Ex MP claims second homeowners will get another £40m in grants

A former MP and Cornwall Councillor claims that second-home owners are set to benefit from a new £6,000 grant given to businesses affected by Covid.

Aaron Greenaway www.cornwalllive.com 

Andrew George, former MP for St Ives between 1997 and 2015 and now Cornwall Councillor for Ludgvan, Madron, Gulval and Heamoor, has also reiterated his call for the Conservative government to take back the grants given to second homeowners and spend it on alleviating housing pressures in Cornwall.

He claims that the failure to close the loophole, which allows some second homeowners to register as a business, led to an estimated £104 million going to second homeowners during the first lockdown of 2020, will see another £40 million of Cornwall’s coronavirus aid budget going the same way.

Mr George is calling on the Conservative cabinet at Cornwall Council and the Government to close the loophole, claw back the money and instead tax the second homeowners who have benefitted from this scheme.

In a post on Facebook, he wrote: “As if second homers haven’t been given enough taxpayers’ money. The Conservatives are about to dole out yet another £40 million of Cornwall’s Covid aid to them!

“They should be taxing them for being a major cause of Cornwall’s housing emergency and closing off the industrial-scale tax loopholes they’ve granted them. Not giving every second homer another £6,000 – YES. SIX THOUSAND POUNDS EACH – when we desperately need that money to address the extreme and serious housing problems and insecurities of tens of thousands of local families who are not so well-off.

“The Conservatives on Cornwall Council said they’d use their special influence with the Government. After all, they’re all in the same Party. Well, here’s a chance for them to show they can stop such scandalous misuse of public money. They can also demand that previous grants – estimated at more than £104 million = are clawed back while they’re at it.”

He also said that despite campaigning against the loophole since it was granted in 2012 under the Conservative-Liberal Democrat coalition Government, the current Government has only begun to acknowledge the issue but not yet taken any action.

He continued: “This is what I said in February this year. This merely repeats my warnings in March last year, and my campaign against the multi-million £ tax loophole granted by the Tories back in 2012 when I first exposed the scandal.

“In spite of my previous attempts, Conservatives are only now beginning to accept that the whole system is wrong and deeply unfair. They say they intend to close the loophole. In fact, they’ve announced they’re doing this three times! But nothing’s happened. Instead, we get the Chancellor’s announcement this week that they’ll be handing out more Covid aid to second homers. It’s got to stop.”

Why second homeowners are able to claim COVID relief grants

It was previously revealed that as of February 2021, there were more than 23,000 properties in Cornwall registered as a second home or holiday let. The actual figure is likely to be much higher as there are likely to be many more that aren’t registered such as Airbnb properties.

A loophole in legislation revealed in 2012 meant that second homes were eligible to opt to pay business rates rather than council tax, leading to some switching from council tax to business rates. This means that for some, they could claim Small Business Rate Relief (SBRR) and pay nothing.

In order to take advantage of the entitlement for full relief, the owner must make their home available for holiday letting for at least 140 days a year, although they don’t actually have to let the property during that time but make it ‘available for letting’ and for the rest of the year, can use it as their second home.

In February 2021, Andrew George revealed a response he received from Cornwall Council about the extent of this. He revealed that out of 10,593 properties claiming non-domestic rates where the valuation office description code is a self-catering unit, 8736 have claimed some amount of small business rate relief. Of these, 108 have a portion of the small business rates to pay while the rest have nothing. He added that Cornwall Council is eligible to claim back reimbursement for the cost of awarding the rates relief from the Government, while the loophole means that second homeowners eligible in many cases pay nothing in taxes.

This loophole means that second homeowners who claim this relief have been able to claim COVID relief grants from the Government from funding given to and administered by Cornwall Council.

Mr George revealed the following had been given to second homeowners who claimed small business rate relief to January 2021:

March 2020 (lockdown one): £79,275,000.00 (7,773 accounts)

November 2020 (lockdown two): £9,285,198.00 (6900 accounts)

January 2021 payment and Closed business lockdown payment (lockdown three): £40,050,521.00 (6617 accounts)

Total: £132,935,998.