Coastal Tourism and Hospitality: Fiscal Support

Selaine Saxby Excerpts

Thursday 22nd February 2024 Westminster Hall

[Selaine Saxby (North Devon) (Con)]

I beg to move,

That this House has considered fiscal support for tourism and hospitality in coastal areas.

It is a pleasure to serve under your chairmanship, Mrs Cummins. Today I wish to highlight the vital role of hospitality in our coastal communities, such as my North Devon constituency, and the support that the sector needs and deserves. I thank UKHospitality for its ongoing work and support on this matter. I had the opportunity to bring Kate Nicholls, its chief executive officer, to North Devon last year to meet some of the fabulous hospitality businesses and hear their frustrations as well as their plans for the future. We visited businesses such as the Saunton Sands Hotel, the Carlton Hotel and the George & Dragon in Ilfracombe, and SQ Bar and Restaurant in Braunton.

Some of the challenges facing the sector are not always obvious, particularly in remote coastal locations. Hospitality venues extend far beyond just pubs, hotels and restaurants, and include holiday parks, music venues, bowling, children’s play centres, bars and clubs, which contribute so much to all our enjoyment of coastal areas and resorts as well as to the economy.

I have been lobbying Ministers for quite some time to continue to find solutions to ensure that this vital part of the economy of North Devon and so many other coastal areas continues to thrive. I thank this Minister—the Financial Secretary to the Treasury, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston)—who I know is a champion for the sector, for his ongoing patience and engagement in listening to my concerns and those of my constituents.

My hon. Friend visited Ilfracombe back in 2021 in his previous role as Minister for tourism. We met several business owners and discussed business rates, VAT thresholds and Ilfracombe’s ambitions in hospitality. I am sure that he recalls the unanimous voice of Ilfracombe’s tourism sector calling for the Government to raise the £85,000 VAT threshold, which currently sees much of Ilfracombe, like so many coastal communities, close its doors when the businesses reach the threshold. When first elected, I naively thought that that was just seasonality, but as staycations came back into vogue post pandemic, we saw some businesses close in mid-August as the threshold was reached. Indeed, a local accountant told me just last weekend that he advises all his hospitality businesses to remain below the threshold. At a time when we are looking for our economy to grow, why do we have a threshold that creates a cliff edge that does the exact opposite for the hospitality sector?

North Devon alone is home to nearly 2,500 hospitality venues, employing more than 8,000 people and contributing more than £400 million to our local economy. The hospitality sector’s success is vital for economic prosperity and plays a crucial role in shaping the very essence of our community. Yet despite the resilience inherent in the sector, recent years have presented unprecedented challenges, particularly in our coastal towns. The impacts of the covid-19 pandemic, coupled with the energy crisis and a labour market grappling with record vacancy levels, have stifled growth and posed significant threats to the sustainability of hospitality businesses—but I also want to draw on the positives that have happened. With all the challenges presented, the Government supported the sector substantially during the pandemic, not least with the furlough scheme, which continued even if hospitality venues were shut.

[Simon Jupp (East Devon) (Con)]

I thank my hon. Friend for securing today’s debate. She is making a barnstorming speech about Devon, which may even make me traipse slightly further north in Devon to her constituency to help out her industry. As we know, the hospitality and tourism industry in Devon supports thousands of jobs. As chair of the all-party parliamentary group for hospitality and tourism, I want the Government to build on the record that she has been describing of support for the industry in Devon and the UK. The trade association UKHospitality—whose CEO, Kate Nicholls, my hon. Friend has already mentioned—has three asks of the Chancellor of the Exchequer for the upcoming Budget: first, implementing a 3% cap on the increase in the large property business rates multiplier; secondly, introducing a cut in the lower rate of employers’ national insurance contributions to 10%; and thirdly—this is a big one—permanently reducing the VAT rate for hospitality businesses to 12.5%. Does my hon. Friend agree that those measures would really help and provide a big boost for jobs and investment in her part of Devon and my part of Devon?

[Selaine Saxby]

I thank my hon. Friend and neighbour for his contribution; it is as if we both speak to the same group! I agree entirely with his contribution, as I so often do. I am very keen that Devon hospitality businesses, right the way across and down the peninsula, can benefit, and that the Minister will hear our asks.

We cannot underestimate the pandemic’s impact on businesses. The hospitality sector came out of covid-19 heavily indebted. I hope that the financial sector can look at what more can be done to support hospitality businesses to repay their debts, which currently stand at £8 billion in bank debt and £2 billion in landlord debt. The pandemic harmed hospitality businesses and made their recovery much more difficult.

Although I warmly welcome the small business rate relief that was introduced in the autumn statement, which provided some support, up to two thirds of hospitality businesses find themselves excluded—not due to generating immense profits, but because they operate in larger premises in high-footfall areas. Consequently, the impending 6.7% rise in business rates and skyrocketing wage costs present a daunting prospect for the survival of many businesses.

While I applaud the Government’s commitment to creating a higher-wage economy, it is crucial to acknowledge the unique challenges faced by hospitality businesses, especially those based in coastal areas like my North Devon constituency, which are often small in scale, seasonal and working to tight margins. These businesses anticipate a 17% increase in staffing costs from April, with 98% of them expressing concern about how to manage the impact of the upcoming national living wage hike. Many of the businesses that should have benefited the most from the small business rate relief actually face wage rises in the hospitality sector that far exceed the business rate relief itself.

We are already seeing hospitality businesses contracting their hours and reducing the number of staff they employ or the hours that they work. Far too many of our pubs are now open at weekends only or cannot find chefs, so have some nights without food service, which reduces their profitability even further.

