Holiday and Second Homes Regulation: Cornwall and Isles of Scilly

Alex Norris Excerpts

Wednesday 23rd October 2024 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Alex Norris)]

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 know that there is a lot of interest in this area; I have spoken to my hon. Friends the Members for Camborne and Redruth (Perran Moon) and for Truro and Falmouth (Jayne Kirkham) a lot over the years about this, and I know that there is cross-party interest. I always think working in the spirit of Chris Mullin is a very wise idea, and I think we will work in that spirit. The hon. Member for St Ives certainly will not see any complacency from me and my colleagues. 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 will talk about some of the things we are doing now, in the spirit of wanting to ensure that we go further.

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.

[Steff Aquarone]

This issue is a problem in many places, but even within places like North Norfolk, there is not even distribution. We have an overall figure of one in 10 homes being second homes, but some villages suffer up to 50%, which has an impact on temporary accommodation for the homeless. Does the Minister accept not just the circumstances but the urgency of the need for these measures?

[Alex Norris]

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.

[Andrew George]

I just want to re-emphasise that many people who own second homes in Cornwall make a significant contribution to the local community, and indeed a financial contribution, because they recognise the impact of their privilege. As I say, this is not about envy, and a lot of those who own second and holiday homes are conscious of the impact.

[Alex Norris]

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.

[Noah Law (St Austell and Newquay) (Lab)]

Although we can all agree that the politics of envy need not play into this discussion, and that we need a proper licensing regime for holiday lets as the furnished holiday lets tax regime ends, does the Minister also agree that we ought to ensure that the homes coming out of that regime do not end up flying under the radar, and in some cases operating unsafely? We need also to look at mitigation or transitional arrangements for that industry to ensure that bona fide holiday businesses in the sector can continue to operate and we do not produce the opposite effect from what is intended with these reforms.

--- Later in debate ---

[Alex Norris]

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.

[Perran Moon]

Will the Minister give way?

[Alex Norris]

Briefly, because we are running out of time.

[Perran Moon]

Does the Minister agree that the issue of second homes and holiday homes in Cornwall and the Isles of Scilly is not uniformly faced across the entire south-west, and that the role of the local authority in dealing with this issue, if they have the powers to do so, is absolutely key?

[Alex Norris]

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.

[Sir Christopher Chope (in the Chair)]

I did not wish to take time out of this short debate, but I remind Members of paragraph 30 of “Rules of behaviour and courtesies in the House of Commons”, which was issued by Mr Speaker:

“Men are expected to wear a tie”.

Motion lapsed (Standing Order No. 10(6)).