% of the value of the property interest free for five years in return for the Government taking a stake in the equity. The fee for that would increase annually, but only in line with inflation, so the Government are essentially committing, they say, up to £3.5 billion over the next three years to this shared equity loan scheme.

3 pm

The Government say that they want to target 74,000 more home buyers. The scheme has been available from the beginning of this month and we will see how it operates. It is still early days, but as far as I can see it has resulted in no massive change in the mortgage market in the past week or so. It is intriguing that the previous help was available only to first-time buyers with family incomes below £60,000. Now, the Government are saying that they want to make help available to all buyers of newly built homes on all incomes at that level. That is an intriguing change in Government policy. It is as though the First Buy scheme did not have enough to underpin it so, in a desperate move to try to reflate it, they have broadened it out. We will see how that goes.

The scheme is certainly a candidate for “Grand Designs”. Although the Opposition support in principle the notion of assistance for those who are looking to purchase a new home, we have questions about the operation of the design. After all, as hon. Members are often more

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fortunate than many of our constituents, we should probably all declare an interest as participants in the housing market and the mortgage market. It would also be wrong for us to imply that we do not encourage home ownership or that we are always against the notion of second home ownership, given that many of us have two residences, one near Westminster and one in our constituency. Notwithstanding the unusual circumstances of Members of Parliament, it is important that public policy and taxpayer support are focused first and foremost on assisting those without a home to acquire one and on ensuring that we minimise the diversion of taxpayer funds into an unintended subsidy for second homes when helping people with their first homes must be the priority.

Sheila Gilmore (Edinburgh East) (Lab): In many parts of the country, although perhaps not in London, the property value being suggested is extremely high. Instead of concentrating on people in the lower income bracket looking for property of lower value, the scheme will be open to people who arguably do not need help to get on to the housing ladder.

Chris Leslie: It comes down to whether the Government have designed the scheme adequately. Is it best to have a broad-brush approach, or should we be targeting help at those who need it most? The Opposition favour the latter.

Alison McGovern (Wirral South) (Lab): My hon. Friend has made an important point about the action the Government have already taken. Does he agree that their action has failed to work because of their mismanagement of the macro-economic system? In a world where people see food prices going up and do not have enough money in their pocket for a weekly shop, the idea that we can have a housing market that works well is not at all realistic.

Chris Leslie: The economic background is absolutely key. If we had seen a continuation of the recovery that was beginning to get under way back in 2010, we might have been in a different position. But no, the Government pulled the rug from under the confidence felt by consumers or businesses and in the housing market, too. We have seen a series of consequences as a result. Let us face it: the main problem, particularly for first-time home buyers, is the supply of housing and its cost.

Jack Dromey: On that point, was it not folly for the Government to cut £4 billion from affordable housing investment in 2010, leading to a 68% collapse in affordable house building? Would it not be more prudent now to endorse the shadow Chancellor’s proposal that the 4G moneys should be spent on building 100,000 affordable homes as much the quickest way of getting the housing market moving and, in turn, of getting our economy moving?

Chris Leslie: It is absolutely true. We have to face facts. We have to put direct support into housing supply. These rather opaque and indirect attempts to manipulate the public accounts with complicated and convoluted guarantees and underwriting arrangements do not communicate to the wider public who might be consumers

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of housing—looking to buy their first home or to rent differently. The Government must be far more direct about this approach.

It is clear that the Government’s ideological aversion to supporting the construction of affordable housing still inhibits recovery of the broader housing market. That is why housing starts fell 11% over the last year to 98,000 and why the number of private and local authority home starts was down, and the number of housing association home starts, at just over 19,000, was the lowest for eight years. There are 136,000 fewer home owners than when the Government came to power, and of course the youngest are hardest hit. Apparently, the average age of a first-time buyer is now 37.

We have doubts and questions about whether this Help to Buy scheme will work. Have the Government thought it through sufficiently? There are plenty of organisations focusing on housing policy. The first-time buyers pressure group PricedOut said that the Government should assist construction of more houses where there are chronic shortages. That is absolutely true. However, there is a point about whether help should no longer be targeted at lower and middle-income families, with the cap of £60,000, and used to support first-time buyers. We need from Ministers a thorough analysis of what is happening, particularly how many higher rate, or additional rate taxpayers will be taking advantage of the new scheme. What analysis have they made of that?

Mr David Hanson (Delyn) (Lab): May I add a further inconsistency to those that my hon. Friend has mentioned? Under the current scheme, a single person could buy a three-bedroom house with a taxpayer subsidy for the mortgage, yet at the same time a social tenant who is single and wants a three-bedroom house is being penalised.

Chris Leslie: Never let it be said that this Government have any consistency whatsoever, but perhaps that is where we should turn to the Liberal Democrats—or the Liberal Democrat as I will henceforth call the hon. Member for Bristol West (Stephen Williams).

There is another part of the Help to Buy scheme. We have talked about the equity loan aspect. The second part is the mortgage guarantee, supposedly designed to help individuals without a large deposit; they may have only 5% and are looking for a 95% mortgage from participating lenders. The Government say they will guarantee up to 15% of the mortgage in an attempt to encourage banks and building societies to offer loans to borrowers with small deposits.

Interestingly, the scheme is not starting in April; it will not start until January 2014. I hope Ministers can explain why they picked that date, because there is a potential risk of forestalling. We may have constituents who are wondering whether they should get on the housing ladder to help their family, or who are in the construction sector wanting to supply new homes. Is there not an incentive for many potential home purchasers to wait—to hold off and not enter the housing market until January next year? Paradoxically, further problems might emerge as a result of the scheme.

Mr John Redwood (Wokingham) (Con): Does the shadow Minister agree that since the crash of 2008 there has been a chronic shortage of mortgage finance and of new homes being built? Do we not need some way

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around the problem that RBS and HBOS are so damaged that they cannot supply the normal amount of mortgage credit?

Chris Leslie: The Opposition are not opposed to schemes that are well targeted and well designed to increase affordability for people who want to buy their own home, and we want people to get that first step on the housing ladder, but the way in which the Government are going about these things is shocking.

The funding for lending scheme has shown some signs of altering mortgage affordability at the margins, but it was predominantly designed to boost lending to small and medium-sized enterprises, and in that respect it has not worked at all. In fact, yesterday the Bank of England started talking about doing what the Chancellor should have done in his Budget and properly getting a grip on funding for lending—splitting the scheme in two, to ensure that it provides not only housing support, but particularly SME support.

Alison McGovern: The right hon. Member for Wokingham (Mr Redwood) alluded to a much larger debate that we have had in this place, about banking and banking regulation, but does not that entirely miss the point—that actually the Budget, and this Finance Bill, should be about resetting the recovery from that crash: not about the failure that is still there in the banks, but about the economic management of the country, which this Bill demonstrates above all the Chancellor has got wrong?

Chris Leslie: I do not think it is because the Chancellor does not realise, or is ignorant about the policy options available to him; it is a deliberate choice not to pull those particular levers, and we need to debate that in a wider context.

However, for the purpose of completing some analysis of the Help to Buy scheme, the specific question that we have anxieties about is whether the underwrite scheme will provide unintended support for those wishing to buy second homes—in other words the taxpayer, the hard-pressed taxpayer, subsidising an element of activity that really should not be a priority for the taxpayer at this moment. If people want to take equity out of their property or remortgage, they may do so using traditional solutions provided in the market at large; we have nothing against home owners remortgaging in the traditional way. But the scheme seeks to extend taxpayer guarantees unnecessarily. Effectively, Ministers are saying that if people have a spare room in a social home, they must pay the bedroom tax, but if they want a spare home and can afford it, the Government will help them to buy one. No wonder people are calling this the spare home subsidy.

Mr Andrew Love (Edmonton) (Lab/Co-op): When the Chancellor was asked to clarify whether help would be available to second home owners, he chose not to do so. Is it not incumbent on Ministers here today to tell the House very clearly whether the scheme can be used for the purchase of second homes?

Chris Leslie: It is absolutely incumbent on Ministers, but this is a Government who just cannot think things through properly. They have set off down the road with

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a particular design. We have been asking questions for weeks and weeks. My hon. Friends will remember that the Chief Secretary to the Treasury astonished the House when he still could not rule out that the scheme would be used for supporting second home purchase, and there might be a number of reasons for that. For example, if the scheme is supporting remortgages, and a household decides to remortgage, how can the Government have a covenant on how any equity withdrawn from that remortgage process will be used by that home purchaser? That is presumably the obstacle that Ministers are banging their heads against now, and they probably have to look at various covenants and all sorts of legal arrangements for those participating in the schemes.

There are other anomalies in the process. Perhaps the Minister would elaborate on this point: can foreign buyers be subsidised by the UK taxpayer for the purchase of second homes—not just other EU residents, but non-EU residents as well? What is the exclusion in the scheme? Will he clarify that?

Alison Seabeck (Plymouth, Moor View) (Lab): I declare an interest in the interests of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), as usual. Does my hon. Friend have concerns that although ostensibly the scheme may say that there can be no foreign investment, there will be means and mechanisms for foreign investors to set up companies in the UK in order to cover their tracks? Does he have any confidence that the Government are looking at whether there are potential loopholes?

3.15 pm

Chris Leslie: I live in hope that if not Ministers, the Minister’s officials will try to apply sticking plasters to bodge the thing together, but it is a real mess. Ministers need to go back to the drawing board and think more directly about the support that can be provided for affordable housing.

Mr Hanson: As I understand it, the scheme in question is administered by the Department for Communities and Local Government, so it might even be possible for a resident of, say, Chester to buy a second home in Wales under the scheme; for a resident of Berwick to buy a second home in Edinburgh; or for a resident of Liverpool to buy one in Belfast. Has that been thought through by the Government?

Chris Leslie: I doubt that very much. I know that will shock my hon. Friends, but I suspect the Government have not thought about that.

Susan Elan Jones: We hear a great deal about Mr Lynton Crosby and his influence on the Conservative party. He is probably rubbing his hands with glee today, thinking, “Goodness, they haven’t worked out the fact that this is a tax break for me when I buy my second home,” if he does not already have one.