Although the national living wage hike was warmly welcomed by the hard-working teams who work across our hospitality businesses, it is a headache for business owners, who themselves frequently earn significantly less than the national living wage, due to the extensive hours they work and a reliance on their businesses’ ever- declining profitability to pay their wage. Far too many of our hospitality businesses face a crunch this April. Too many of the sums that we do up here rely on a 35-hour working week. Hospitality is a 24/7 business, and in remote coastal areas with low unemployment, such as my North Devon constituency, many members of staff are also much younger. The increase in the national living wage will hit those businesses particularly hard.

One key ask today is for a cut in the lower rate of employer national insurance contributions to 10% and consideration of increasing the threshold in order to share the burden of this policy between business and Government, but the biggest ask from my hospitality businesses across North Devon—I had the pleasure of chatting to many landlords in some of the fabulous pubs back home during the recess—is because their VAT burden is too high. In the hospitality sector, VAT is significantly higher than it is elsewhere in Europe, putting us at a competitive disadvantage. During covid, we saw huge success from the reduction in VAT for the hospitality sector. In that time, 70% of hospitality businesses benefiting from the VAT cut passed it on to consumers, in order to keep prices low. A hugely successful local pub shared its figures with me. With a turnover of just over £1 million, it is paying 25% in tax just in VAT and employment taxes. That is a quarter of a million pounds going to the Exchequer before payment of bills and wages, and payments to suppliers, are even considered.

Last year, we lost 3,000 hospitality venues in the UK, and I am concerned that if the Government do not take further action to share the burden of this tax cost, we may lose even more this year. Unfortunately, there is one recent case in my North Devon constituency; Broomhill Estate is closing due to VAT costs. I thank Alex Kleiner for all his work and for letting me know how much of an impact a reduction in VAT from 20% to 15% would have made to his business. I heard directly from Alex, a business owner, that there would have been three benefits: a reduction in absolute VAT; an impact on cashflow; and an uplift in footfall because of more attractive pricing, although that is harder to quantify. He said in

“4 out of the past 7 quarters 5% VAT reduction would have completely offset my electricity bill.”

Unfortunately, in this instance any changes to VAT will come too late for such an important landmark in North Devon.

Although I know that it is a big ask, I hope that the Treasury might again consider a reduction in the VAT rate for the hospitality and tourism sectors—to 12.5%—as that would help them to overcome the above inflation increases in tax and the national living wage, avoid further inflationary price spikes and unlock investment. The measure aligns with international standards, stimulating tourism and offering domestic tourists a more affordable alternative to travelling abroad. I am confident that not every publican and hotelier is wrong in telling me that this is the one measure that would help them the most. A cut—even a temporary one—would be a boost.

For so many coastal communities, their tourism industry has changed since the hotels were built in the Victorian era. Many have large properties that may not benefit from all-year-round occupation, particularly in those communities where swathes of the tourist attractions, shops and restaurants have closed for the winter because of the VAT threshold issue. Hospitality businesses rely on space to host people and therefore have larger premises in high-footfall areas. Businesses in the industry will often hit the upper rateable value band at a far lower turnover or profitability than others. The hospitality sector pays 2.5% of turnover on business rates, which is 10 times that of banks and insurers. I hope the Treasury is looking at the introduction of a cap on the increase in the large property business rates multiplier at 3% in England, aligning with the expected inflation rate in April. Additionally, I hope the devolved Administrations in Scotland and Wales pass on the benefits of that relief in full.

[Priti Patel (Witham) (Con)]

I thank my hon. Friend, first, for securing the debate and secondly, for her compelling fiscal case for the reforms that, frankly, are essential. We have been here in recent weeks talking about the same thing. In addition to fiscal measures, does my hon. Friend agree that we need supply-side reforms for coastal communities? Many of our constituents in coastal communities feel isolated. She has spoken about labour market shortages. We need to make sure that we have public services, NHS doctors, education, employment and banking facilities in those communities that serve their purpose, make those places healthy and help them to thrive, therefore increasing the footfall for the hospitality trade as well as the employment market for hospitality.

[Selaine Saxby]

I could not agree more with my right hon. Friend that there are many asks for our coastal communities; I have spared the Minister the rest of mine this afternoon. While I am here, however, it would be remiss of me not to mention alcohol duty. The freeze on that duty at the autumn statement was welcome, but it does not directly help our much-loved pubs, which have reported significant price increases from brewers and other producers despite the freeze. A reduction in VAT would leave the choice to pass on and/or reinvest in the hands of the retailer and not with the multinational brewery in the case of alcohol. I have continuously supported the Campaign for Real Ale’s campaign, as it would play a crucial role in stopping our many vibrant pubs and hospitality businesses going under. Whatever the scheme, a reduction bringing us in line with the clear majority of our European neighbours—permanently or even temporarily—would be a lifeline for our hospitality venues.

While talking about great pubs, I will take the opportunity to highlight The Bell Inn at Chittlehampton, as well as Chittlehampton Village Shop, which serves excellent tea and cake; both are finalists in the Countryside Alliance awards, and voting is now open for anyone who would like to help them along.

The potential of the hospitality sector to contribute to economic growth cannot be overstated. UKHospitality’s economic evidence submitted to the Treasury outlines the conditions required for growth, estimating the creation of 500,000 new jobs by 2029 and an annual growth rate of up to 6%. I hope the Treasury will carefully examine the evidence and arguments presented, recognising the immense potential that the hospitality and tourism sector holds for the UK. By supporting the sector, we not only ensure the prosperity of businesses but contribute to increased tax revenues that fund essential public services.

