Council Tax and Second Homes

Debate between Bob Stewart and Rishi Sunak

Tuesday 26th June 2018 Commons Chamber

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

I commend my hon. Friend the Member for St Ives (Derek Thomas) for securing this debate. The issue of second homes is a subject that I know he cares about passionately and has raised repeatedly in the House. It is right that he voices his constituents’ views on this topic, for they deal with the issue of second homes more than most. When we look at the percentage of a local authority’s housing stock accounted for by second homes, we find that the Isles of Scilly ranks second among authorities in England and Cornwall ranks 13th. I have some personal familiarity with this issue, due to the reasonably high prevalence of second homes in my rural constituency of Richmond (Yorks), especially in the Yorkshire Dales national park. As we heard, in areas where the number of second homes comprises a significant proportion of the housing market, there is a risk that local people, particularly those who might be looking for their first home, might be priced out of the local market. There are legitimate concerns about the effect on local services, as well as on community cohesion.

However, it is also important that we do not lose sight of the benefits of second homes: the boost they can give to local economies and the tourism trade. Many local livelihoods will depend on tourism. This Government are not in the business of removing people’s right to choose where they want to purchase property. There can, of course, be many reasons for owning more than one property. Although second homes are frequently referred to as “holiday homes”, they can just as easily be properties that enable someone to work in and contribute to the local economy of an area, while being able to return to a family home in another part of the country on a regular basis.

However, we do recognise the concerns, which have been set out so clearly by my hon. Friend in this debate. As such, I would like to highlight for the House the range of actions the Government have put in place to mitigate the impact of second homes in affected areas and pass on more benefits to local residents. Let me start with the second home discount. The Government inherited a situation where second homes were automatically entitled to council tax discounts. There was a presumption that those who do not use local services for much of the year should pay less, but we shifted away from that approach. From 2013, the law was changed so that local authorities were no longer required to offer council tax discounts in this way, allowing them to target any discounts as necessary, according to their particular circumstances. I am pleased to report that that change has made a difference. Last year, no local authorities still offered blanket exemptions for second homes; nearly a third of billing authorities offered no discount at all on second homes; and, perhaps most clearly, fully 92% of second homes were charged the full rate of council tax.

Secondly, although that was a positive step, we have gone further. Beyond council tax, the Government raised stamp duty rates for those buying second homes. Since April 2016, anyone who has purchased a second home has paid a stamp duty charge of three percentage points above the current rates. Since then, more than half a million people have bought their first home, and first-time buyers now make up an increased share of the mortgage property market. It is worth noting the other significant support for first-time buyers, in the form of the total removal of the need to pay stamp duty on homes worth up to £300,000, which will benefit many people in the constituency of my hon. Friend the Member for St Ives.

Thirdly, the community housing fund is helping to channel funds back into local communities. It has allocated part of the additional revenue raised from the higher stamp-duty rates to areas with the potential to deliver community-led housing. That specifically includes areas with high rates of second-home ownership. Community-led housing is affordable at local income levels and is almost exclusively additional to any housing developed by other sectors, because it is brought forward on sites that would not normally be granted planning permission to speculative house builders.

The community housing fund has provided revenue and capital funding for numerous schemes since 2016, as I have seen at first hand in my own constituency, where the Hudswell community centre used the funds to develop affordable homes for people with local connections to that village. I was delighted to open up the homes and see how the scheme had enabled tenants with strong family ties to the local area to move in. I am aware of other shining examples throughout the country. Indeed, in the first round of the scheme, Cornwall received £5 million to support community housing projects, including the Cornwall Community Land Trust, which I am sure was welcomed by my hon. Friend and others across Cornwall.

Fourthly, through neighbourhood plans, communities have the direct power to develop a shared vision for the future of their areas. Over 590 such plans have been completed so far. The plans allow communities to make decisions on where new homes, shops and offices should be built, what they should look like, and what facilities and infrastructure should be provided. I am delighted that the Government have committed more than £20 million to support communities in the development of neighbourhood plans over the next few years.

Through the neighbourhood-plan process, residents can develop plans that manage second-home ownership of new builds. We are aware that communities in areas such as Cornwall and Northumberland have put in place neighbourhood plans with such restrictions. Indeed, one of the more well-known plans that does exactly that is in my hon. Friend’s constituency of St Ives, where new open-market housing is permitted only where there is a restriction to ensure its occupancy as a principal residence. It is quite right that local residents should have the opportunity to express their views on the design of their areas and ultimately to approve neighbourhood plans via a referendum.