Chris Leslie: It had not occurred to me that the scheme could be the entrée for Lynton Crosby into a permanent residence. Who knows whether he will take up the scheme, but I am sure he will be very inventive about the matter.

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Mr Love: Normally, when Ministers are silent, one can trust the Treasury to clarify matters. In this case the Treasury has not clarified matters. I read in the newspapers that buy-to-let investors will be excluded, but in other newspapers there seems to be ambiguity about that. Can we not have a clear statement from Ministers this afternoon about who is in and who is out of the scheme?

Chris Leslie: In, out, in, out, shake it all about—who knows what is going on in the minds of Treasury Ministers? It is impossible to tell, sometimes, just by looking at them.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): Further to the intervention from my right hon. Friend the Member for Delyn (Mr Hanson), the scheme could have an important impact on the devolved Administrations. Perhaps in the course of the afternoon the Minister could get a message from the civil servants to help him on that. I understood that although the Help to Buy scheme applied only to England, the mortgage guarantee scheme applied certainly throughout Great Britain, and probably throughout the entire UK. That needs to be clarified. Constituents have already asked me about the scheme and whether they would be able to apply for it.

Chris Leslie: The Minister’s pen will run out of ink as a result of the number of specific questions about the scheme that he will have to reply to, but he is diligent and I know he will address them all. I would be grateful if he could confirm that he has thought through the consequences of the design of the scheme for the devolved Administrations. [Interruption.] His gaze has not lifted for the past 15 minutes or so.

I do not wish to take up too much more time, but there are other anomalies. For example, I think the Government have said that home owners will be able to remortgage, but they will not be able to remortgage with their own bank or building society; they have to go elsewhere. Ministers need to think that through a little more carefully. If there is a genuine case for remortgaging, are they, in effect, going to create a whole set of exit fees for those consumers to have to bear and a set of new application fees? What is wrong, in the circumstances of remortgaging, with someone continuing the relationship with their existing bank or building society?

We have a number of concerns about the Help to Buy scheme. Let us leave the last word on the matter to the Office for Budget Responsibility. What was its assessment when it looked at the scheme? What view did it take about the impact that it would have on the housing market? The OBR revised down its forecasts for property transactions, despite the two new schemes that have been announced. It says, I think on page 88 of its report, that

“we have reduced our forecast relative to December to a level which is more consistent with other outside forecasters.”

There we have it. For all the announcements, the spin and the press releases about the scheme, the Treasury could not convince the OBR, which is only just down the corridor from where Ministers reside.

Alison McGovern: Is not that particularly disappointing given that the Government have not exactly met the OBR’s forecasts to date?

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Chris Leslie: The OBR is still bedding in. It has had a difficult time because on every autumn statement and Budget it has had to downgrade and revise its forecasts, upgrading the forecast for the deficit along the way, so one has to feel slightly sorry for it. There were some signs that its chairman was keen to chastise the Prime Minister and the Chancellor for overstating what was happening to public finances, so we wish it well for the future.

New clause 5 concerns the introduction of a 10p starting rate of income tax, funded by a mansion tax on properties worth more than £2 million, a policy that used to be advocated by the Liberal Democrat—

Stephen Williams (Bristol West) (LD): It still is.

Chris Leslie: Apparently, it is still advocated by the Liberal Democrat, but Liberal Democrats tend to have a habit of voting against it whenever the opportunity presents itself. Those on low incomes have had their tax credits cut, their child benefit has been affected, and their wages and living standards have fallen, but millionaires on average benefit from a £100,000 tax cut. Surely it is time to help lower and middle-income households with an extra level of tax support, directed from revenues raised from a mansion tax on properties worth more than £2 million.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): As the hon. Gentleman will be aware, we had a Labour Opposition day debate on this issue before the Easter recess, following which the shadow Secretary of State for Wales said that productive agricultural land would not be included in estates for the purposes of the Labour party’s mansion tax proposal. Is that the case? Will farms be excluded or included in Labour’s proposed mansion tax?

Chris Leslie: We hoped that the Liberal Democrats’ plan relating to property values of £2 million was a well-worked-through basis on which we could build and develop a policy. We even tabled a suggestion that the OBR should have some options for how this mansion tax would work in detail. There are bound to be issues on the margins that need to be resolved, and I accept we should definitely be talking about those, but the principle could be established. The Bill has 50 or 60 clauses relating to what are known as enveloped dwellings. The Government do not dare call it a mansion tax because Conservatives do not like it, but they have introduced a scheme to enforce a certain number of stamp duty requirements where an annual charge can be placed on properties worth more than £2 million, but only if they are owned by a company in a corporate tax wrapper. It is therefore entirely feasible and plausible to consider whether that scheme could be extended into a mansion tax proper, and the Government have well-worked-through plans on the books, on which they have been consulting, which could be the basis for a mansion tax. This is not something that has not been thought through by the Government.

The Opposition believe that any revenues from this need to be given back to lower and middle-income households through a 10p starting rate of tax. When the economy is flatlining and tax rates are rising in so many other ways, particularly VAT, we must do more to

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help those 25 million basic rate taxpayers. It is incredibly important that we do that, and we will be giving this Liberal Democrat, and any others who happen to be in the building, the opportunity to express their views on it when we finish this debate. I commend new clauses 1 and 5 to the Committee.

Alison Seabeck: In speaking to new clause 1, I wish to pursue issues that have been touched on by my hon. Friend the Member for Nottingham East (Chris Leslie) and other Opposition Members and to highlight my concern that the Help to Buy scheme might well become a second home subsidy, rather than a scheme, as was intended, to help many first and second-time buyers on to the housing ladder.

In housing, as in so many other areas of policy, the Government have been found badly wanting. I remember the chutzpah the right hon. Member for Welwyn Hatfield (Grant Shapps) displayed on entering government, saying repeatedly that he would outperform the previous Labour Government when it came to house building and getting first-time buyers into the market. As Housing Minister, he failed rather magnificently. He seemed to ignore the fact that Labour built 210,000 new homes before the market crashed. We started to see an increase in the number of homes being built in the run-up to the 2010 general election as a direct result of measures taken by the Labour Government. Indeed, some of the homes that this Government have taken credit for building in 2011 are in fact the hangover from Labour’s new-build programme. We are now seeing a slump in house building.

Jack Dromey: The former Housing Minister claimed that the Government would build 170,000 affordable homes. The National Audit Office then produced a report stating that 70,000 of those homes had been commissioned and paid for by the previous Labour Government.

Alison Seabeck: My hon. Friend is right. I think we have to take the figures offered by the Government with a huge pinch of salt. Although I support any measure, as I am sure he would, to kick-start the housing market and enable young people, such as my daughter, to get on the housing ladder, I, like my Front-Bench colleagues, have serious concerns about the scheme.

Andy Sawford: My hon. Friend makes the point that we need to kick-start the housing market, and I think that all Labour Members agree. She talked about the chutzpah of the Government’s first Housing Minister, whom she challenged at the time, when she led for the Opposition. Is there not a contrast between the urgency of the measures that were rushed through Parliament when the coalition Government took office and the delay in the measures that they now say will make some kind of difference, which will take us through to January?

Alison Seabeck: My hon. Friend is right. There is a significant gap that will lead to a further trough in house building. It will certainly not lead to the boost that the Government expect as a result of introducing the scheme. Frankly, the scheme looks like another idea drawn up on the back of a cigarette packet, and we have

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seen too many of those. I think that this one, like others, whether in welfare, education or health, will have a number of unforeseen consequences.

Following the Budget, we now know that the Government’s mortgage scheme will not exclude people buying second homes. Although it might get some movement into the market, it will not solve the underlying problem and could well be abused. In areas such as the south-west, where we have a glut of second homes and where affordable homes are a rarity in some areas, introducing measures that could increase the opportunity for people to purchase second homes, as well as risking pushing up prices, is extremely dangerous. That could create severe price volatility in those areas and lead to the exact opposite of the intended outcome.

In Plymouth and the South Hams, we have the prospect of around 5,000 new homes in Sherford, all close to some of the most beautiful countryside and coast in the country. Many people will want to buy those homes, which opens the door to second home ownership. How many of those purchasers will want to buy to let? The Government say that they do not plan on the scheme being used by people who want to buy to let, but by using subterfuge it will be entirely possible for them to do exactly that. Will the Minister explain exactly what type of bureaucracy will need to be set up fully to ensure that the scheme is not abused by people who want to buy to let?

3.30 pm

Jack Dromey: Is my hon. Friend aware of anything in the Bill that would prevent Russian billionaires, Greek tax exiles or dubious Australian spin doctors from buying homes on the back of the scheme?

Alison Seabeck: That was wonderfully well put, as usual. No, I am aware of no such thing, and that bothers me hugely. It ought to worry Ministers; it will be interesting to hear what they have to say on the matter.

My constituents are struggling under the pressure of the spare room subsidy. They rightly want to know why it is fair for the Government potentially to offer a spare house subsidy of up to £600,000 to people who already have a home. That sum would buy a mansion in Plymouth.

Graham Jones (Hyndburn) (Lab): Startlingly, the previous scheme had a limit of £280,000. Why have the Government increased the ceiling to £600,000? Surely homes of £600,000 are not affordable.

Alison Seabeck: No, indeed. Someone looking at the issue from the outside, rather than from the Government Benches, could cynically suggest that the Government are seeking to build houses and support house building in the south-east rather than in the rest of the country. The figure has far more resonance in terms of trying to get people into the market in the south-east. The issue is not clear.

Sheila Gilmore: The figure might be more consistent with house prices in the south-east, but even there someone still has to have a very substantial income to afford a mortgage, even if it is discounted by a shared equity or mortgage guarantee scheme.

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Alison Seabeck: My hon. Friend is right and has flagged up yet another unfairness about what is proposed.

We have an example of the Government bearing down on the less well-off—those who are suffering because of the bedroom tax. Those people could probably never afford a mortgage, however desirable an ideal that might be. The Government are effectively expecting those people on low incomes to fund and support other people to buy new homes.

