Business organisations reiterate call for devolution of Stamp Duty

Business in Wales met with representatives of the Welsh and UK Governments, including Jane Hutt, the Welsh Minister for Finance, today to further discuss the devolution of Stamp Duty Land Tax.  The UK Government is consulting with business before reaching a decision and Federation of Master Builders (FMB Cymru) and CBI have both reiterated their support for this tax to be devolved.

The CBI and FMB Cymru have been working closely with the Silk Commission and the Minister on the issue of Stamp Duty Land Tax.  Both organisations agree that, if used effectively, devolution and reform of stamp duty could be an effective tool for growth.

Richard Jenkins, Director of FMB Cymru said:

“The Welsh housing industry has been one of the worst hit during the recession and is struggling to recover. Stamp Duty has the potential to add a much needed injection of growth into the market, at a time where costs of development are set to increase. The Welsh Government already has responsibility for land and housing, and stamp duty land tax if used correctly could be an important tool to increase activity in the housing market.

“Our view is that Stamp Duty Land Tax should be devolved to the Welsh Government as a matter of urgency and that there should be a clear timeframe set for this process.  Clear mechanisms need to be agreed and put in place for business to continue to be consulted during the process of devolving the power, and continue to be consulted regarding the most effective way to use this power once it is devolved to ensure it is a progressive tax.”

Emma Watkins, Director of CBI Wales Chaired the meeting at Cathays Park today. Following the meeting she commented:

“CBI members had a constructive discussion today with Treasury and Welsh Government officials on stamp duty devolution. As was clear from this morning's meeting, business engagement is critical to achieving successful devolution and reform of the stamp duty land tax regime in Wales.

“A stronger housing market benefits everyone and a reformed SDLT regime, tailored to Welsh needs, that attracts investment to Wales by increasing market activity is within our reach. To ensure market confidence and business certainty, this is a journey business and government must continue to take together.  CBI looks forward to working closely with the Welsh Government on this process."

Jane Hutt takes opportunity to discuss reform of Stamp Duty with construction sector

Richard Jenkins, Jane Hutt AM, Francine Morgan and Marc Jehu

Finance Minister Jane Hutt today took the opportunity to discuss the devolution of stamp duty to Wales with representatives from the Federation of Master Builders Wales and Jehu Project Services when she visited the Royal Buildings development in Port Talbot.

When completed the Royal Buildings site will consist of 46 affordable rented flats and four retail units. Jehu Project Services , part of the Jehu Group have been appointed as the main building contractor for the project.

Following a tour of the site Jane Hutt said:

“In the current economic climate, the need to boost jobs and growth is the Welsh Government’s first priority. The steps we are already taking - both by using the powers we currently have, and also through our use of European funding – are playing an important role in supporting economic recovery.

“But we want to do more, and the housing sector and the wider construction industry have an absolutely vital role to play. That is why I believe it is so important that powers over stamp duty land tax should be devolved to Wales.

“In my meetings with the construction sector, I have been struck by the strength of the consensus that exists in favour of devolving and reforming stamp duty. If we were to gain powers over this tax, I am certain that we would be able to reform it in a way that made it simpler, fairer and more efficient – benefiting both home builders and home buyers, and boosting this key sector of the Welsh economy.

“I believe that this view will come through loud and clear in the UK Government’s ongoing consultation about devolving the tax, but I would encourage everyone involved in the industry to make a submission to the Treasury’s consultation.”

During her visit the Minister also discussed the recently published Construction Procurement Strategy. Jane Hutt added:

"Investing in construction provides a great opportunity to deliver much more than new buildings and roads. By applying intelligent and innovative procurement strategy and policy, we can use this investment to help provide jobs, training and contract opportunities which is key to our agenda to support jobs and growth in Wales.”

Richard Jenkins, Director FMB Cymru said:

"We welcome the Minister taking the time to speak to FMB members directly on important issues such as procurement and the Stamp Duty Land Tax. Our policy on SDLT is clear - the devolution of this tax is vital, and as it has been recommended already by the Holtham and Silk Commissions, the UK Government should devolve the powers to Wales without delay. The construction sector could benefit greatly by this tax if it could be tailored to suit the needs of the Welsh construction and business sector."

Marc Jehu, Managing Director at Jehu Projects, said:

“The Royal Buildings project is nearing completion and has played a significant part in Jehu Group’s success in the past year. It has also provided job security and additional new jobs. Once completed, the site will provide fantastic homes for individuals or families, in addition to a platform for small businesses to grow.

“With a house building company within the Jehu Group, we would welcome reduction in stamp duty on homes in the entry level of the market, provided it is not off set by increases in middle and higher end of the market. Wales is woefully short of quality executive homes as well as affordable homes and if we are to attract companies into Wales, we need to offer appropriate homes. We look forward to participating in the consultation process.”

BUSINESS ORGANISATIONS AGREE VIEW ON DEVOLUTION OF STAMP DUTY

Richard Jenkins, FMB Cymru

The UK Government's Commission on Devolution in Wales ('Silk Commission') has recommended the devolution of certain tax and borrowing powers to Wales, including Stamp Duty Land Tax.  The UK Government is yet to fully respond to its Commission, but has today announced its intention to consult with business before reaching a decision. Jane Hutt, the Welsh Minister for Finance, has also met with business leaders over the last couple of months - to hear business’ initial views on the way that Stamp Duty Land Tax operates at the moment, and how it might be reformed in the future should the UK Government agree to devolve the tax.

The CBI and Federation of Master Builders (FMB Cymru) have been working closely with the Silk Commission and the Minister on the issue of Stamp Duty Land Tax, and will continue to work with the Westminster Government over the upcoming months following their announced intention to consult with business in advance of a decision.

If used effectively, devolution and reform of stamp duty could be an effective tool for growth, as a result both organisations are in support of the devolution of Stamp Duty to the Welsh Government, and that there should be a clear timeframe set for the decisions to be taken. The Welsh housing industry has been one of the worst hit during the recession and is struggling to recover, and Stamp Duty has the potential to add a much needed injection of growth into the market, at a time where costs of development are set to increase.

Richard Jenkins, Director of FMB Cymru said:

“We welcome the Treasury’s intention to seek the views of business on this matter and therefore will make our policy clear. We urge UK Ministers to respond positively to the recommendation to devolve Stamp Duty made by the Silk Commission. 

“Our view is that Stamp Duty Land Tax should be devolved to the Welsh Government as a matter of urgency. The Welsh housing industry is in a poor state of health and Stamp Duty could be used to creatively to support the sector, and to offset the accumulated costs of development, which are set to rise.”

Emma Watkins, Director of CBI Wales commented:

“The views of the CBI are very clear in supporting the devolution of stamp duty.  If used effectively, devolving and reforming stamp duty could be used as a tool for growth, stimulating housebuilding and supporting home buyers. We will engage with the Treasury over the summer and make the views of business known.

“The lack of certainty and clarity on a deadline for Silk is not helping business - both those in Wales and those looking to invest.  CBI will continue to engage with all parties for a swift resolution, in the interests of driving forward the economy - and growth.”

Link to announcement:

http://www.parliament.uk/documents/commons-vote-office/July_2013/17-July-2013/6.Treasury-Devolution-in-Wales.pdf