I am hugely reassured to see the Financial Secretary to the Treasury, my hon. Friend the Member for Mid Worcestershire here today, as he has been to see us and understands so much more about our tourism and hospitality sector, particularly in remote coastal locations such as my beautiful North Devon constituency. I hope that may influence some of those critical Budget decisions.

--- Later in debate ---

[Selaine Saxby]

Thank you, Mrs Cummins, for your chairmanship. I thank all right hon. and hon. Members for their contributions and the Minister for his response.

It is always my pleasure to be the one-woman tourist board for North Devon for the afternoon. On a slightly more serious note, part of the reason for the debate has been highlighted by so many other colleagues: coastal communities often hide severe deprivation behind the phenomenal tourist businesses that we are all talking about today. Unfortunately, Ilfracombe in my constituency is no exception to that rule. I take this opportunity to put in one final pitch to the Minister. Yes, we have levelled up across the country at large, but small coastal communities such as Ilfracombe, with a population of just 12,000, have missed out on multiple pots of money, and yet it is the third most deprived town in the country. There is more that we could do for these small areas, which is why this debate was so vital—tourism and hospitality is the No. 1 part of their economies. It is vital that we get that right for those communities. Meanwhile, I will continue to fight for more funding for coastal communities from other pots of money.

Again, I thank hon. Members. The draw of the sea and of the pub is now upon us.

Question put and agreed to.

Resolved,

That this House has considered fiscal support for tourism and hospitality in coastal areas.

Oral Answers to Questions

Selaine Saxby Excerpts

Tuesday 6th February 2024 Commons Chamber

[Laura Trott]

I can confirm that we are working with the Cabinet Office and the Department of Health and Social Care to ensure that we can respond as quickly as possible once the inquiry reports.

[Selaine Saxby (North Devon) (Con)]

12. What fiscal steps his Department is taking to support small businesses.

[Sir Edward Leigh (Gainsborough) (Con)]

15. What fiscal steps his Department is taking to support small businesses.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

Small businesses are the engines that drive our economy and we support them to thrive using levers right across Government. Our small business rates relief means that one third of business properties in England already pay no business rates. We provide tax reliefs benefiting small and medium-sized enterprises, such as the annual investment allowance and employment allowance, and we support investment in SMEs through British Business Bank programmes and a variety of other support measures.

[Selaine Saxby]

What consideration has been given to reducing employer national insurance contributions to help small businesses to sustain employment following the record increase in the national living wage from April, particularly in the tourism and hospitality industries?

[Nigel Huddleston]

My hon. Friend and I have spoken about these policy areas on a number of occasions. In terms of supporting small businesses, the employment allowance enables businesses with employer national insurance contributions bills of £100,000 or less to claim up to £5,000 off those bills. That was increased in April 2022 from £4,000 to £5,000, so the smallest 40% of businesses have already been taken out of paying employer national insurance contributions, and many of those are in the hospitality and leisure sector. We always keep policies under review, and I know that my hon. Friend will always be lobbying on this issue.

Oral Answers to Questions

Selaine Saxby Excerpts

Tuesday 19th December 2023 Commons Chamber

[Bim Afolami]

There are a couple of things that we need to do. We need to ensure that the industry abides by its commitment to the 5% target. Working with the Exchequer Secretary, my hon. Friend the Member for Grantham and Stamford (Gareth Davies), we must present the right investment opportunities so that the capital goes into the UK in the right way.

[Selaine Saxby (North Devon) (Con)]

9. Whether his Department is taking fiscal steps to reduce differences in the levels of taxation between long and short-term lets.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

The Government provide a different income tax regime for short-term lets compared with long-term lets if they qualify as furnished holiday lets, for which there are stringent conditions. As with all aspects of the tax system, the Government keep the tax treatment of property landlords under review. Any decisions on future changes will be taken by the Chancellor in the context of wider public finances.

[Selaine Saxby]

The changes to landlord tax relief, which fully came in during the pandemic, exclude holiday lets. That has contributed to a significant decline in residential landlords in tourist areas like North Devon. The lack of affordable rental properties has priced out workers, particularly in the hospitality sector, resulting in businesses reducing their opening hours and therefore their tax contribution to the Treasury. Can my hon. Friend provide any hope of levelling the tax playing field to encourage long-term landlords back to the market?

[Nigel Huddleston]

I thank my hon. Friend for her continued interest in this area on behalf of her constituents. The Government want to ensure a diverse and sustainable visitor accommodation offer while protecting local communities, including ensuring the availability of affordable housing to rent or to buy. That is why we are introducing a registration scheme for short-term lets in England, which will be a vital step towards achieving that aim. The Government keep the tax treatment of property landlords under review, but I would be happy to meet her to discuss these issues further.

Economic Growth

Selaine Saxby Excerpts

Tuesday 14th November 2023 Commons Chamber

[Selaine Saxby (North Devon) (Con)]

This afternoon, I thought I would revert to my role as a one-woman tourist board for North Devon, home to the only cold water surf reserve in the world and the UK’s only world surf reserve. With stunning beaches alongside beautiful countryside and magnificent moors, there really is something for everyone who wants to get a bit of the great outdoors.

Hospitality in North Devon contributes over a quarter of a billion pounds to the economy. Indeed, our local economy is hugely reliant on our tourism and hospitality sectors. The pandemic saw a surge in people enjoying a staycation and visiting previously unseen parts of the UK. However, this year has seen a 20% drop in visitor numbers, in part as these visitors head to overseas destinations again, but the sector is also struggling to recruit staff, with many venues open for only part of the week, unfortunately driven in part by the huge surge in short-term holiday lets alongside a rush of second home owners.