Jim Shannon (Strangford) (DUP): I thank the hon. Lady for being gracious enough to give way to everyone who has wanted to intervene. Does she feel that there should be an incentive for parents or grandparents who either have savings or could remortgage their homes to provide a deposit for their children or grandchildren? Could that not enable first-time buyers to get on to the ladder in their 20s rather than at 37, as was mentioned earlier?

Alison Seabeck: The hon. Gentleman makes an interesting point, and I will briefly touch on it later. I suspect that it could be possible for parents to buy for children.

People struggling to get a mortgage and those who want to own their first home must be a priority for help, not the small number of people who can afford to buy a second home. What checks will be introduced to prevent abuse of the scheme, so that people are prevented from applying in the names of their sons and daughters, cats and dogs?

The key fact is that not enough homes are being built. The Government must focus on that issue and on listening to the voices of those who understand the market. They should not simply dismiss out of hand the Opposition’s new clause, which would enable the public to have a better understanding of who benefits from the scheme. Is it foreign investors, parents buying second homes for their children or people seeking to rent the property in the long term?

What checks will be put in place if somebody applies to the scheme saying that they are not going to let the property, then sits on it for a time and subsequently opts to rent it out? Perhaps people could use the scheme for a straightforward holiday home purchase, as I mentioned in relation to Plymouth and the South Hams. Where are first-time buyers in the process? For me, they are singularly missing.

Mr Love: I am listening carefully to the case my hon. Friend is making. If we simply take measures to stimulate demand, without equivalent supply-based measures, are we not likely to end up with house price inflation, which will affect first-time buyers?

Alison Seabeck: My hon. Friend is right. He reinforces a point I made about not only the potential for price volatility but the inability of certain people to access the housing that is so desperately needed, and the clear need to build more homes, which this Government are singularly failing to do.

Jack Dromey: Does my hon. Friend agree with the hon. Member for Spelthorne (Kwasi Kwarteng), who said in a recent interview, commenting on the Government’s proposed scheme, that

“giving mortgages without increasing the supply will lead to asset price inflation”?

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Alison Seabeck: That is a very interesting comment, is it not? In quoting it, my hon. Friend makes the point very clearly.

House building is falling, rents are rising, home ownership is becoming a harder goal for young families to achieve, and homelessness has risen. That, frankly, is not a record to write home about. This Budget measure, first, needs to be fully explained; secondly, needs to be fully scrutinised, which is why the new clause is important; and thirdly, shows that the Government have got their priorities wrong, because they need to be building more homes.

Stephen Williams: Thank you for calling me, Mr Hoyle. I am being called rather sooner than I imagined; indeed, I did not even necessarily imagine that I would be making a speech in full detail, but making use of my House of Commons Library notes I have hastily prepared something, particularly on new clause 5, which is a welcome innovation in many ways.

Andy Sawford: As the hon. Gentleman is not quite prepared to speak at the moment, perhaps I could help to give him some material for his response to the new clauses. Will he enlighten us on whether the Liberal Democrats might take this opportunity to support us in pushing forward a mansion tax, given that they did not do so last time?

Stephen Williams: I am happy to enlighten the hon. Gentleman, whose intervention falls into the category of a nice try. I think he is referring to the Opposition motion on this issue that we debated five or so weeks ago. The Government amendment to that motion made it crystal clear that, in the context of the coalition, my Conservative Front-Bench colleagues do not support the introduction of a mansion tax in this Parliament; indeed, it is not in the coalition agreement because we could not agree on it at that point. However, the Liberal Democrat part of the coalition does believe that a mansion tax should be introduced. We are happy to do the workings on it and happy to espouse it at every opportunity. It will be in our manifesto at the next general election, and subject to what happens in that election, when I am sure that negotiations may well take place again, perhaps we will have a different outcome. I welcome the fact that the Labour party, which emphatically rejected the principle of a mansion tax in the negotiations in 2010, now seems to be on the way towards conversion to the long-term Liberal Democrat train of thought on this issue.

I also hope that Conservative coalition colleagues might have a conversion between now and 2015. Some of them—in fact, a lot of them; we talk to each other rather more than we used to—whisper in my ear that they wished the Conservative party that embraced this policy. That applies particularly to Conservative MPs from the north of England—north of the line from the Severn to the Wash. Perhaps there are not very many £2 million properties in those constituencies. Nevertheless, a lot of Conservative MPs from outside the south-east of England have privately said to me that they wish the coalition would adopt this principle.

The Chairman of Ways and Means (Mr Lindsay Hoyle): Order. I know that the hon. Gentleman’s Library notes have been helpful, but I am not quite sure that the

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journey he is trying to take the Chamber on is relevant to this debate. I am sure that he wants to come back into order with his good Library notes.

Stephen Williams: Thank you, Mr Hoyle. Your advice is always given with good heart and accepted freely.

New clause 5 highlights the Labour party’s conversion to the principle of a mansion tax. I said that the new clause was an innovation. Unfortunately, I am a veteran of Finance Bills. I have obviously insulted my Whips Office on several occasions in the past and keep being put on to Finance Bills as a punishment. I remember from last year’s Bill that, time after time, Opposition new clauses and amendments called for studies of the impact of Government policy, while the Opposition proposed no new policies of their own. Now, finally, after three years, they have suggested a new policy, albeit one pinched from my party, but they are still asking the Treasury to do a study of it—even though it is they, not the Government, who proposed it—because the Labour party cannot be bothered to explain how this new policy that it has suddenly converted itself to will actually work.

The Opposition have not provided any clues as to how their approach might work, even though they have had plenty of opportunities to do so. The hon. Member for Corby (Andy Sawford) referred to the Opposition day debate five weeks ago, and the Labour party has since had plenty of opportunities to flesh out how its version of the mansion tax would work in practice. I had hoped that Labour Members would explain it to us today, but they have not.

New clause 5 does not provide many clues. Let me give those on the Opposition Front Bench a piece of advice: if they want to ask somebody else to assess the impact of their own policy, they really ought to give them a bit more detail to work on. I am sure that the Minister will confirm that those who work at the Treasury are very clever people. Among them are a lot of economists and accountants with good qualifications and excellent degrees from top universities, but the Labour party should not think that it can present them with an almost blank piece of paper, which new clause 5 is, and then expect them to be able to explain within a few months how its policy will work without their having been given the barest of details.

Chris Leslie rose—

Stephen Williams: I see that the shadow Minister is itching to come in.

Chris Leslie: This is the thing with the Liberal Democrats—the hon. Gentleman is taking the biscuit. He is whipping himself up into a sense of righteous anger about his own policy, which we want to put on to the statute book. He is picking holes in a policy that he supposedly supported, but which he now cannot bring himself to vote for. Talk about a “push me, pull you” approach from the Liberal Democrats.

Stephen Williams: I assure the hon. Gentleman that I have righteous enthusiasm for the policy, because it is a Liberal Democrat policy that I have enthusiastically supported for the past three and a half years. How many weeks has he been an enthusiastic proponent of

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the mansion tax—10, 12, nine? How many weeks has the Labour party believed in this policy? When did he experience his conversion and accept the wisdom of the Secretary of State for Business, Innovation and Skills, who first proposed this policy several months before the 2010 general election? I know that the hon. Gentleman was not a Member of Parliament at that time, but I assure him that his colleagues who were in government rubbished the policy during the general election and the coalition negotiations. For the first three years of this coalition Parliament, Labour did not support it, but now—lo and behold—it does. When was he converted?

Chris Leslie: I am intrigued by the hon. Gentleman’s line of argument. He is attacking us for agreeing with him. We might not have agreed with him several years ago, but now we feel that a mansion tax is necessary to help with a tax break for lower and middle-income families. Is it his argument that we are wrong for supporting a mansion tax? Is that really what he is saying?

Stephen Williams: My argument is straightforward: I do not know what the Labour party’s variant of the mansion tax would be. Moreover, the Labour party does not seem to know, either; otherwise, why on earth would it frame new clause 5 in a way that asks the Treasury to explain how it might work? We are in an extraordinary position. I know what my party’s policy is and am about to tell the hon. Gentleman exactly how a mansion tax would work, but I had hoped to hear from him a little more detail on how his version would work, so that the clever people at the Treasury could produce the study that he wants.

Jack Dromey: I want to ask the hon. Gentleman about something that he did vote for. In a week when the International Monetary Fund has said that the politics of austerity, of which his party is a strong supporter, are clearly not working, does he now regret voting in 2010 for a £4 billion cut in affordable housing investment, which led to a 68% collapse in affordable house-building and threw tens of thousands of building workers out of a job?

Stephen Williams: To answer the hon. Gentleman directly, when the coalition Government came to office they had to make some quick decisions about what was essentially an economic emergency. We were left with a situation in which the last Government were borrowing £1 for every £4 that they were spending. We simply could not go on in that way, so we had to put forward an emergency Budget to gain the confidence of the markets so that people would continue to lend us enough money, on the triple A rating that we had at the time, to keep all Government programmes going. It has been acknowledged by the Chief Secretary to the Treasury and, I think, by the Deputy Prime Minister that some of the cuts in capital expenditure that the coalition implemented in its first two years in office perhaps should not have been made, in hindsight. But those cuts in the capital programme were in the last Budget of the last Government and were seen through by this Government. The Government have had the wisdom to say that investment in capital expenditure is a good way of getting growth going in the economy, and that is why we have had the wealth of initiatives that the shadow Minister mentioned earlier, and that is why we have had the new package of proposals to help the housing market.

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3.45 pm

After that diversion, I want to get back to new clause 5 and to explain how I think the mansion tax will work. Perhaps that will help the shadow Minister scope up the study that he wants the Treasury to do—to help the Labour party with the policy making that it does not seem capable of doing itself. We have said consistently that the mansion tax should be a 1% annual levy on the excess value of a property over £2 million. If a property is valued at £2.5 million, a 1% levy will be paid on £500,000—a mansion tax of £5,000 a year.

Jonathan Edwards: I could not get an answer from the Labour Front Bench, but under the Lib Dem proposal would productive agricultural land be included in the estate for mansion tax purposes?