Lastly, my hon. Friend expressed his concern about the possibility that some second-homeowners may be registering their properties for business rates and consequently not paying their share in council tax. Indeed, I have discussed this issue not just with my hon. Friend, but with my hon. Friends the Members for St Austell and Newquay (Steve Double), for North Cornwall (Scott Mann), for Suffolk Coastal (Dr Coffey) and for Totnes (Dr Wollaston), among others.

Holiday lets are a valuable part of the local business landscape in many communities. It is absolutely right that such genuine businesses should pay business rates and, as such, be able to avail themselves of small business rate relief, where appropriate. In the case of holiday-let accommodation, the properties are assessed for business rates rather than council tax if they are currently available for short-term lets for 140 days or more per financial year. This rule is widely understood and provides a clear method of deciding whether a property should be liable for council tax or business rates. It also ensures that properties do not switch between the two systems year to year merely due to success in letting out the property.

However, I assure all hon. Members that the Government take any suggestion of council tax avoidance or gaming extremely seriously wherever it occurs. My hon. Friend the Member for St Ives is absolutely right to point out the potential impact on his area. A reflection of this is that 17% of all holiday lets registered for business rates in England are to be found in Cornwall, and 97% of those have rateable values of £12,000 or below, so may potentially be eligible for small business rate relief.

[Bob Stewart]

I thank both you, Mr Speaker, and my hon. Friend for also allowing me to intervene. Does a business rate raised on a holiday let go to the local council or to central Government? In other words, if it is roughly the same as council tax, does the local council get the same amount?

Mental Health Units (Use of Force) Bill

Debate between Bob Stewart and Rishi Sunak

2nd reading: House of Commons
Friday 3rd November 2017 Commons Chamber

[Rishi Sunak (Richmond (Yorks)) (Con)]

It is a privilege to be called to contribute on this important topic. Many constituents wrote to ask me to participate in this debate, so they will be delighted that I have the opportunity to highlight some of the issues they raised. I commend the hon. Member for Croydon North (Mr Reed), not only for securing this debate and championing the Bill but for the constructive and consensual way he has gone about it.

So much has changed about our understanding of mental health. There was a time when we thought of mental health problems as something that happened to other people, away from ordinary life. Now, how many of us have a friend, a colleague or a family member who we know has suffered from mental ill health? That is because more people rightly no longer feel any shame about a mental health problem. Because society is on a journey of understanding, attitudes are changing and stigmas are breaking down.

We all recognise that good mental health is no less important than good physical health, but there is still so much more for us to do. The Bill is the next step in our national journey towards ending the injustices that those who experience mental health problems still face. It is for that reason that I congratulate the hon. Member for Croydon North, who has spent many years working with the family of the late Seni Lewis as they fought for the truth about what happened to their son. It is crucial that we learn the right lessons from what happened to Seni, which is why I am pleased to be able to discuss the important changes that the Bill will make to transparency in mental health units.

I wish to highlight three issues: first, I shall discuss how young people in particular are affected by mental ill health; secondly, I shall discuss some of the measures that the Government have already put in place to improve diagnosis and treatment; and lastly, I shall touch on just a few of the vital changes that the Bill will introduce.

I shall start with the topic of mental health and young people. I am passionate about helping young people to get the best possible start in life. Children and young adults should face no barrier to making the most of their unique talents and enjoying their lives to the full. Often in this Chamber, we think of the obstacles that young people may face in terms of social mobility, access to a good job or apprenticeship, or getting the right education. We are right, however, to highlight today that mental health merits no less of our attention. If we are to ensure that young people can make the most of the opportunities they have and deserve, mental health provision for them must be as accessible and high quality as possible.

The sad truth is that mental health issues disproportionately affect young people. Many of us in the Chamber are all too familiar with the negativity and hurtful comments that some people choose to spread via social media. I ask hon. Members to put themselves in the shoes of a young impressionable teenager or primary school student. One in 10 young people say they have been a victim of cyber-bullying. It is hard to imagine how difficult it might be for a young person when their smartphone or social media become ways for bullies to reach them.

I commend Google, with which I recently participated in a workshop in my constituency talking to primary school children about internet safety and how young people can protect themselves online from unwanted and hurtful attention. Google, I believe, is rolling out this project across the country, and I would urge hon. Members on both sides of the House to work with it when it comes to their constituencies, visits their schools and talks to young people about the importance of protecting themselves online.

[Bob Stewart (Beckenham) (Con)]

That is fascinating. Will parents be able to put some sort of inhibitor on Facebook, or just the child?

[Rishi Sunak]

My hon. Friend makes an excellent point. The workshops provide packs for teachers to give to children to take to their parents so that parents become much more engaged with their children’s online presence, which is something that I, as a parent of young children, am becoming more aware of, as I am sure many others in the House are. We all must be aware of what our children do online, just as we are careful when they cross the street or go to the park.