Holiday and Second Homes Regulation: Cornwall and Isles of Scilly

Perran Moon Excerpts

Wednesday 23rd October 2024 Westminster Hall

[Perran Moon (Camborne and Redruth) (Lab)]

In the hon. Member’s discussions with the public, private and voluntary sectors, is there any higher imperative across the whole of Cornwall than dealing with the issue of holiday and second homes? In my experience, there is no higher priority than grasping the challenges we are facing, which impact not just coastal areas, but towns in the middle of Cornwall, because people move from the coast to inland towns.

[Andrew George]

The hon. Member is absolutely right. On the one hand, we are trying to address the desperate housing needs of local families. We have in excess of 20,000 families on the local housing register, and we know that is merely the tip of the iceberg—the need is a great deal more. On the other, a lot of local families are being evicted from their private rented accommodation to make way for yet more holiday lets. If we do not recognise that, we are failing to grasp the full picture, so he makes a strong point.

I acknowledge that this is an important part of the Cornish economy, but it is worth noting that when one looks for accommodation in places such as Cornwall and the Isles of Scilly, the hotel and guesthouse sector is just as—if not more—important, in the sense that it competes with the holiday letting sector without many of the incentives and benefits that the self-catering sector enjoys. For example, many operate above the VAT threshold, whereas those in the holiday letting sector, if they take it down to a single property, do not. Of course, they face many other regulations as well.

--- 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.