Stephen Williams: The mansion tax, as the name suggests, is a tax on mansions. If a farmhouse on agricultural land was of mansion proportions and, whether it was in Carmarthen or elsewhere, was valued at more than £2 million, it would fall within the scope of a mansion tax, but the agricultural land itself—whether it is in the curtilage of the house or in the wider area of the farm—would not fall within the remit of a mansion tax. However, my party is currently reviewing all its tax policies, including the taxation of land. I do not want to be diverted too far down this route, although it is an issue on which my party has campaigned since the days of Lloyd George, who, as I am sure hon. Members will agree, was probably the most significant Prime Minister of the 20th century. I will say no more on that on this particular day.

I will do my best to help the Labour party with some of the other details of how the Liberal Democrats think that the mansion tax should work. A criticism that is made of the mansion tax is what happens if a pensioner or someone on a low income is living in a house valued at more than £2 million—the so-called asset rich, but income poor. Our answer is straightforward. Someone in those circumstances would defer payment of the tax until the property was sold or their income rose to a level at which they were able to pay it. The most likely scenario is that when the property was sold, the deferred, rolled-up tax liabilities would crystallise and be met out of the proceeds of sale. That is the answer to the asset rich, income poor conundrum.

Another major principle, which might help the Labour party, is that we see the mansion tax as a national tax. There is a debate to be had about what we do with our only existing property tax—the council tax—such as introducing higher bands, but that is a debate for another day. In any event, the council tax is a local tax and we are clear that the mansion tax, as the Liberal Democrats propose it, should be a national tax and form part of the rebalancing of the tax system away from taxes on work and enterprise and on to income from wealth speculation and pollution.

Our principles on the mansion tax are well thought through. Unfortunately, they are not currently shared by enough of our Conservative coalition colleagues. Some share our enthusiasm for a mansion tax, but a majority—certainly ministerial colleagues—do not.

Daniel Kawczynski (Shrewsbury and Atcham) (Con) rose—

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Stephen Williams: Maybe the hon. Gentleman is about to reveal something.

Daniel Kawczynski: The point made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) is important, and I was worried that the hon. Member for Bristol West (Stephen Williams) could not answer it as clearly as I would like. Farming is an essential part of many estates in Shropshire, and the land and agricultural buildings could tip them over the limit. Shropshire farmers are struggling already with prices from supermarkets, and I am very concerned that, if this tax were introduced under those circumstances, they would be adversely affected.

Stephen Williams: The hon. Gentleman is essentially asking me a variant of the question asked by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). He mentions agricultural buildings. Clearly, a mansion tax is a residential property tax: a tax on the building that the landowner—the farmer, the rich individual or whoever—lives in. It would not include barns, pigsties and the other agricultural buildings to which he referred, even if they have a high value. This would simply be a tax on residential property occupied by a person, not farm animals or anyone else: only the farmhouse itself, or the estate house, would fall into the ambit of a mansion tax.

Coming directly to the problem with new clause 5, the poor clever people in the Treasury simply do not have enough detail to go on to produce this study within six months of the passage of the Bill. This is the opportunity for Labour Front Benchers to answer these questions. They can intervene as many times as they like. [Interruption.] If they are listening, of course. This is an opportunity for them to tell us how the Treasury is going to conduct this study. It really does need some more detail. Is Labour’s variant on the mansion tax a tax on the whole of the £2 million, or is it a tax on the excess of the £2 million? That is completely unclear from any of the speeches made by shadow Ministers, or from the motion. What is the base of the tax?

Chris Leslie: We based our proposal on the Liberal Democrat analysis that a mansion tax could be on the excess of £2 million of value, raising, I think the hon. Gentleman said, £2 billion. That was the basis on which we assume he has some deeper calculations, and I hope he can produce them and share them with the Committee, because it seems a sensible proposal.

Stephen Williams: That is very helpful, because that is the first time we have heard it. It is nice, too, to have an acknowledgement that the Opposition have based whatever they have said so far on statements from my party. I am grateful for that acknowledgement. They have been giving the impression that it is their policy, rather than a magpie policy stolen from the Liberal Democrat policy nest.

Chris Leslie: Given that I have helped to clarify that for the hon. Gentleman, will he now do the right thing and support his own policy in the Division Lobby today? It is very simple.

Stephen Williams: I always strive to do the right things; I am sure all hon. Members do. In the Opposition day debate five or six weeks ago, the Government

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amendment was so beautifully crafted by the people in the Liberal Democrat Whips Office and the Conservative Whips Office that I was able to vote for it. It said that the Liberal Democrats in the coalition support the principle of a mansion tax, but acknowledged the fact that the Conservatives in the coalition do not. When I voted for that motion, therefore, I was indeed voting to endorse the Liberal Democrat policy of a mansion tax.

John Mann (Bassetlaw) (Lab): I thank the hon. Gentleman for giving way, because I am little perplexed. Is this not the first opportunity for the Liberals to have one of their policies adopted by a major party? It has not happened in the past two and a half years. Should he not be thinking that his best bet is to throw more things the Labour way, because the way things are going, that will be his only chance in the future?

Stephen Williams: The hon. Gentleman, whom I quite like and respect—a feeling not shared universally among his colleagues—tempts me to comment on what might happen in the 2015 general election, on what discussions might take place in its aftermath and on what we might say during it. In 2015, the Liberal Democrats will say that we favour a mansion tax, with all the details we have already put on the table. I intend to publish a short paper that might help—it might do the Treasury’s job for it, making the new clause unnecessary—and which will flesh out what I am talking about. He said that Labour might benefit from taking more policies from the Liberal Democrats. We are all in politics to see our ideals, principles and policies put into practice, and if Labour wants to adopt more Liberal Democrat positions, instead of always saying we are wrong, the public might welcome that more grown-up attempt at consensus politics.

Andy Sawford: I do not understand something about the hon. Gentleman’s remarks. He has justified not voting for his own policy five weeks ago on the basis of an artfully crafted—I think he used those words—Government amendment that allowed the Liberal Democrats to wriggle out of it. But today there is no such amendment. He has challenged, very assertively, the depth of our new clause. If he is so confident in the depth of his own policies, why have the Liberal Democrats not tabled a new clause that he could vote for today?

Stephen Williams: I am happy to reveal now that I will not be supporting new clause 5 in the Division Lobby. That should not surprise the hon. Gentleman. I will not be supporting it, because it is not about the principle of introducing a mansion tax. It asks for a study. It asks the Treasury to do some work. These are busy people, with important work to do, and I do not want to waste their time. We do not want them to waste their time finessing badly thought-through Labour party proposals.

Chris Leslie: On a point of order, Mr Hoyle. Is it not the case that only Government Members can table amendments to a Finance Bill that would increase a charge or a tax, and therefore, under the rules of the House, these sorts of reviews are the only device the Opposition have to suggest such a tax change?

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The Chairman of Ways and Means (Mr Lindsay Hoyle): That is broadly correct.

Stephen Williams: Of course, that is broadly correct, but I repeat that if the shadow Minister wishes new clause 5 to be implemented, he needs to provide more detail, so that the House can consider whether it is worthy of support. I do not think it worthy of support, because it is so full of holes. It would waste the time of the mandarins in the Treasury to ask them to come forward with a study for which they do not have the right brief. We have not been told at what rate the Labour party wants to set the mansion tax. Here is another opportunity for the Opposition to help the Treasury. Would the rate be 1%, 2%, 2.5%, 3%?

Chris Leslie: It would raise £2 billion pounds.

Stephen Williams: The shadow Minister says that it would raise £2 billion. [Hon. Members: “That’s your answer.”] Well, it is an answer, but it is not what is in the new clause. Why does the new clause not say, “Can we have a study from the Treasury on the best way to raise £2 billion?” It would be in order, would it not, Mr Hoyle, to put down a new clause asking the Treasury, “What is the best way to raise £2 billion?” The Labour party wants to raise £2 billion, but wants someone else to tell it how to do it.

Chris Leslie: I confess. Perhaps we could have mentioned the £2 billion. Will the hon. Gentleman forgive us to the point of at least abstaining on the new clause? Perhaps that is a compromise we can offer.

Stephen Williams: Abstention on certain issues is sometimes unfairly pooh-poohed by all parties. I have done it on certain issues. Indeed, abstention on a Bill that has a range of measures, some of which one likes and some of which one does not, is an entirely honourable thing to do, and Members from all parties will have done it. Although we would like to think that the Labour party has had plenty of time to craft a motion that might appeal to Liberal Democrats, I am afraid that in new clause 5 the Opposition have failed. They have again not managed to tell us how they think a mansion tax would work.

4 pm

Mark Lazarowicz: The hon. Gentleman should stop digging and just say that the reason he will not support new clause 5 is that the Tories will not let him. If his position is that our proposal is not good enough, why does he not give an assurance that Lib Dem Ministers will work to bring forward more detailed proposals? They can do that now; after all, the Chief Secretary to the Treasury is a Liberal Democrat.

Stephen Williams: The Chief Secretary to the Treasury is indeed a Liberal Democrat. I am sure my right hon. Friend has given this policy issue a great deal of careful thought with his advisers and I am sure that if he were standing where I am standing today, he would be making similar points to those that I am making.

There are two parts to new clause 5. As well as calling for a study of—we now know—how to raise £2 billion through a mansion tax, however ill defined the composition

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of that tax would be, it is also meant to fund a tax cut for millions of people on middle and low incomes, as part of a fair tax system. Again, that is simply not specific enough. We do not know what it means. I am guessing—I can guess, but it would not be fair for those in the Treasury to have to guess how they would have to do such a study—that the purpose is to fund the reintroduction of a 10p rate of income tax. That is my guess, but it is a well informed guess, because the Opposition’s amendment 4 to clause 3, which we will come to tomorrow, suggests that they want to reintroduce a 10p rate of income tax. Again, however, neither that amendment nor new clause 5 gives us any detail for how that would work or, for instance, to what income band it would apply.

