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Finance (No. 2) Bill

The hon. Gentleman makes an excellent point. We discussed in earlier debates how to stimulate housing, but not just in the south-east where there are enormous stresses and strains. My hon. Friend the Member for East Surrey (Mr. Ainsworth) alludes on his website to the fact that there is already far too much house building in the south-east. If we want to stimulate such building out in the regions— I see that I have finally got the attention of the Economic Secretary—I suggest that we follow Schumpeter’s principle that small is beautiful. If we want to encourage regional housing developments that tend to be smaller, the particular residential housing required is more likely to be of the right size to be on AIM, but not to have the wherewithal, facility or finances to list on a fully listed stock exchange. The then Economic Secretary repeated a commitment in Committee of the whole House:"““We are willing to consider any consequence of market developments…We must always be willing to consider whether we want to change the regime in the interests of the market and clearly not to the disadvantage of the Exchequer.””—[Official Report, 3 May 2006; Vol. 445, c. 1041.]" I would be interested to know whether the current Economic Secretary is still willing to be open minded about the matter. Perhaps he would like to intervene? I guess not. As AIM listing will have no adverse impact on the Exchequer—I recognise that the Economic Secretary and the Chancellor are concerned about that—will the Economic Secretary give a commitment at least to review the listing requirement in response to the lack of expected take-up from the residential property sector? That is all we ask. We want the Economic Secretary to be open minded and watch how the market develops. If the Government are not achieving their aims of stimulating the residential, not simply the commercial side, for REITs, we ask them at least to take an open-minded approach. It is worth considering the comments of my hon. Friend the Member for Rayleigh (Mr. Francois) in Committee, when he gave a good analysis of the benefits of AIM. I must quote his thorough analysis in full. He stated:"““AIM-listed companies already provide a legitimate form of collective investment, so why have the Government decided to exclude them from the REIT regime from the start?””" The Economic Secretary never answered that. My hon. Friend continued:"““On a practical level, property companies that are registered as REITs are likely to enjoy significant tax advantages over those—usually smaller—companies that are denied the advantages that REIT status confers. There could therefore be considerable consolidation in the market as REITs take over other property companies such as those on AIM””—" my hon. Friend made that point again earlier today—"““which cannot qualify for REIT status. That is potentially unfair””." I know that the Economic Secretary views fairness as an important criterion when considering such matters. My hon. Friend continued by saying that, over time, that inability to qualify"““could mean that the UK property market was increasingly dominated by a relatively small number of large REIT companies. I presume that the Government did not intend that. We would move in the direction of an oligopolistic market and I am not sure that Ministers want that.""Moreover, AIM-listed companies might come under pressure to convert to a full stock exchange listing before they were ready for it, principally to qualify for REIT status, thus potentially causing a distortion in the orderly evolution of the market sector. Why not, therefore, expand the condition to cover at least AIM-listed companies””?" My hon. Friend makes that point time and again. He was dogged—indeed, almost terrier-like—about it. He continued by saying that expanding the condition would"““thus facilitate greater diversity in the REITs market available to investors… There is a strong common-sense argument for doing that.””—[Official Report, 3 May 2006; Vol. 445, c.1026.]" I agree with that.