Council Tax and Second Homes

Debate between Bob Stewart and Derek Thomas

Tuesday 26th June 2018 Commons Chamber

[Bob Stewart (Beckenham) (Con)]

rose—

[Derek Thomas]

I will give way first to my colleague from St Austell and Newquay.

[Derek Thomas]

That is a completely fair point, and I will be addressing it later. I have had meetings with people in St Ives town, where this has been a particular issue and where bins have been removed because the council has deemed them to have been abused by holiday let owners. This has resulted in residents who are paying council tax having nowhere to put their rubbish.

[Bob Stewart]

I was going to make exactly the same point, so I shall shut up and sit down.

[Derek Thomas]

I am quite impressed by that intervention. It was quite a thing to hear, and I am sure that it will go on public record and that people will refer to it in future.

I have raised this issue with the Chancellor of the Exchequer since I was elected in 2015. I have raised it with three separate Secretaries to the Treasury, and I raised it once again just a couple of weeks ago in a debate in Parliament. I have a simple ask: every property that has been built as a home should pay council tax. I argue that the Government should close this loophole, allowing the authority to collect the council tax charge to provide public service and enabling the Government to divert cash towards the provision of homes for local families.

I remember—I was a counsellor and a parliamentary candidate in St Ives at the time—when business rate relief was introduced. It was clearly done to support our high streets and, for many, it has had a significant benefit. However, I do not believe for a minute that that relief was ever intended to create a route to enable a homeowner to avoid paying council tax, or business rates when a property is used as a business. Do not get me wrong: I am well aware of the contribution that tourism makes to the economy of Cornwall and Scilly—to the local economy, through the jobs it provides and through all the contributions that allow our high streets to have a fighting chance of survival—and I recognise the role that holiday lets play in supporting the sector. I am not seeking to oppress the tourism sector but to install some fairness in the housing system and identify some much-needed cash that can be used to provide the homes that my constituents and constituents across Cornwall need.

[Derek Thomas]

That is why I believe that this is an opportunity for the Government to simplify council tax. If they know that every property built as a residential property is due for a council tax charge, surely that simplifies it. What the Government then decide to do about whether the properties are registered for business rates or not should be left to someone far brighter than I am. I am glad that I have two Cornish colleagues in the Chamber and that other Cornish colleagues support this campaign—

[Bob Stewart]

Not just Cornwall—

--- Later in debate ---

[Derek Thomas]

No, not just Cornwall, but we work closely together as a team, fighting for Cornwall in all sorts of ways. I am proud to be in a county where the six MPs work so closely together on such important issues, helping us to maintain good local communities and a fair society.

I am also asking the Government to see what powers local authorities can be given to collect an additional council tax premium of up to an additional 100% from second homes that would be ring-fenced for investment in local housing stock. These powers are already available to authorities for empty homes and it may be sensible to extend them to second home owners given the pressures on authorities to provide housing for local families. If the money is collected from second home owners and used to build homes for local families, that would do a great deal to create harmony and unity in our communities.

I know from the second home owners who live near me—down the lane on which I live, three of the nine properties are owned by them—that they buy properties in Cornwall because they love the communities, want to contribute to those communities and want to be part of the life there while they are on a break. I know that they want good public services, so I do not believe for a minute that they would object to contributing more if the Government were to allow local authorities to do that in a sensible and proactive way.

Earlier this year, I met the then Secretary of State for Communities and Local Government with the Council of the Isles of Scilly, where there is a real problem with second homes—195 properties in a community of just 2,200 people are locked up and often visited for only a few weeks a year. That has a depressing effect on the housing market, so when the council looks to create skilled jobs and attract nurses and people to work in schools and public services, housing is not available for them. The council has asked to be able to increase council tax on second homes by much more than 100% to free up the property market and start making houses available for the people who are needed to work on the islands.

[Bob Stewart]

For the vast majority of the year, perhaps six months, holiday lets are empty. Surely, as things stand, council tax can be put on the properties when they are empty.

[Derek Thomas]

As the rules stand, if a property is advertised for let for a certain number of weeks a year, it can be registered as a business and exempted from council tax and business rates. It is not necessarily required for people to be in the building during that time, as long as it is advertised as available for let. My hon. Friend is right, but I do not want to complicate the issue further. Simply saying that council tax is applicable to every house built for residential purposes would reduce many of the headaches that people might have at the moment.

The other additional benefit of applying council tax to every property is that communities like Steve and Mousehole. [Laughter.] I say “Steve” because of your point earlier. Sorry, not your point, Mr Speaker—although it was a good point you made—but the point made by my hon. Friend the Member for St Austell and Newquay (Steve Double).

The other additional benefit of applying council tax to every property is that communities like St Ives and Mousehole, which have a large number of holiday lets, could benefit from simplified and inclusive waste collection. Currently, because of the concern that the users of second homes in places like St Ives are abusing the system and using the bins provided for genuine local residents who pay council tax, Cornwall Council has removed some of the bins and is refusing to collect some of the rubbish.

Recycling, refuse and how we look after waste is a big issue in St Ives, and I have a big meeting on Friday to identify the issues. The local community will put forward a plan and I will work with Cornwall Council to deliver it. I have been working on the situation for three years, and bins that were available for residents who pay council tax have been taken away because it was deemed that they were being abused by people who own holiday lets and local restaurateurs, which has caused real hardship for elderly people. In parts of St Ives, and in other parts of my constituency where holiday lets are numerous, the people who are left are often older people who are less mobile, and they are having real difficulties in getting rid of their rubbish.