Perhaps that it is because the history of the 10p rate is such a miserable memory for Labour Members. I remember the 2007 Budget, which was the last one the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) introduced, when he scrapped the 10p rate of income tax specifically to fund a reduction of the rate of income tax from 22% to 20%. However, the coalition Government have made the principle of the 10p rate of income tax completely redundant, because we have introduced not a 10p rate on people with very low incomes, but a zero rate. I am sure that most of our constituents, whether in Chorley or Bristol West, would much prefer to pay a round tax rate of zero on their low earnings than 10%, which appears to be—although we are not sure—what the Labour party is proposing.

I will therefore not be supporting new clause 5 in the Division Lobby and I would invite all my Liberal Democrat colleagues not to support it either. We are completely clear as a party. We support the introduction of a mansion tax. We are clear about how it should be contrived, on whom it should be levied and how the proceeds from it should be spent. We do not need anybody else to do a study for us—whether the Labour party or the Treasury—to tell us how it might work. It is a great shame that after three years in opposition, at the first opportunity that Labour has taken to say, just tentatively, what it is in favour of—rather than talking about the long list of things that this Government have done that it is against—and just a few weeks after converting to a mansion tax, the Opposition need somebody else to tell them how it will work.


Stewart Hosie (Dundee East) (SNP): That was an interesting half hour. It has changed entirely what I had planned to say, such is the power of the hon. Member for Bristol West (Stephen Williams), although I suspect not necessarily in a way he would like.

A review of the workings of the support given to the housing market, which new clause 1 would provide, is necessary to ensure that there are no abuses, but perhaps also to make it clear to all sides that the support being provided is not necessarily for affordable homes, but for the building sector—although it would be better if it were primarily for affordable homes. I think it would be quite useful to have a report on that.

On new clause 5, I was initially intending to ask the hon. Member for Nottingham East (Chris Leslie) to provide a little more detail, in the way that the hon. Member for Bristol West did. There are a number of reasons for that, but mainly it is because it might direct the Treasury towards where it might want to look. If,

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for example, the mansion tax were to be based on council tax banding, then, as we saw in Cardiff where a re-banding took place, it was not necessarily the wealthiest who ended up paying more; 64% of households ended up paying more, which was not a very good outcome. Secondly, if it is paid on the basis of stamp duty land tax, as currently configured, the Exchequer yield would be received only on the sale of the property. Quite clearly, it would not capture all the excess wealth from every property valued at over £2 million. If the mansion tax is to be a new tax, duty or levy, it would have been useful to have it explained.

There may well be a perfectly sensible case to make for a mansion tax, and I thought that that was what the hon. Member for Bristol West was trying to do at the beginning of his speech. As he went on, however, things became rather more confused. I paraphrase, but I think quite accurately, that the hon. Gentleman said that the mansion tax would apply only to a mansion or big house where a person or people lived. If this mansion or big house has one or two rooms that are put out to let, but perhaps not advertised particularly well, it could become a bed and breakfast or a hotel—no longer necessarily remaining a residential property where a person lives.

A number of interventions and discussions took place about farm houses or estates that might breach the threshold. Again, a house where people lived seemed to be the criterion, but one could easily imagine an associated outbuilding converted to house a few chickens, which could change the building from being a residential property. It was interesting to hear that. The hon. Member for Bristol West also referred to the building being the key, even within the curtilage of land on which crops were grown. If an ornamental garden with fruit trees that could be harvested lies inside the curtilage of land but the property is worth £3 million or £4 million, it could, according to the hon. Gentleman, be exempt.

Stephen Williams rose—

Stewart Hosie: Before I go on, I will happily take the hon. Gentleman’s intervention.

Stephen Williams: I am glad that the hon. Member for Dundee East (Stewart Hosie) is phrasing his questions in this way, but I suggest that he direct them to Labour Front Benchers, as it is, after all, their new clause and they have failed to provide the detail. I provided more detail in my speech in order to be helpful. I can answer all the hon. Gentleman’s questions, but I think he should wait for my pamphlet, which I can assure him will knock on the head all those anti-avoidance issues that he raises.

Stewart Hosie: I am almost at a loss for words at the suggestion that anyone could imagine that the world will hold its breath waiting on a Liberal Democrat pamphlet! [Interruption.] I do not want to digress, Mr Hoyle, but that is a mind-boggling proposition.

The confusion in the hon. Gentleman’s contribution was far from saying that new clause 5 does not make sense; rather, it confirmed why the new clause was necessary. There are so many flaws, omissions and potential avoidance mechanisms in the Liberal Democrats’ proposals—and we had all assumed that they were worked

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up to some extent when they went into this miserable Government—that it makes perfect sense for the Treasury to investigate them with all their flaws to determine whether they, or another version of them, are even workable. If the hon. Member for Nottingham East chooses to press new clause 5 to a vote, we will be happy to support it.

Sammy Wilson (East Antrim) (DUP): One of the common themes that has emerged on the Opposition Benches throughout the debates on the Budget is that the Government can and should do something to stimulate the economy by means of additional capital spending. One way of doing that—and one way of rapidly stimulating the construction industry—is to build houses; and, of course, many other social benefits arise from house building.

The Government have chosen a particular path towards the stimulation of house building, and I am not sure whether they have chosen it simply in order to avoid the registration of additional borrowing as part of Government debt. The means by which they have decided to stimulate the housing market—this is significant, because it is stated in the Red Book—will have no implications for central Government public sector net borrowing; it will have an impact only on the central Government net cash requirement. It seems that the Government may be engaging in the contortions described by the hon. Member for Nottingham East (Chris Leslie) in order to avoid certain Treasury accounting arrangements, rather than considering what policy will prove effective.

That is the first thing that we should consider. The second was alluded to by the hon. Member for Dundee East (Stewart Hosie). If the sole intention is to stimulate the housing market and the construction industry and it does not really matter who buys the houses or benefits from the policies, the Government ought to make that clear. Such a move would have various side effects, perhaps benefiting people who, in the opinion of many Members, do not need help with housing. If the policy is to provide a general stimulus across the board which is not relevant to the size of people’s incomes, to whether they are first-time or second-time buyers or to whether they are buying to let or buying to live in their houses, that should be made clear to us.

I do not think that the Government should be afraid of new clause 1. One of its two policy schemes, the guarantee scheme, does not involve any expenditure, because it will come into operation only if a house has to be sold at less than the price that was paid for it. There is evidence that such schemes work. In the Irish Republic, the National Asset Management Agency introduced its 80-20 scheme in an attempt to stimulate demand for some of the properties that it had taken over, and I hope that it will introduce the scheme in Northern Ireland as well. It owns property there, and is currently putting it on the market. There is evidence that the guarantee enabled people to secure loans that would not normally have been available to them, because the lenders had been relieved of some of the risk.

The right hon. Member for Delyn (Mr Hanson) asked whether such schemes would apply throughout the United Kingdom and in all the devolved Administrations. He mentioned the potential for distortion in the housing

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market, suggesting that people might move from one country in the UK to another in order to take advantage of them. I understand that the guarantee scheme will apply throughout the United Kingdom.

The second scheme involves equity loans. I do not think that the Government should be worried about scrutiny of its likely effectiveness. For some time, Northern Ireland has operated a co-ownership scheme which enables people to rent half a property and buy the other half. We were able to negotiate that with the banks because all the risk was being taken by Co-ownership Housing and the public purse, which would be responsible for the first 50% of any loss. The banks have actually dropped the requirement for a 20% deposit. The good thing is that there has been no cost to the public purse; it has simply been borne by the banks not requiring the deposit, because the risk has been taken out of the house purchase.

4.15 pm

Mr Steve Reed (Croydon North) (Lab): Does the hon. Gentleman also see scope for more stimulation of co-operative housing schemes in the mix in the United Kingdom? In Germany and Canada, some 10% of housing is co-operative. In parts of Scandinavia, the figure is 18%. The figure is higher in those countries because their Governments act to promote the development of co-operative housing. In the United Kingdom, it accounts for just 0.6% of all housing. It offers a way for people to get their foot on the housing ladder, without the need for unaffordable deposits.

Sammy Wilson: It does indeed. Let me illustrate the success of co-ownership in Northern Ireland, which is similar to the co-operative housing that the hon. Gentleman describes. More than 50% of new houses in Northern Ireland are being sold through the co-ownership arrangement. Importantly, because it is targeted at first-time buyers, it has enabled them to get their foot on the housing market ladder, stimulated demand in the economy and created the jobs in the construction industry that are so sorely needed.

Be it the mortgage equity scheme or the mortgage loan scheme, the Government should have no fear of new clause 1. If they have confidence in the schemes they propose, they should not fear scrutiny of them. Indeed, all the evidence from the Northern Ireland market and the Irish Republic market shows that the schemes will work.

Bill Esterson (Sefton Central) (Lab): Does the hon. Gentleman agree that there is a particular need across the country for affordable housing to rent and to buy, and that, on striking the balance that he referred to earlier, there is a grave danger, as the Royal Institution of Chartered Surveyors has said, of creating another housing bubble if the wrong level is set? Is that the point he is driving at?

Sammy Wilson: That is the next point I want to make—

Stewart Hosie: Before the hon. Gentleman moves on, he is making a number of very serious points about the financial transaction part of housing support, but I hope he agrees that the one downside is that it does not

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allow that cash—such as it is—to be used for capital spending in any way apart from housing, and that it is being paid for by a real-terms cut in the Revenue departmental expenditure limit over the next two years.

Sammy Wilson rose—

The Chairman of Ways and Means (Mr Lindsay Hoyle): Order. I hope that the hon. Gentleman is coming to the end. I know he has a lot to say, but other Members want to contribute and I want to make sure that the Minister can reply.

Sammy Wilson: Thank you, Mr Hoyle; I will finish, then.

What, therefore, are the reservations about this scheme? The first concerns the way in which the spend will be dealt with. Of course, loans have to be repaid, and the scheme has been financed through a DEL cut across Departments of 1%. Secondly, it amounts to £4 billion over the next three years. The question is, could that money, if it is spent on housing, target the most needy, rather than being spent across the board with no restriction on income, meaning that people can buy second homes? Is there a better way of spending that £4 billion? Or, as the hon. Member for Dundee East suggested, if the approach were less prescriptive, are there other capital areas it could be spent on, leading to a far greater multiplier effect and impact on the infrastructure of the United Kingdom? Those are questions about the scheme that need to be asked.