I have two pleas to the Treasury: to keep the business rate discounts, as swathes of hospitality businesses are set to close their doors this January if discounts are reduced, and to reverse the Osborne tax reforms and level the tax playing field between long term and short-term rentals, to help resolve some of our housing and, hence, staffing challenges. During an economic downturn, we all know that eating and drinking out is one of the first things to go, so I say to those of us in North Devon and beyond: let us support our local pubs and restaurants this winter.

But I fear that there is more at play. I know from speaking to beach managers and surf schools that far too many people visiting our beautiful beaches are fearful of the sea, despite eight of the 11 bathing beaches in North Devon having excellent water quality and being among the cleanest beaches in the world. I know that that phrase makes opposition councillors rush home to write complaints about me to the local paper, but it is true. The so-called “sewage scandal” so loved by opposition parties is not what is happening to North Devon’s beaches.

Yes, when it rains, a lot of the storm overflows run—they are mostly rainwater—but less than 1% of the water pollution in North Devon comes from human sewage. These overflows have run for more than a century; we only know about this now because they are monitored. In North Devon, much work has already been done to hold water further up the catchment and to reduce the impact of heavy rains, as well as installing extra storage capacity to reduce the frequency of storm discharges. Yes, there is more to do, but it is vital to those businesses along the coast, and everyone who wants to enjoy our stunning beaches, to recognise that North Devon’s beaches have already undergone huge improvements, and the water quality is significantly better than it was 20 years ago. Indeed, even Surfers Against Sewage, whose app generates more content in my inbox than anything else, conceded in writing to me this month:

“With regards to the beaches in your constituency, we totally agree that huge improvements have been made to water quality there”.

Yes, there will always be more to do, but I wish the opposition parties would not talk down North Devon.

Lib Dems called for sewage to be tackled in the King’s Speech. They clearly failed to turn up, as they so often do, when we passed the Environment Act 2021, which is the reason we are monitoring and know where the real problems are. Anti-business rhetoric from Lib Dems is so damaging in a constituency such as mine. A Lib Dem council runs our biggest town, Barnstaple, which has a very busy high street, for a whole host of reasons, not least the great range of fabulous independent retailers alongside big brand names. But it is being held back because the council has not prioritised reopening the bus station. I have had complaints for over a year about the lack of toilet facilities and shelter. Rural bus journeys into town are long. The council is paid by bus companies to run the station, but it chooses to spend that money on business rates rather than on providing the commercial services that travellers need. I know that the plan is to sell it to the town council and open a community centre, which is very lovely, but there is a local coffee shop owner who is interested in opening a café. Why cannot we do something more commercial?

Our hospitality sector and, indeed, virtually every business I visit, as well as all our public services, cannot recruit staff because there is nowhere to live for working-age families. I attribute that to the failings of the Lib Dem-run council to get to grips with planning. The council officer staff work flat out to deliver the plans that are put together, but where is the Lib Dem vision for Barnstaple to thrive and improve its economic output? Where are the affordable homes that we so desperately need?

Yes, Government money is coming to help redevelop the high street and rebuild the hospital and its vital staff accommodation, but more commercial thinking is needed at a local level. Our Lib Dem council leader advised the BBC that I was electioneering when I suggested reopening the bus station. Fortunately, the council staff at the town council recognise the need for a bus station, as does everyone else I talk to. We need our businesses to thrive. We need to support them and provide the right associated facilities for shoppers to make long journeys into town, taking advantage of the Government’s £2 bus fare, which is a huge saving for long rural journeys.

While I work locally to help resolve some of these matters, I very much hope that more people will contribute to North Devon’s local economic growth. If they have not booked their next staycation, I can highly recommend my beautiful constituency. North Devon is a jewel in our country’s tourism crown, and this Conservative Government will continue to support it, not talk it down.

Energy Trilemma

Selaine Saxby Excerpts

Thursday 23rd March 2023 Commons Chamber

[Selaine Saxby (North Devon) (Con)]

I thank my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) for securing this important debate. We do indeed face a worrying trilemma as we seek to balance energy affordability with security of supply and sustainability. I believe the solution lies in clean energy, with renewables generated here in the UK tackling security concerns. As the renewables sector develops, prices come down.

One cannot talk about energy without being aware of the source of our current focus: Putin’s illegal invasion of Ukraine. Even though we were not directly reliant on gas from Ukraine, our reliance on fossil fuels links our energy prices intrinsically to the international market, which shot up post invasion.

Under this Government, huge strides towards green, sustainable energy sources have been taken. The UK is ranked fourth out of 127 countries on the world energy trilemma index, our energy generation in the last decade having reversed from 40% coal in 2012 to 40% renewables last year. We need to continue this drive towards affordable, sustainable energy generated in the UK. But is renewable always sustainable, and is sustainable always renewable?

Living somewhere as beautiful as North Devon, where we have renewable energy sources in abundance—the wind rarely stops blowing, we have massive tides and the sun shines most of the year—it is no wonder that locals look to community energy and are increasingly bewildered that they cannot plug their solar panels into the grid. I know the new Department is working to upgrade our grid, but the pace of that is reducing our ability to move more rapidly towards our own energy supply. We must rapidly improve access to the grid for small businesses and farmers who wish to generate energy using solar or wind turbines on their property, and who wish to sell the excess back to the grid or hope that battery storage technology will rapidly catch up to enable them to use the energy later.

