Stirling MP Slams £3.3 Billion Stamp Duty Freeze

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Categories: Coronavirus (COVID-19), Economics, Governance, Local Business, UK Government (Westminster)

SNP MP Alyn Smith has criticised the UK government’s decision to use borrowed money to freeze stamp duty, whilst many businesses, workers, and freelancers are left unsupported throughout the pandemic.

The House of Commons Library has confirmed the total cost of the freeze to be £3.3 billion.

Last year, the UK government froze stamp duty for many by raising the liability threshold to £500,000 and England and Northern Ireland. The freeze will last until 31st March this year.

Mr Smith raised this with the Prime Minister today (Wednesday) following his statement to the Commons on Coronavirus, asking if Mr Johnson regrets prioritising subsidies for middle-class domestic property buyers and sellers whilst “excluding many people, small companies, freelancers, in the productive economy who do really need support.”

Commenting, Alyn Smith MP said:

‘This is yet more evidence that the UK government’s priorities are absolutely not where they should have been when dividing up borrowed funds to see us through this pandemic crisis.

‘There are many areas where myself and my SNP colleagues have welcomed some of the vital lifelines brought in to support businesses and workers, but this is an unnecessary measure, benefitting people that really don’t need to be subsidised.

‘I have spoken to many workers and business owners who have fallen through the cracks in the government’s support, and have been left with nothing. For many, the hardship of not being able to operate fully – if at all – has gone on since March last year, and their situation is getting more desperate every day. These are the people that could have benefitted from £3.3 billion in government support, instead of it subsiding house purchases for people looking to buy homes up to the value of half-a-million pounds.

‘It’s time that the UK government gets real about who needs support and who doesn’t. The rollout of the vaccination programme will take time yet, and the money that the UK Treasury is borrowing needs to be used to help those who really need it.

Notes

House of Commons Library response to Alyn Smith enquiry on cost of Stamp Duty Freeze:

The most recent estimate we have of the total cost is from the OBR’s Economic and fiscal outlook for November 2020. Table A.5 estimates the total cost of the measure as £2.3 billion in 2020-21 and £1.0 billion in 2021-22, for a total cost of £3.3 billion.

All figures for the cost of the stamp duty freeze will necessarily be estimates at this stage, because the total cost depends on the number of transactions that benefit from the freeze. The OBR’s estimate is higher than their initial estimate of £2.5 billion because of the recovery in the housing market (see paragraph A.14 of the same document), so this does take some recent data into account; however, we do not have figures for the exact cost so far. There may be updated figures in the next OBR release alongside the Budget in March.