My last point is that although the dynamics of the housing market would suggest that if someone moves from their home to a more expensive, bigger home—I am sure that the Minister will make this argument—it releases houses further down and starts the market moving. My main priority for constituents who come to see me is those who are not even in the housing market at all. Even though the dynamics of getting people to move up the housing chain are important, it seems to me that the priority ought to be those who cannot get social houses and who cannot afford privately rented housing as rents, certainly in Northern Ireland, are going up at a rate that prices many people out of the market. The opportunity should be provided for them to get in at the low end of the market through affordable housing. That is why we need a much more targeted scheme. One reason why I think it would be useful to examine the scheme within a short period of time is that it would show whether the real objectives and priorities in the housing market are being addressed by these schemes.

Stephen McPartland (Stevenage) (Con): I appreciate the opportunity to speak in this debate, Mr Hoyle, and I shall make my speech very short as I appreciate that two Opposition Members wish to speak. I will speak for about three minutes tops and will rattle off my points as fast as I can.

The first issue I want to raise on new clause 5 is the fact that it refers to property and does not distinguish between residential property and business property. That concerned me greatly when I first looked at the new clause, as it would create huge concerns in the business community. In my constituency of Stevenage, we have some large business interests. GlaxoSmithKline has a

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huge operation employing 4,000 scientists in Stevenage—

[

Interruption.

]

Although the new clause mentions the “mansion tax”, it just states that it would be on “property”.

How would that property be valued? There seem to be two values in property at the moment: the value one thinks one’s property is worth and the value at which someone would buy it. There is always a big disparity between those values. Such a change would lead to a large revaluation exercise across the UK and my concern is that once we have that revaluation exercise, council tax revaluation will be a real problem across the country. A huge number of people will be very concerned about council tax increases if all their properties have been revalued. Council tax more than doubled under the previous Government and I am pleased to say that under this Government it has been frozen for the past three years—[Interruption.] I see the annunciator has just changed to show my name, although I will sit down in about one minute.

My other point is that the new clause also refers to a tax cut for low-income and middle-income earners, and I am proud that this Government have introduced a tax cut that will be worth more than £700 next year for those low earners on up to £10,000. I am sure that the Opposition would agree with the Government that the best way to introduce a tax cut is to have a tax rate of zero rather than the 10p tax rate on which my colleague the hon. Member for Bristol West (Stephen Williams) had a very robust exchange with Opposition Members.

I shall now sit down as you are gesturing for me to do so, Mr Hoyle.

Sheila Gilmore: The test of what is happening is whether the economy will be stimulated. That is the real test that we should keep under review. If we want collectively to stimulate the economy, the most direct way of doing that would be to fund socially rented houses. That would get people into jobs, who would then help to stimulate the rest of the local economy. I do not know whether an ideological aversion to that has brought about the proposals we have before us; perhaps it has, because all the affordable housing the Government seem to want to fund directly is not even affordable.

In this very week, when we are remembering the 1980s and the Prime Minister of that time, we are in grave danger of repeating what happened then. The Government chose to allow housing benefit to take the strain rather than investing directly in housing, which resulted in the problem that we now have a large housing benefit bill. The way this Government are going about even the affordable housing they say they will build, which will not of course truly be affordable, again runs the risk of increasing the housing benefit bill.

We are looking to stimulate the economy with something for which there will probably be no take-up, judging from experience, and it will not benefit the people we should really help. If we do not review this policy quickly, we could be going down a very dangerous road.

Mark Lazarowicz: As time is limited, I take this opportunity to pursue with the Minister some of the issues raised earlier by colleagues on the Opposition Benches about how the schemes will operate in Scotland and Wales—outside England. I hope the Minister can answer these questions.

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Will the Minister confirm that the mortgage guarantee scheme will apply to Scotland, Wales and Northern Ireland as well as to England? If that is the case, will he indicate which Department will operate it for Scotland and the other devolved areas? If it is to be the Department for Communities and Local Government, I suggest that it would be more appropriate for the scheme to be operated by the Scottish Government or the relevant devolved Administrations.

Would it be possible for the Scottish Government and the other devolved Administrations to amend the scheme to take account of the objections raised, which will no doubt be shared by all of them, that it would benefit the buyers of second homes and people on relatively high incomes? In most parts of Scotland, Wales and Northern Ireland, prices of £600,000 are very much at the higher end of the housing market.

If someone in one of the devolved areas defaulted under the mortgage guarantee, would the cost be borne by the Treasury or the devolved Administration? I appreciate that these are technical questions but I am sure that, as the Minister has thought through the policy in great detail, he will be able to answer them.

The Economic Secretary to the Treasury (Sajid Javid): I thank all Members for their contributions. This has been a thoughtful and engaging debate.

Both new clauses are about housing. New clause 1 would require the Government, within three months of Royal Assent, to provide a report to Parliament on how the tax system supports those seeking to purchase a second new home and how the Government plan to prevent it. New clause 5 suggests introducing a mansion tax on properties worth more than £2 million, with a view to using the revenue to fund a tax cut for those on low or middle incomes.

The Government oppose both new clauses. I will elaborate on the reasons, but first allow me to make a few points about the significant steps the Government have already taken and about our overall housing strategy, as many issues relating to it were raised this afternoon. I shall also respond to some of the other issues that were raised.

The new clauses centre on the housing measures in the Budget. The Government announced a major new package to support new development and affordable housing, alongside reforms to the planning system. The measures included the Help to Buy equity loan scheme and the Help to Buy mortgage guarantee scheme. They will give a much needed boost to housing supply, and equip those who aspire to own their home with the tools to do so.

John Mann: Would the Minister accept that, with the affordable housing levy the Government have brought in on single properties, those who build their own home now face a minimum £40,000 tax per property? In Hertfordshire, it is £187,000. That will kill off aspiration for those who wish to build their own home.

4.30 pm

Sajid Javid: What the Minister will accept is that this Government have done more than any other in recent times to help those who aspire to purchase their own

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home. The Budget announced financial support of £5.4 billion for housing, which builds on the £11 billion of support already committed during the spending review period. The Government are also taking significant action through our build to rent and affordable homes guarantees programme.

Alongside those measures, the Government are reforming the planning system to ensure that reforms will increase housing supply. Planning constraints have depressed the supply of new homes. The Budget announced that the Government will take further steps to make the vital planning reforms that are needed to ensure that we have a regime that is simple to access, supports growth and is responsive to housing need. As hon. Members will see, this Government have a comprehensive strategy for housing, we have taken significant action, and those measures will give a much needed boost to both the demand and the supply side of housing.

I shall now discuss the new clauses. New clause 1 proposes that the Government provide a report to Parliament, three months after the passing of the Bill, to ensure that the tax measures do not benefit those who are purchasing a second home. The Government have already taken steps, through the tax system, on the issue of second homes. We have changed the discounts on council tax for second homes, through the Local Government Finance Act 2012. From 1 April 2013, billing authorities in England will be able to charge up to 100% council tax, instead of between 50% and 90%, on properties that they consider to be second homes. That corrects an imbalance permitted by the previous Government, which allowed second home owners to pay less than those with a single property.

The report suggested is wholly unnecessary, but in today’s debate issues have been raised about the Help to Buy scheme, particularly whether it will support those who wish to purchase a second home. We have already made it very clear that second homes will not be eligible for the Help to Buy equity loan scheme. The scheme builds on the existing successful First Buy scheme, and is able to use existing processes. In the new scheme the Government, through the Homes and Communities Agency, have a more direct relationship with the purchaser, and require a legal declaration by the purchaser’s solicitor that the property will be the purchaser’s only and main residence. The Chancellor has also been very clear that the intention of the Help to Buy mortgage guarantee scheme is to help people buy their first home, or to move up the property ladder as their family grows. But the mortgage guarantee scheme represents a major new intervention, and we must ensure that we get it right.

Chris Leslie: May I clarify the announcement that I think the Minister is making? Is he saying that there will be a requirement, as a covenant within the mortgage deed arrangements, to exclude the use of any equity from remortgages and so on for second home purposes? That, essentially, is what he has announced.

Sajid Javid: What I am saying is that, at the Budget, we set out a scheme outline. Now we need to work, with lenders and other stakeholders, on the detail. We want to ensure that we avoid any unexpected adverse consequences of the scheme, such as attempts to use it to purchase second homes. We want to look at this carefully, and we want to ensure that we discuss the

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details with industry. We have already started this process, and we will report back to Parliament in due course. Therefore the report suggested by new clause 1 is wholly unnecessary.

Bill Esterson: This is a really important point. What the Minister has not announced is that, if somebody is moving up to a second home, they must sell their first home. Can he confirm that they will not be able to keep that first home, because otherwise it will mean that people will be able to get a second home by using the scheme?

Sajid Javid: The hon. Gentleman raises a good point, which is that it is the Government’s duty to carefully consider what is meant by a second home. He has given as an example the situation in which someone has no intention of owning two homes, but is in the process of moving home. Let me share another example. There are couples who unfortunately get divorced, and there may be a need for another home as the family splits. The question then arises, is that a second home or not? It is sensible for the Government to examine such issues carefully as we flesh out the details.

Stewart Hosie rose—

Sajid Javid: In the interests of time, I must press on and answer some of the questions that were raised, including by the hon. Gentleman.

The hon. Member for Edinburgh North and Leith (Mark Lazarowicz) and others asked about the devolved authorities, in particular Scotland. The mortgage guarantee scheme is a UK-wide scheme and will be available to all UK residents, including of course those in Scotland and other devolved areas. The mortgage equity scheme is an England-only scheme as housing is a reserved issue among the devolved authorities.

Mr Hanson: For clarity, under that second scheme, could a resident of England purchase a property in Wales, Scotland or Northern Ireland?

Sajid Javid: The right hon. Gentleman asks a good question. Those are some of the details that we will flesh out. If he will allow me, I will look into the question further. I hope it is clear to him that the intention is that the mortgage guarantee scheme is a UK-wide scheme.