Community energy is hugely popular. While recognising the grid constraints that may limit the feasibility of supply in some parts of the country, I hope we can find ways to enable sites that generate low-carbon electricity on a small scale to export their energy to an electricity supplier on fair terms. Larger suppliers should work with community schemes to sell the power they generate to local customers. Amendments to this effect have been tabled in the Lords, and I hope steps can be taken to accommodate the amendments regionally, where viable, and to explain why that cannot happen in other regions. What is being done to progress these measures, which have cross-party support from almost half the MPs in this House?

Localised schemes tend to be supported, and innovative biomass schemes, such as the chicken dung generator in South Molton in my constituency, help local farmers while generating enough energy for the town. But is all biomass equal? Small biomass schemes that use local resources are, indeed, sustainable and, through replication, potentially scalable. I would argue, as would numerous eminent scientists, that biomass generation involving 4 million trees a year, shipped around the world on diesel vessels, is neither sustainable nor scalable.

Woody biomass energy generation in sparsely populated countries with large forested areas may be able to claim sustainability, but, in a country that is already importing wood to build houses because of the low levels of forestation, that is not the case. Not only do we need to build homes and furniture, but much can be built from the same waste wood currently burnt for energy, which is causing surging wood prices, not to mention that burning wood releases carbon into the atmosphere, whereas building retains the carbon in the product.

We need to ensure that we are accurately calculating the true carbon costs of our different energy sources, including the costs of bringing the raw materials to the site of energy production. As we go through the current transition to a cleaner and more secure energy supply, we clearly need many different energy sources, but we also need to be honest about the true environmental costs of some of the decisions we are taking, and we need to ensure we have a strategy that increasingly relies on affordable, home-grown energy sources that are genuinely sustainable.

Genuine renewables are, indeed, sustainable. Some of the newer sources, such as floating offshore wind, are themselves dealing with inflationary pressures. Although I warmly welcome the Department’s commitment to floating offshore wind, and recognise that annual auction rounds will attract more developers into the market, the progress of allocation round 5 has, to date, not been smooth. As chair of the APPG for the Celtic sea, I am delighted that today we have seen the announcement of the Celtic freeport and remain optimistic that the announcement on funding for ports will recognise the importance of supply chains to securing fantastic jobs all around the Celtic sea—not to mention that, although the wind does not always blow, it blows the other way round in the Celtic sea, to the north-east, which is why it is vital that multiple schemes progress tangentially.

There is great optimism about the future of floating offshore wind in the Celtic sea, and that the current round’s budget can be extended to recognise the increase in the number of schemes ready to progress, but this does not tackle the damage already done due to the nature of the negotiations. Developers have repeatedly expressed concern that the strike price in this round is too low. I recognise that this is a complex negotiation and that there is an element of who blinks first, but to retain our world-leading position in the sector we need to recognise that other international opportunities are rapidly opening up for the same companies. Why would they invest here if they start with a cripplingly low strike price? Developers that have already invested many millions of pounds into these schemes have been told that officials do not believe their figures and would rather let the round fail than discuss the price—not to mention that it is not all about price, as this debate clearly highlights. Floating offshore wind is fundamental to our longer-term energy security. As we have seen with other sectors, new technologies need a leg up to get them up and running.

I struggle to understand how we are now committed to developing a Celtic sea supply chain, yet have possibly created an auction round that may see no projects progress in the Celtic sea. The Spanish Government recently saw a round more or less fail because of a similar failure to recognise the inflationary pressures developers are under. One investor has already publicly stated:

“UK Offshore is over for us now”.

I fear that we are sleepwalking into a missed opportunity, with unintended long-term issues with developers. I hope that no one needs to blink and that with eyes wide open we can work with the developers to ensure that multiple projects progress in this round.

We have come so far, led by this Government. I hope that the new Department will continue this journey, recognising that it is already named to tackle energy security and sustainability. I know that, given the huge amount of financial support already given to consumers and businesses, affordability is drummed into everything it does. I hope that this tripod approach continues and that legs do not get lopped off in problematic negotiations as we move through the transition from fossil fuels to a cleaner, greener, cheaper and more secure future energy supply.

UK Infrastructure Bank Bill [Lords]

Selaine Saxby Excerpts

Report stage
Wednesday 1st February 2023 Commons Chamber

[Abena Oppong-Asare]

I thank the hon. Gentleman for his comments—as I say, I always like to take them on board—but I fundamentally disagree with him, because our amendment would ensure that we take the Bill further. As he once said, the best way to promote UK manufacturing jobs and production is to

“shape regulation to support enterprise.”—[Official Report, 16 November 2021; Vol. 703, c. 438.]

That is exactly what Labour seeks to do with our amendments, so I really hope he will support them. I understand where he is coming from, but our amendments would make sure that we deliver the projects that we need in the UK.

We know that the UK Infrastructure Bank could be a national enterprise. We have a world-leading offshore wind industry in Scotland and on the east coast, hydrogen in the north-west and on Teesside, nuclear power in the south-east, and solar power in the south and the midlands, but the potential of these industries can be realised only if investment stays in the UK. The amendments we have tabled would allow that to happen. The lack of domestic champions has compromised our security and stalled progress, and our amendments would enable the UK Infrastructure Bank to help reverse the trend.

I will speak briefly to the other amendments we are considering today. Labour strongly supported the circular economy and nature-based solutions being on the face of the Bill, and we were disappointed to see the Government remove them, but we are clear that amendment 4 has not been properly thought through. Nothing in it would do anything to improve water company performance or reduce sewage dumping; on the contrary, it would give water companies an excuse to not undertake the necessary improvement works. We will therefore not support it. Labour has set out a clear plan to end the Tory sewage scandal by introducing mandatory monitoring with automatic fines, ensuring that regulators properly enforce the rules, and holding water bosses personally accountable for sewage pollution.

