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Holiday and Second Homes Regulation: Cornwall and Isles of Scilly
23 October 2024
Lead MP
Andrew George
St Ives
Lib Dem
Responding Minister
Alex Norris
Tags
EconomyTaxationHousing
Word Count: 4225
Other Contributors: 9
At a Glance
Andrew George raised concerns about holiday and second homes regulation: cornwall and isles of scilly in Westminster Hall. A government minister responded.
Key Requests to Government:
The MP asks the government to conduct an impact assessment on changes to council tax arrangements for second homes and to clarify future plans regarding small business rate relief. He also requests that the Government be clear about how a registration scheme will work, including levels of verification and inspection required by local councils.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The MP is concerned about the impact of holiday and second homes on local communities in Cornwall and the Isles of Scilly, highlighting the disparity between earnings levels and house prices. He mentions that over £500 million of taxpayers' money has been given to holiday home owners under tax incentives, including small business rate relief and covid aid. The MP also notes that there are nearly 14,000 second homes and more than 11,000 properties registered as short-term lets in Cornwall.
George Eustice
Con
Camborne and Redruth
The MP acknowledges the issue's importance but notes that hotels and guesthouses also compete with holiday lets without similar incentives. He mentions challenges faced by those living in informal settings due to a lack of affordable accommodation.
Easington
The MP highlights the significant impact of small business rate relief on property investment in holiday lets, suggesting that local authorities might switch from council tax to business rates due to incentives like 70-day occupancy restrictions.
Jayne Kirkham
Lab Co-op
Truro and Falmouth
She suggested considering giving local authorities a suite of powers so they can choose which solutions would best suit their specific circumstances.
Jim Shannon
DUP
Strangford
He commended the hon. Member for securing the debate and highlighted the need to balance tourist potential with ensuring housing stock is available for local residents.
Marie Goldman
Lib Dem
Chelmsford
She agreed with her hon. Friend that second and holiday homes significantly impact the hospitality sector by making it difficult to find accommodation for staff in areas like Cornwall and the Isles of Scilly.
Nic Dakin
Labour Co-op
Scunthorpe
The MP supports the lead speaker's concerns about the impact of holiday homes on housing availability, mentioning over 20,000 families in Cornwall are on the local housing register.
Noah Law
Lab
St Austell and Newquay
We need a proper licensing regime for holiday lets as the furnished holiday lets tax regime ends to ensure homes coming out of it do not operate unsafely, requiring mitigation or transitional arrangements.
Perran Moon
Lab
Camborne and Redruth
In discussions with various sectors, he questioned whether dealing with holiday and second homes was the highest priority in Cornwall, emphasizing that this issue affects not just coastal areas but inland towns as well. The issue of second homes in Cornwall is not uniformly faced across the south-west, highlighting the key role of local authorities if they have the powers to deal with it.
Steffan Aquarone
Lib Dem
North Norfolk
He agreed that local councils should be given greater powers to ensure second home owners contribute towards mitigating the impact of these homes on local communities, beyond just council tax or business rates. This issue is a problem in many places, but within North Norfolk some villages suffer up to 50% second homes impacting temporary accommodation for the homeless.
Government Response
Alex Norris
Government Response
It is a pleasure to serve under your chairship, Sir Christopher, and it is a pleasure to respond to such an excellent speech by the hon. Member for St Ives (Andrew George). This is our first opportunity to work together because I was elected after his sabbatical commenced, and I am very much looking forward to working with him in the spirit with which he ended his speech. I thank other Members who have contributed to the debate, and I will try to cover the points raised as I go. From what the hon. Member for St Ives said, as well as the previous debate raised by my hon. Friend the Member for Cities of London and Westminster (Rachel Blake), it is clear that having a high concentration of second homes and/or short-term lets brings significant challenges to those communities—indeed, they may be the biggest challenge, as my hon. Friend the Member for Camborne and Redruth said. Therefore, they are passionately advocating for effective regulation. I hope this is seen as a virtue, not least because we are a new Government, but those who follow the debates on this issue will know that we are actively considering the best course of action to help local authorities. I have not read the debate from 24 years ago. I confess to colleagues that as well as watching TV on a Saturday night, I will read old debates; I love the old transcripts. It is amazing to see how some debates evolve, and there is also always excellent content that perhaps one could pass off as their own, certainly if they went back far enough to not be detected—not that I would ever do that, of course, Sir Christopher. This issue bumps up against a housing crisis with years of low house building, and rising interest rates that have made home ownership unattainable for many people. It is a core mission of this Government to address that challenge. The issue is more acute in places such as Cornwall and the Isles of Scilly and other coastal, rural and urban communities, where it is exacerbated by the proliferation of second homes and short-term lets. Cornwall and the Isles of Scilly are undoubtedly some of the most beautiful areas not just in the country but in the world, and are therefore popular choices for tourists. However, that has real consequences for local residents—whether it is high prices relative to earnings, people being pushed out of the choice of home ownership or having to leave their community, a stretched private rented