In the time that I have left, I shall turn to new clause 5. We have always been clear that the proposed mansion tax is an issue on which the two parties of the coalition have differing views. Our Liberal Democrat colleagues have supported the principle for some time, as we heard today so eloquently from my hon. Friend the Member for Bristol West (Stephen Williams). In contrast, Conservative Ministers have very real concerns about such a proposal.

We have concerns that a third of properties in London worth more than £2 million have been in the same ownership for 10 years, and that a mansion tax could hit asset-rich but potentially income-poor households. We have concerns that a family could live in a £2 million house, but have a very large mortgage. That would mean that their net wealth was a lot lower than the actual value of the home. We have concerns that any

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mansion tax would be administratively burdensome for HMRC to operate, not to mention intrusive for the person having their home inspected. But Opposition Members should be aware that we are taxing anyone purchasing a new home at this high value through the stamp duty land tax of 7% on residential properties costing £2 million or more. That is a policy that is easy to administer and it will not impact on existing home owners.

The Opposition have proposed that a mansion tax could pay for a tax cut for millions of people on low and middle incomes. The Government have already introduced tax cuts for those who need it most. We are increasing the personal allowance to £9,440 from April—the largest ever cash increase. That will be increased by a further £560 to reach £10,000 in 2014-15, meeting the Government’s commitment a whole year early. That is a tax cut for 24 million people and together takes 2.7 million people out of income taxation altogether.

Budget 2013 also announced that the fuel duty increase planned for September will be cancelled. The Finance Bill keeps fuel duty frozen at current levels, resulting in the longest freeze in fuel duty for 20 years, helping households and businesses with the cost of motoring.

Meanwhile, those with the highest incomes continue to contribute the most. This year the top 1% of taxpayers—those with an income of more than £150,000 a year—will pay approximately a quarter of all income tax. The top 5% of taxpayers—those on incomes of £68,000 or more—will pay nearly half of total income tax. As part of the Government’s commitment to create a fairer tax system, since 2010 the Government have raised taxes on the rich in every Budget. Budget 2010 introduced a higher rate of capital gains tax, Budget 2011 tackled avoidance through disguised remuneration, and Budget 2012 raised stamp duty land tax on high value homes and announced a cap on income tax reliefs. The autumn statement of 2012 took action to reduce the cost of pensions tax relief.

In Budget 2013 we announced further significant measures to tackle aggressive tax avoidance and offshore tax evasion by high earners. The richest now pay a higher percentage of income tax than they did under the previous Government. No doubt those on the Opposition Benches think a better approach would be to introduce a new starting rate of income tax, but let us not forget that the 10% rate is a policy that they introduced and then scrapped once before, to the cost of many further down the income scale—the people whom they claim they want to help. Fortunately, the Government have a more coherent income tax policy, as we heard from my hon. Friends the Members for Stevenage (Stephen McPartland) and for Bristol West. Our increases to the personal allowance have replaced the 10p rate, which Labour doubled; there have been successive increases to the tax free personal allowance. Effectively, we have introduced a 0% band.

Geraint Davies (Swansea West) (Lab/Co-op): On a point of order, Mr Amess. The Minister is not addressing new clause 5. Surely this is not in order.

The Temporary Chair (Mr David Amess): I am sure that the Minister has heard the point of order and now perhaps will address his remarks more precisely to the new clauses that we are debating.

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Sajid Javid: I do think that it is relevant because the issue came up during the debate, but I take your guidance, Mr Amess.

The Government are committed to making the aspiration of home ownership a reality for as many households as possible. The housing measures introduced in this Budget will tackle long-term problems in the housing market, giving a much needed boost to housing supply and supporting those who want to get on or move up the housing ladder. Introducing a mansion tax would create real fairness issues by hitting asset rich but potentially income-poor households. It would serve to create only complexity and uncertainty. The Government have already made huge strides towards a fairer society and a stronger economy, and new clause 5 will not further that. I ask hon. Members not to press the new clauses.

Chris Leslie: Given the constrained time available under the Government’s programme motion and the need to move on to other issues, I do not wish to press new clause 1 to a vote, but it is important that we continue to press Ministers for some firmer answers on their Help to Buy scheme, which gives the impression of having been written on the back of an envelope without much thought and without looking in sufficient detail at some of the questions that have arisen in the course of the last few hours, whether with regard to devolved Administrations or second home purchases. Therefore, it is necessary to consider this further during the Bill’s passage.

However, it is important to test the view of the House on new clause 5, particularly given the speech of the hon. Member for Bristol West (Stephen Williams), who, in an acrobatic display of contortions that tests even the most adept of Liberal Democrats, managed to find a way to oppose a policy that he has supposedly advocated for a long time. Even when we agreed that the policy was the same, raising £2 billion on mansions worth over £2 million and using that money for a tax cut for low and middle-income households, he could not bring himself to abstain on the issue but will vote against the new clause. Therefore, we must test the view of the Committee.

Stephen Williams: New clause 5 calls for a study to be done by the Treasury; it is not about the principle of the policy. The Labour party gets £13 million of public money, Short money, to spend on policy development. Why does it not use some of that money to do its own studies?

Chris Leslie: When the Liberal Democrats are in a hole they really should stop digging. Is the reason for the hon. Gentleman voting against his own policy that he does not want us to look into the very details that he could not answer when challenged on his policy? Of course, if we are to implement a mansion tax we want to make sure that we get it right. We do not want the unthought-through approach taken by the Treasury. We want to make sure that we have taxes that are fair and will be sustainable for the population as a whole. Therefore, it is important that we test the principle of a mansion tax. Lower and middle-income households need that extra help and it is important that we put this question to the test. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

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New Clause 5

Mansion tax

‘The Chancellor shall review the possibility of bringing forward a mansion tax on properties worth over £2 million and publish a report, within six months of the passing of this Act, on how the revenue could be used to fund a tax cut for millions of people on middle and low incomes as part of a fair tax system.’.—(Chris Leslie.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided:

Ayes 234, Noes 304.

Division No. 211]

[

4.44 pm

AYES

Abbott, Ms Diane

Abrahams, Debbie

Ainsworth, rh Mr Bob

Alexander, rh Mr Douglas

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bain, Mr William

Banks, Gordon

Barron, rh Mr Kevin

Bayley, Hugh

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blears, rh Hazel

Blenkinsop, Tom

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, Lyn

Brown, rh Mr Nicholas

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Byrne, rh Mr Liam

Campbell, Mr Alan

Caton, Martin

Champion, Sarah

Chapman, Jenny

Clark, Katy

Clarke, rh Mr Tom

Clwyd, rh Ann

Coaker, Vernon

Coffey, Ann

Connarty, Michael

Cooper, Rosie

Cooper, rh Yvette

Corbyn, Jeremy

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Cunningham, Sir Tony

Dakin, Nic

David, Wayne

Davies, Geraint

De Piero, Gloria

Denham, rh Mr John

Dobbin, Jim

Dobson, rh Frank

Docherty, Thomas

Donohoe, Mr Brian H.

Doran, Mr Frank

Doughty, Stephen

Dowd, Jim

Doyle, Gemma

Dromey, Jack

Dugher, Michael

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Ellman, Mrs Louise

Engel, Natascha

Esterson, Bill

Farrelly, Paul

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Gapes, Mike

Gardiner, Barry

Gilmore, Sheila

Glass, Pat

Glindon, Mrs Mary

Goggins, rh Paul

Goodman, Helen

Greatrex, Tom

Green, Kate

Greenwood, Lilian

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harris, Mr Tom

Healey, rh John

Hendrick, Mark

Hepburn, Mr Stephen

Hermon, Lady

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hoey, Kate

Hopkins, Kelvin

Hosie, Stewart

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

Jackson, Glenda

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Jowell, rh Dame Tessa

Joyce, Eric

Keeley, Barbara

Kendall, Liz

Khan, rh Sadiq

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewis, Mr Ivan

Llwyd, rh Mr Elfyn

Long, Naomi

Love, Mr Andrew

Lucas, Caroline

Lucas, Ian

MacNeil, Mr Angus Brendan

Mactaggart, Fiona

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marsden, Mr Gordon

McCabe, Steve

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McDonagh, Siobhain

McDonald, Andy

McDonnell, Dr Alasdair

McDonnell, John

McFadden, rh Mr Pat

McGovern, Jim

McGuire, rh Mrs Anne

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Meacher, rh Mr Michael

Mearns, Ian

Miliband, rh Edward

Miller, Andrew

Mitchell, Austin

Moon, Mrs Madeleine

Morden, Jessica

Morrice, Graeme

(Livingston)

Morris, Grahame M.

(Easington)

Mudie, Mr George

Munn, Meg

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

Onwurah, Chi

Osborne, Sandra

Owen, Albert

Pearce, Teresa

Perkins, Toby

Pound, Stephen

Powell, Lucy

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Mr Jamie

Reed, Mr Steve

Reynolds, Emma

Riordan, Mrs Linda

Ritchie, Ms Margaret

Robertson, Angus

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Roy, Lindsay

Ruane, Chris

Ruddock, rh Dame Joan

Sarwar, Anas

Sawford, Andy

Seabeck, Alison

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheridan, Jim

Shuker, Gavin

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Smith, Owen

Spellar, rh Mr John

Stuart, Ms Gisela

Sutcliffe, Mr Gerry

Tami, Mark

Thomas, Mr Gareth

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Twigg, Derek

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Walley, Joan

Weir, Mr Mike

Whiteford, Dr Eilidh

Whitehead, Dr Alan

Williams, Hywel

Williamson, Chris

Wilson, Phil

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Woodcock, John

Woodward, rh Mr Shaun

Wright, David

Wright, Mr Iain

Tellers for the Ayes:

Graham Jones

and

Alison McGovern

NOES

Adams, Nigel

Afriyie, Adam

Aldous, Peter

Alexander, rh Danny

Andrew, Stuart

Baker, Norman

Baker, Steve

Baldry, Sir Tony

Baldwin, Harriett

Barclay, Stephen

Barker, rh Gregory

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Beith, rh Sir Alan

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Binley, Mr Brian

Blackman, Bob

Boles, Nick

Bone, Mr Peter

Bottomley, Sir Peter

Brady, Mr Graham

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brokenshire, James

Brooke, Annette

Bruce, Fiona

Bruce, rh Sir Malcolm

Buckland, Mr Robert

Burns, Conor

Burns, rh Mr Simon

Burrowes, Mr David

Burt, Lorely

Byles, Dan

Cairns, Alun

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Cash, Mr William

Chishti, Rehman

Chope, Mr Christopher

Clappison, Mr James

Clark, rh Greg

Clarke, rh Mr Kenneth

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Cox, Mr Geoffrey

Crabb, Stephen

Crockart, Mike

Crouch, Tracey

Davey, rh Mr Edward

Davies, David T. C.

