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Treasury Questions


16th June 2015

Speaking in Treasury Questions in the House of Commons, Harriett answers questions from back bench MPs on supporting savers and promoting home ownership

Saving and Home Ownership

8. Alan Mak (Havant) (Con): What steps his Department is taking to (a) support savers and (b) promote home ownership. [900327]

13. Iain Stewart (Milton Keynes South) (Con): What steps his Department is taking to (a) support savers and (b) promote home ownership. [900332]

The Economic Secretary to the Treasury (Harriett Baldwin): The Government stand firmly on the side of people who want to work hard, save up, buy their own homes, and retire with dignity. We have increased allowances for individual savings accounts, introduced the Help to Buy scheme, pensioner bonds and pension freedoms, and taken 95% of people out of tax on their savings.

Alan Mak: Alongside the support that has been introduced over the last five years, maintaining a strong economy and low interest rates is one of the most important ways of helping home owners. Can my hon. Friend assure my constituents in Havant that the Government will continue to ignore the Opposition’s calls for more taxes and more spending, which put our economy at risk and make it harder for people to get on to the housing ladder?

Harriett Baldwin: What a pleasure it is to welcome my hon. Friend to the Chamber. He is absolutely right: more people are employed than ever before, and mortgage rates are extremely low. As a result of our long-term economic plan, my hon. Friend’s constituents in Havant, and constituents elsewhere, can now aspire to own their own homes one day.

Iain Stewart: Policies such as Help to Buy have proved very popular in my constituency, but may I urge my hon. Friend to be more ambitious in the longer term? Will she consider expanding the shared-ownership model, which enables people to take an initially small equity share in a property at the start of their careers, and then save up in order to expand it as their careers progress?

Harriett Baldwin: I congratulate my hon. Friend on the strong endorsement he received from the voters of Milton Keynes to return here and express their interests. I am very pleased to hear Help to Buy is so popular in Milton Keynes. The town tops the charts for the attractiveness of buying versus renting. Shared ownership is indeed an excellent way to help people take their first steps on the property ladder, and the Government remain committed to it.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): The Minister talks about housing topping the charts in Milton Keynes, but in my constituency we are in danger of topping the charts in house prices, with the average price now £606,000. That is being fuelled in part by overseas buyers who purchase a property and either rent it out or do not live there. Have the Government any plans to tackle this and help my constituents get on the housing ladder?

Harriett Baldwin: My hon. Friend the Member for Milton Keynes South (Iain Stewart) topped the chart in Milton Keynes personally as well, but the hon. Lady raises an important question: London house prices are a key issue for her constituents. That is why the Government have brought in so much support to increase the number of affordable homes. The number of social homes and affordable homes increased by over 200,000 in the last Parliament. We are committed to continuing that great work and to bringing in the concept of starter homes, which we hope will add further to housing supply.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): I genuinely welcome the Minister to her post, but I ask her to be very careful about the right to buy housing association properties. Will she look across at cities such as Paris, where people on low incomes have been driven out and live in ghettoes many, many miles outside the city? If we do not build more social housing that is available to lower income people, that will happen in our cities.

Harriett Baldwin: I am sure the hon. Gentleman—who kindly welcomes me to my place—will welcome the fact that more social housing was built in the last Parliament than in the entire 13 years of the last Labour Government. He rightly raises a point about housing associations: we must allow more supply of housing association properties. That is why this Government will bring in the right to buy for housing association tenants, which will enable more capital to come into that sector and more housing association properties to be built.

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Home Ownership

11. Mrs Maria Miller (Basingstoke) (Con): What steps his Department is taking to promote home ownership. [900330]

The Economic Secretary to the Treasury (Harriett Baldwin): The Government are taking a range of steps to promote home ownership, including helping almost 100,000 households through the Help to Buy scheme. The Government have extended the Help to Buy equity loan to 2020, introduced a Help to Buy ISA and extended the right to buy, and we are delivering 200,000 new starter homes.

Mrs Miller: Hundreds of Basingstoke residents have a home of their own because of this Government’s Help to Buy policy. What assurances can the Minister give today that Help to Buy will continue into the future, because we are currently putting together our local plan, which includes a commitment to more affordable housing?

Harriett Baldwin: I can give my right hon. Friend the assurance that the Government want people who work hard and want to buy their own home to enjoy the security of owning their own home. The equity loan scheme will last until 2020, which should support another 120,000 households in Basingstoke and elsewhere to get on to, and up, the housing ladder. In addition, as my right hon. Friend the Chancellor announced in his recent Budget, the Help to Buy ISA is expected to help over 1 million first-time buyers save for a deposit.

Wes Streeting (Ilford North) (Lab): The Government’s policies were not popular in every part of the country, in particular in my constituency. May I therefore ask the Minister, as this has been a week for U-turns, to listen to the National Housing Federation, the CBI and the Institute for Fiscal Studies and revisit right to buy for housing association stock, which will lead to a decrease in the availability of affordable homes for rent, and to deal instead with the fundamental problem of housing supply?

Harriett Baldwin: I welcome the hon. Gentleman to the House. This Government are firmly on the side of those people who want the right to buy their own properties, and that includes extending the right to buy to housing association properties. Perhaps he will agree with the right hon. Member for Birkenhead (Frank Field), who published a report with the Institute for Public Policy Research in recent years calling on his party to do exactly the same thing.

Julian Knight (Solihull) (Con): Many hard-working homeowners in my constituency take in lodgers to meet their mortgage repayments. However, the rent-a-room tax-free threshold has remained unchanged at £4,250 a year since 1997. Now that the deficit is being paid down, would it not be a positive step to help aspirational homeowners by raising the rent-a-room tax-free threshold?

Harriett Baldwin: I welcome my hon. Friend to the Chamber. He clearly brings a wealth of experience in this area, and he is right to highlight the fact that people who rent out a room can receive the first £4,250 tax-free. I note the point that he has made. My right hon. Friend the Chancellor of the Exchequer is sitting beside me and he will no doubt take that as a Budget submission and consider it as part of that process.

Fiona Mactaggart (Slough) (Lab): Following on from that question, one aspect of the tax gap that everyone admits is part of the problem is the collection of tax on rental properties. Will the Minister confirm that there will be a Treasury study on how to deal with the tax gap on rental properties, in order to find out how big it is and how we can challenge it?

Harriett Baldwin: The right hon. Lady is right to highlight that point. It is important to recognise that although the first £4,250 of rent is covered by the allowance, once it goes above that level it becomes taxable income. HMRC is constantly looking at ways in which it can improve the collection rate in that area.

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