sector with significant pressure on local economies, families and communities, or steadily growing housing waiting lists. The hon. Member for Chelmsford (Marie Goldman) talked about the self-defeating cycle. During the passage of the Levelling-up and Regeneration Act 2023, her colleague, the hon. Member for Westmorland and Lonsdale (Tim Farron), spoke thoughtfully and passionately about the challenge of people going to a beautiful community for a week or weekend, and then going to the pub and not being able to get food because the chef has nowhere to live. These things will eventually impact the quality of the offering and therefore perhaps its attractiveness. Yes, that is right, not least because once we get to that tipping point, the consequences can be profound and rapid. Of course we need action today, and I will speak about that. One of the many important things that the hon. Member for St Ives said was that this is not about envy; he made a good point about balance. What his community and colleagues' communities are asking for is a recognition of balance. They want to have a thriving tourist sector, but they need to be a place where people can live and where the consequences of those who make significant profits are shared fairly. It is about finding that balance and we have not got there yet, which relates to his point. I want to talk about some of the issues and housing demand itself. That is an excellently made point. I always wonder which of these debates attract people watching online; I suspect this might be one of them, and I hope that people have heard that message. We are talking about finding that fair balance, but I am sure we all agree that we have not found it yet. That is a thoughtful, well-made point. We must make sure that we have thought things through so that there are not unintended consequences, which could cause significant harm. I will come to the furnished holiday lettings regime, but I want first to talk about the register, because the hon. Member for St Ives made his kind offer of help from Cornwall. I will certainly raise that with colleagues. The lack of data and the limitations on what the data can tell us can create challenges. We need that registration scheme. The Department for Culture, Media and Sport is leading on that, but we are working with it on the process. The Department is working at pace to operationalise the scheme as soon as possible, but it is important first to ensure that it works. To update colleagues, it is currently in the initial phase of digital development, and that is enabling us to test and refine possible options for design and delivery. We know there is eagerness and we will update the House again as soon as possible, but that kind offer has been heard by me and officials. It is sad to make a debate about beautiful parts of the world about tax, but I am afraid that tax is an important part of this. We have committed to end the furnished holiday lettings tax regime from April next year, which I think will be welcomed. Doing so will take away certain advantages that incentivise short-term, rather than long-term, letting; that is the right thing to do. As the hon. Member for St Ives said, the premium of up to 100% on second homes will come in from next April. It is a discretionary power, but I think local authorities will be keen to use it. The hon. Gentleman talked about going further; he might have to let us have a go with the scheme as it is first before we do that, but we are mindful that the premium is up to 300% in Wales, so we will consider the impact of that. That money can be spent on local services, to address the hon. Gentleman's point. We are conscious that colleagues in this place and beyond still think we could go further, and we are looking at the tax treatment and keeping it under review. We will consider the additional powers that local authorities may need, but given that we have novel powers in this space, it is handy to for them to be used. Briefly, because we are running out of time. Yes, that is very much my world view. Colleagues will see from my time in the Department that my emphasis is on getting the right powers and resources to communities to use in the way in which they know will work best, because colleagues in this room are experts on Cornwall in a way that I am not. I see my responsibility as giving them the tools. On the concern regarding attempts to game the heightened council tax payment, the system includes criteria on the number of days that the property has been let out for holidays, and we will monitor, and are mindful of, the functioning of those criteria. The hon. Member for St Ives also asked about small business rate relief. He would not, in the spirit of our new working relationship, want the Chancellor to smite me just seven days before a fiscal event, so I am afraid he will have to wait. He also mentioned people being removed from their homes so that the property can be let out. That is why I am sure we will get significant cross-party support for the Renters' Rights Bill, particularly for ending section 21, or no-fault, evictions. Finding that balance and giving renters that protection is important everywhere and clearly in his community. We must also increase supply. The Government have made significant commitments by which we will be measured: on the building of new homes, on unblocking stalled housing, and on building new towns in the fullness of time. We want this country to be a place where people can own their home if they wish and where they do not have to leave their community to do so. I appeal for colleagues to work with their local authority, as I am sure they will, on their local plans to ensure that those plans are thoughtful, sensitive and written with an understanding of the community. This is an exceptionally important issue, which is changing the character of, and creating challenges in, some of the most beautiful parts of our country and indeed the world. The Government want to work with those communities to find the right balance—that has been the theme of this debate. I have mentioned some of the things we are doing already, and we are committed to working with the hon. Member for St Ives and colleagues across this House.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.