(Monmouth)

Davies, Glyn

Davies, Philip

Davis, rh Mr David

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dodds, rh Mr Nigel

Donaldson, rh Mr Jeffrey M.

Dorrell, rh Mr Stephen

Dorries, Nadine

Doyle-Price, Jackie

Drax, Richard

Duddridge, James

Duncan, rh Mr Alan

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evennett, Mr David

Fabricant, Michael

Farron, Tim

Featherstone, Lynne

Field, Mark

Francois, rh Mr Mark

Freeman, George

Fuller, Richard

Garnier, Sir Edward

Garnier, Mark

Gauke, Mr David

George, Andrew

Gibb, Mr Nick

Gilbert, Stephen

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, rh Damian

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, Robert

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, Matthew

Hancock, Mr Mike

Hands, Greg

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Harvey, Sir Nick

Haselhurst, rh Sir Alan

Heald, Oliver

Heath, Mr David

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Herbert, rh Nick

Hinds, Damian

Hoban, Mr Mark

Hollingbery, George

Hollobone, Mr Philip

Hopkins, Kris

Howarth, Sir Gerald

Howell, John

Hughes, rh Simon

Hunter, Mark

Huppert, Dr Julian

Hurd, Mr Nick

James, Margot

Javid, Sajid

Jenkin, Mr Bernard

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Kirby, Simon

Knight, rh Mr Greg

Kwarteng, Kwasi

Laing, Mrs Eleanor

Lancaster, Mark

Lansley, rh Mr Andrew

Latham, Pauline

Laws, rh Mr David

Leadsom, Andrea

Lee, Jessica

Lee, Dr Phillip

Leigh, Mr Edward

Letwin, rh Mr Oliver

Lewis, Brandon

Liddell-Grainger, Mr Ian

Lilley, rh Mr Peter

Lloyd, Stephen

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Luff, Peter

Lumley, Karen

Macleod, Mary

Main, Mrs Anne

Maude, rh Mr Francis

Maynard, Paul

McCartney, Jason

McCartney, Karl

McIntosh, Miss Anne

McLoughlin, rh Mr Patrick

McPartland, Stephen

McVey, Esther

Menzies, Mark

Mercer, Patrick

Metcalfe, Stephen

Miller, rh Maria

Mills, Nigel

Milton, Anne

Moore, rh Michael

Mordaunt, Penny

Morgan, Nicky

Morris, Anne Marie

Morris, David

Morris, James

Mosley, Stephen

Mowat, David

Mulholland, Greg

Mundell, rh David

Murray, Sheryll

Murrison, Dr Andrew

Neill, Robert

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

Ollerenshaw, Eric

Ottaway, Richard

Paice, rh Sir James

Parish, Neil

Patel, Priti

Pawsey, Mark

Penrose, John

Perry, Claire

Phillips, Stephen

Pickles, rh Mr Eric

Pincher, Christopher

Prisk, Mr Mark

Pritchard, Mark

Pugh, John

Raab, Mr Dominic

Randall, rh Mr John

Reckless, Mark

Redwood, rh Mr John

Rees-Mogg, Jacob

Reevell, Simon

Reid, Mr Alan

Rifkind, rh Sir Malcolm

Robathan, rh Mr Andrew

Robertson, rh Hugh

Robertson, Mr Laurence

Rogerson, Dan

Rudd, Amber

Ruffley, Mr David

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shannon, Jim

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Shepherd, Sir Richard

Simpson, Mr Keith

Skidmore, Chris

Smith, Miss Chloe

Smith, Henry

Smith, Julian

Smith, Sir Robert

Soames, rh Nicholas

Soubry, Anna

Spelman, rh Mrs Caroline

Spencer, Mr Mark

Stanley, rh Sir John

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stunell, rh Andrew

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Swinson, Jo

Tapsell, rh Sir Peter

Teather, Sarah

Thornton, Mike

Thurso, John

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Walker, Mr Charles

Walker, Mr Robin

Wallace, Mr Ben

Ward, Mr David

Watkinson, Dame Angela

Weatherley, Mike

Webb, Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Wiggin, Bill

Willetts, rh Mr David

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Williamson, Gavin

Wilson, Mr Rob

Wilson, Sammy

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Yeo, Mr Tim

Zahawi, Nadhim

Tellers for the Noes:

Mr Robert Syms

and

Karen Bradley

Question accordingly negatived.

17 Apr 2013 : Column 365

17 Apr 2013 : Column 366

17 Apr 2013 : Column 367

17 Apr 2013 : Column 368


Clause 200

Bank Levy: rates from January 2013

Chris Leslie: I beg to move amendment 2, page 118, line 22, at end add—

‘(14) The Chancellor of the Exchequer shall review the possibility of incorporating a bank payroll tax within the bank levy and publish a report, within six months of the passing of this Act, on how additional revenue raised would be invested to create new jobs and tackle unemployment.’.

The Temporary Chairman (Mr David Amess): With this it will be convenient to discuss clauses 200 to 202 stand part.

Chris Leslie: We now turn to the issue of bank taxation. Amendment 2 seeks to commission from the Chancellor a review of the possibility of incorporating a bank payroll tax within the bank levy and the publishing of a report, within six months of the passing of the Finance Act, on how additional revenue raised would be invested—in particular, to create new jobs and tackle unemployment.

Our approach to bank taxation cannot be looked at in isolation from the economic consequences caused by the banking crisis or from the deficit left for the taxpayer as a result of the failures of the UK banking system. Despite signs in 2012 that the recovery was under way, the extreme-austerity path pursued by the Chancellor has led to stagnation and falling living standards, as well as to growth of only 0.8%, compared with the 5.3% that was promised at the 2010 spending review, and to downgraded forecasts for this year and next year. On top of that, wage levels are flatlining at a time of inflation, resulting in real-terms wage cuts for millions of people, and millions more are struggling to find work in the first place. The typical family is worse off by £891 a year as a result of the cumulative effect of the decisions taken since 2010.

5 pm

Our amendment offers a new route for the economy and a policy decision that the Chancellor of the Exchequer should take, focusing in particular on the bank bonus tax that ought to be implemented. Only today the International Monetary Fund has warned the Chancellor that he should change course and we have learned that unemployment levels are soaring—70,000 more people are now on the dole compared with last month, youth unemployment has risen by 20,000 and long-term unemployment is up yet again. [Interruption.] The Economic Secretary may not have seen the statistics, but the complacency he voices from a sedentary position is appalling.

Despite all those problems, there was little attempt in the Budget to suggest any solutions. The Office for Budget Responsibility considered the cumulative effect

17 Apr 2013 : Column 369

of all the Budget’s measures and said that its impact on growth in 2013 would be negative and that growth would retrench.

At the same time that this Government are presiding over a millionaires’ tax cut, ordinary people are being hit from all sides. Middle and low earners will be hit hardest, while those who need it least will get the big payouts. According to the Institute for Fiscal Studies, the average single parent in work will be worse off by £1,225 and couples with children where both parents work will be worse off by £1,869. At the same time, hundreds of bankers earning more than £1 million will get an average £54,000 tax cut, according to some of the latest analysis, which I will come to in a moment. All this is from a Chancellor who said in his 2012 autumn statement that we have to have

“a tax system where the richest pay their fair share”.—[Official Report, 5 December 2012; Vol. 554, c. 877.]

He obviously has a very different idea of what “fair share” means from the majority of people, who recognise that the Budget measures in this Finance Bill will make life more difficult for the vast majority and much easier for the very rich. That is a disgraceful state of affairs.

The Government’s unfairness is not just about the millionaires’ tax cut, so we felt it necessary to table this amendment, which asks the Chancellor to reconsider his approach to bank taxation. The Chancellor has been consistently weak and reluctant to make banks pay their fair share. Despite their promise to the contrary, the Government’s Financial Services (Banking Reform) Bill has failed to implement fully the structural reforms recommended by the Vickers report, which are vital for our long-term economic interests.

On top of that, the Government’s bank levy has raised far less than the £2.5 billion they promised. In the financial year just ended—2012-13—the bank levy raised just £1.6 billion, from which a further £200 million has to be deducted because of the generosity of the corporation tax cut that the Chancellor has lavished on the banks. All in all, the banks have paid £1.1 billion less than they were supposed to pay in the last financial year. This is a tremendously generous Chancellor, but only to the banks.

Andrew Gwynne: Was my hon. Friend as amazed as I was at the corporation tax figures produced by Her Majesty’s Revenue and Customs? We were told—indeed, the Chancellor informed the House—that the corporation tax cut would be offset by the Government and that there would be no benefit to the banks.

Chris Leslie: This is the curious thing about the Government’s approach to the bank levy. They have consistently said, “Don’t worry, we’ll set the rate”—let us bear in mind that the levy is a charge on the balance sheets and a proportion of a certain set of liabilities—and said that it was designed to yield £2.5 billion, so it has taken some doing for the Treasury to have managed to net only £1.6 billion in the past year and to get the bank levy so wrong. If it had been my hon. Friend’s constituents who were due to pay a certain level of tax through PAYE or national insurance, does he imagine that the taxman or Treasury would have been so lax and said, “Oh, don’t worry, we’ll let you off that massive liability for the time being”? That is essentially what the Minister and his colleagues in the Treasury have been doing and saying to the banks.