[Selaine Saxby (North Devon) (Con)]

Does the hon. Lady not agree, having been in the Chamber earlier today, that the Government are already monitoring storm overflows across the country? One of the reasons why we are aware of the size of the problem that we are trying to tackle is because we have increased the monitoring from only 6% a few years ago to nearly 100% now.

[Abena Oppong-Asare]

I am not going to take any advice from the Government. They have been in government for 13 years, and what have they delivered so far? I suggest that the hon. Lady support our amendment, which would ensure that things go through properly.

The devolved Administrations must be included in the development of the UK Infrastructure Bank. I have already mentioned the fantastic wind energy sector that we have in Scotland, and I was excited to read about the opportunities that the bank has identified in Northern Ireland. We do not believe that amendment 2 is necessary to ensure that all regions and nations of the UK benefit from the Bill, so we will not support it.

As we enter another year of low growth and failed Conservative government, we know there is a vital need to invest in the infrastructure of the future. We support the establishment of the UK Infrastructure Bank and have sought to improve the Bill throughout. We want to see stronger objectives and reporting for the bank, so that it can play a role in meeting our net zero targets while creating good jobs across the country and supporting the UK supply chain’s resilience, but what the bank needs most of all from the Government is an ambitious plan. Once again, the Government are on the back foot and U-turning at the last minute with amendment 1, on the bank’s reviews. It is yet another sign that Labour is the party with a plan for government—a party that will grow the economy and create jobs for the future.

--- Later in debate ---

[Andrew Griffith]

My hon. Friend did indeed make his intervention count, because that is a very pertinent point. Of course, the whole purpose of the bank is infrastructure and capability building, and the commitment to regions is at its heart. Regional and local growth are among its core objectives. The more diverse infrastructure we have in all parts of this great United Kingdom, the more we are naturally adding resilience and achieving our objective. Indeed, the strategic steer set by the then Chancellor in March last year makes it clear that the bank must focus on geographic inequalities by reference to the levelling-up White Paper, which includes a comprehensive set of levelling-up objectives and measures and supports the Government’s strategic approach to levelling up. We would rather do that on a portfolio basis than investment by investment, as proposed by the hon. Member for Erith and Thamesmead.

Amendments 3 and 4, tabled by the hon. Member for Tiverton and Honiton (Richard Foord), focus on the important issue of water quality. This is an area where the Government do not need any lessons. We are taking the lead in this matter, and are taking the action that the hon. Gentleman’s party and its leader failed to take in coalition. Sometimes one detects the fervour of a convert, or even the working-out of some past guilt about their failure to take action on water.

[Selaine Saxby]

It is obviously delightful to have another Devon MP who cares passionately about the environment, as did his predecessor. I cannot help but wonder whether, if the Liberal Democrats were serious about this, the Secretary of State for Energy and Climate Change from 2012 to 2015 might have implemented some of these things. Does my hon. Friend the Minister agree that there seems to be a trend of creating opportunities for dodgy graphics and social media content, rather than making serious changes to legislation?

[Andrew Griffith]

My hon. Friend makes an important point. It ill behoves a party that aspires to be taken seriously as a force in British politics to be all about clickbait, misleading graphics and half-truths, rather than about, for example, the data, which show that monitoring has increased from just 5% in 2016—a level at which it would be wrong for anyone to characterise themselves as having their arms around this long-standing issue—to more than 90% today. I understand from my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs that it will be 100% by the end of this year. We are the party that is taking action. We are the party that is finding the data, exposing the conduct of the water companies and putting record investment into the sector to solve this long-standing problem. We are the party that provides the solution.

The hon. Member for Tiverton and Honiton needs to consider whether he wants to be part of the problem or, as we all are, part of the solution. One of his amendments is entirely superfluous, as such a measure is already underwritten by the objectives in the world-leading Environment Act 2021. Only yesterday, we announced ambitious interim targets to deliver those objectives in our environmental improvement plan. I believe that the hon. Gentleman was in the Chamber for the statement that preceded this debate. For that reason, we will accept his amendment, because it sits within the actions that we are taking and the commitments that we have made.

Finally, the amendment tabled by the right hon. Member for Dundee East (Stewart Hosie) would require explicit consent from the devolved Administration before using powers under clause 2(6) that touch on devolved competence. However, I was pleased when his colleague, John Swinney, the acting Finance Secretary, wrote to me indicating that he was happy with the content of the Bill, and would recommend that the Bill receive a legislative consent motion. Last week, I was even more pleased—imagine my delight—when the Scottish Parliament gave the Bill an LCM. The right hon. Member for Dundee East will see that not just the Government but his colleagues suggest that his amendment is not required by the Government in Holyrood. As a result, I very much hope that he will not seek to push it to a vote.

This is an incredibly important milestone and moment in establishing a new national institution that will deliver real social purpose and make an enormous difference to the lives of our fellow citizens across the United Kingdom. Establishing it today in statute will give the market greater certainty and confidence, and encourage significant private sector investment in all of the bank’s priority sectors. By partnering with the private sector—by mobilising the life force of private capital, the ferocious, problem-solving power of business—in areas that might otherwise struggle to get the investment they require, we will help speed up the transition to net zero and level up the UK. With the exception of amendment 4, which I have indicated the Government will not oppose, I hope Members understand the reasoning—even if they do not agree—that I have set out as to why we cannot accept the amendments and new clauses and that they respect the time of the House and agree not to press them to a vote.

Stamp Duty Land Tax (Reduction) Bill

Selaine Saxby Excerpts

Committee stage
Tuesday 10th January 2023 Commons Chamber

On that point I will close my remarks. This Bill presents a great opportunity to debate a such big issue; I hope the Government, if they are as radical as they say they are, will come forward with some proposals to abolish stamp duty land tax. I think that would be a very popular manifesto commitment.

[Selaine Saxby (North Devon) (Con)]

When this Bill was previously before the House, on 24 October last year—indeed, on the day we last changed Prime Minister, so it was under a different Treasury Minister—I asked the Treasury to analyse the potential harms caused by excessive second home ownership and holiday lets. I thank the Minister for her ongoing engagement on this issue, as well as the rest of the Treasury team. I have spoken to them on numerous occasions about the many complex taxation issues causing an imbalance in our housing market in constituencies such as mine, which I hope we can take steps to address in the coming months.

We know that when stamp duty was last reduced post pandemic, it generated a surge in short-term holiday lets and second home purchases. Indeed, 25% of purchases in my North Devon constituency during that period attracted the higher rate of stamp duty as an additional dwelling. However, we have no information on what proportion might have been long-term buy-to-let landlords. Alongside the many challenges in our North Devon housing market, we have seen a 67% decline in private rentals, with a surge in section 21s enabling landlords to take advantage of the tax inequalities between long and short-term rentals.

We desperately need to find a way to encourage buy-to-let landlords. The complexity of paying the 3% levy for an additional dwelling is, in many ways, a distraction from a Bill designed to help first-time buyers in particular on to the housing ladder. The removal of stamp duty saves thousands for anyone buying their first home—up to £425,000 at this time. When the numbers are fully analysed, in this legislation the maximum benefit to somebody buying an additional dwelling is just £2,500. We need to be just a bit realistic about whether that will be a large enough sum to motivate a change in behaviour in people who are buying additional properties—their second, third or fourth home.

For more than two years now, I have stood up in this House and asked for steps to be taken to tackle the housing crisis in North Devon. The Levelling-up and Regeneration Bill has now been amended to reflect the concerns of constituencies such as mine. Indeed, it is good to see Conservative-run councils in Devon and Cornwall taking steps to adopt measures in that Bill to double council tax on second homeowners. It is disappointing that Lib Dem-run North Devon Council has not taken such steps, but I remain optimistic that it will.

I very much hope that the paper I have submitted to the Treasury on behalf of Conservative colleagues—it includes many suggested changes to the tax system to tackle the imbalances between long and short-term rentals, and to continue making it easier for local families to buy and rent in places where they grew up or where there are huge numbers of job vacancies for them—will pave the way to looking more closely into the matter. I hope that the Treasury team’s door will remain open to MPs to meet and tackle this issue.

[Victoria Atkins]

May I place on the record my personal appreciation of the intensive work that my hon. Friend has put into this issue on behalf of her constituents and the wider south-west? Many south-western MPs are concerned about this issue, including—dare I say it—hon. Members from the Whips Office, who cannot stand up and speak. I am extremely alive to the issues that she raises. I wonder whether she would do me the favour of coming to see me at the Treasury over the coming months so that we can discuss further the issues in her constituency and the interesting ideas she has put forward.

[Selaine Saxby]

Nothing would give me more pleasure than to go back and speak with the Minister about these matters. We all worry about why the NHS is struggling to recruit. I can quite definitively tell people here today that the public sector struggles to recruit in North Devon because of the housing crisis.

We on the Conservative Benches are keen to tackle this issue. Yesterday’s cross-party drop-in session was hugely helpful. We heard from the officials behind the legislation, as well as from the Minister. It is just a shame that Opposition Members did not turn up—not one of them. They have tabled a number of amendments to the Bill, but do we really need to put reviews into legislation? One cannot help but wonder whether such amendments are politically motivated rather than aimed at delivering real change to constituencies that urgently need their housing markets to be rebalanced.

[Anthony Browne (South Cambridgeshire) (Con)]

It is an honour and a delight to follow my hon. Friends the Members for North Devon (Selaine Saxby) and for Christchurch (Sir Christopher Chope). May I say at the outset that I completely agree with my hon. Friend the Member for Christchurch that you should be Sir Nigel, Mr Evans? If I call you Sir Nigel, will I have as much time to speak as my hon. Friend?

It is a pleasure to speak because, as the chair of the Back-Bench Treasury committee, I have done a lot of work on stamp duty policy, and I have had a slightly perverse interest in stamp duty for the last decade or so and written various policy papers and research reports on it. We all support raising the level of home ownership. In fact, rates of home ownership started to decline under the previous Labour Government. There is a home ownership gap of about 5 million people who want to own their own home but cannot. I will support all measures—well, pretty much all measures—to increase home ownership. Clearly, we are teetering on the brink of recession and need to promote economic growth, so I very strongly support the broad thrust of the Bill in cutting stamp duty to help people get on to and up the property ladder and to stimulate economic growth. I have some reservations about the proposal being temporary and about it applying to second properties.

I will address some of the key themes of stamp duty policy. We have heard various calls today—not least from my hon. Friend the Member for Christchurch—to abolish stamp duty outright, and in fact, I have called for that before. But it is not just Conservative MPs who think that stamp duty should be abolished outright; the Institute for Fiscal Studies, on whose advisory council I sit, talked in its magisterial work on taxation policy—the Mirrlees review—about all the damage of stamp duty and called for it to be abolished.

Lord Macpherson, a former permanent secretary at the Treasury, gave evidence fairly recently to the Treasury Committee, on which I sit, about tax policy. He highlighted all the damage that stamp duty did to the economy, for many of the reasons that my hon. Friends the Members for Christchurch and for South Thanet (Craig Mackinlay) set out earlier. Lord Macpherson certainly would not be sad to see its demise.

I want to raise a slightly more nuanced point than the outright abolition of stamp duty, which would lead to a big problem with revenue, as it raised £14 billion last year in total—about £4 billion for commercial property and £10 billion for residential. That would be a hole. My more nuanced argument is that people buying houses to live in are overtaxed, but people buying properties either as second homes or for investment are undertaxed. Exactly 10 years ago, in 2013, I wrote a paper arguing for a higher rate of stamp duty for people who are buying homes not to live in. Fundamentally, homes are for living in. Two years later, the Government introduced that policy. It is now the additional premium. I do not think the Government introduced it in the right way and there are all sorts of problems with it, but I will not go into detail on that now. The stamp duty regime at least recognises the difference between people buying properties for investment or as second homes as opposed to people buying properties to live in as their homes. That tilts the property market in favour of those buying homes to live in, which is welcome.

Co-operatives, Mutuals and Friendly Societies Bill

Selaine Saxby Excerpts

Friday 28th October 2022 Commons Chamber

[Selaine Saxby (North Devon) (Con)]

I congratulate the hon. Member for Preston (Sir Mark Hendrick) on introducing this important Bill. In North Devon, co-operatives cover industries ranging from agriculture through to retail, recreation and housing. I was delighted this summer to see the power of a co-operative in action in the village of Parracombe on the edge of Exmoor, where the community has come together to build and staff a wonderful village shop and meeting place. Communities can achieve so much more when they are well organised and supported. I hope that in Parracombe and many other villages, people can come together to help their neighbours, particularly where they could help with affordable rural housing by being part of community land trusts. While councils are provided funding for community land trusts, they need access to additional funding, and what better way to do that than through the involvement of a truly locally owned co-operative.

In comparison to a traditional start-up, a co-op is twice as likely to still be trading after five years and its workers support six times more livelihoods. It is likely that co-operatives are so resilient because decisions are made in the interests of long-term community success, rather than the conflict of who can make money quickest. There is a focus on building up reserves in capital rather than relying on debt to fuel growth. The number of co-ops actually grew by 1.2% between 2020 and 2021, despite disruption from covid-19. Community-led economic development takes the idea that communities know best what they need to serve their community, and can implement that to support them and best manage their development.

The UK has a significantly smaller proportion of mutuals and co-operatives compared with similar nations, such as Germany and France. I suspect that is partly down to the ability of the sector to access external finance. I would like to take this opportunity to highlight the Co-operatives UK strategy, which is

“To build a strong, sustainable and diverse UK co-operative movement that positions co-operatives as a better way to do business and transform people’s lives”

and

“To promote and embed the values and principles of co-operation across UK enterprise and communities.”

Importantly, it sees co-ops as a way to empower young people. Co-ops are the opposite of the more insecure gig economy pioneered by tech apps. They give young people a stake in their work and allow them to engage more fully with it. They allow young people to engage with the issues that matter most to them and to make a positive change in their communities on issues such as climate change. In communities like mine, they encourage young people to stay rather than feel that they need to move away. There remains an opportunity for rural communities to benefit from additional funding for matters such as community land trusts and shops, as seen in Parracombe, and I am delighted to support the Bill.

Stamp Duty Land Tax (Reduction)

Selaine Saxby Excerpts

Monday 24th October 2022 Commons Chamber

[Richard Fuller]

My hon. Friend is absolutely right. He echoes some of the points made by the hon. Member for Westmorland and Lonsdale about the broad range of opportunities to address the issue, because there are such wide-ranging effects. The purpose of the amendment, however, is to create a separate schedule of rates in the stamp duty land tax system for those purchasing an additional property. That would mean that the purchase of additional property would not be included in the scope of the resolution or the ensuing Bill.

The Government already have higher rates for additional dwellings, which were introduced in 2016 and which apply a 3% surcharge to the standard residential rates of stamp duty. That surcharge will continue to apply. This means that, although the Government’s changes to stamp duty will ensure that around 43% of transactions will pay no stamp duty land tax, none of those will be purchases of second homes or investments in buy-to-let properties. The Government have taken meaningful action to support local communities on second homes. I assure my hon. Friend that we will continue to look at that.

[Selaine Saxby (North Devon) (Con)]

I reiterate the concerns raised by my hon. Friend the Member for St Austell and Newquay (Steve Double). Would it be possible to meet the Treasury team as the Bill progresses to ensure that coastal communities such as mine in North Devon do not continue to be blighted by the march of second homes?

[Richard Fuller]

I am always happy to engage with colleagues across the House. As I was saying, the Government have taken meaningful action on a range of issues, most recently through the Levelling-up and Regeneration Bill, which will introduce a council tax second homes premium.

The Growth Plan

Selaine Saxby Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

I am not sure there was a question. We have to focus on growth. Through growth we get more tax revenue to pay for public services. That is a fundamental notion and that is what we are focused on.

[Selaine Saxby (North Devon) (Con)]

I warmly welcome my right hon. Friend’s focus on productivity. Will he also use fiscal levers to tackle the productivity of housing stock in tourist locations such as my constituency? It has winter ghost villages, as second homes and holiday lets sit empty, which results in local businesses having to close and endless businesses being unable to recruit people for good jobs, as there is nowhere to live.

[Kwasi Kwarteng]

I will absolutely be focused on that. I will be very interested to hear more detail in a conversation with my hon. Friend and to discuss what more we can do to free up the property market.