South-West Region

Part of the debate – in the House of Commons at 10:29 pm on 19th December 1983.

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Photo of Mr David Penhaligon Mr David Penhaligon , Truro 10:29 pm, 19th December 1983

I have never walked up and down and counted them, but I can tell the Secretary of State—other Members besides me come up from the south-west —that it is not unusual to see, at least as far as Exeter, people sitting in the corridors of some of the trains going downwards. Coming up, obviously, the problem occurs in the opposite direction. I urge the Minister to obtain the figures because the trains are used far more than his question implies.

But even if the figures for Cornwall, from the point of view of financial return for the railways, were bad, trains are more important to the far south-west than purely monetary calculations might lead one to believe. Frankly, if the railways in Cornwall were abandoned completely, the psychological and emotional effect on the people there — the feeling that they had been abandoned by all —would be absolutely catastrophic. We fear that we are seeing the gradual deterioration of our service and that Cornwall will become merely a branch line.

I come to the question of summer lets and housing in general. I have raised this issue on the Floor of the House many times. Indeed, I think that I can claim to be almost the only hon. Member who raises it. I refer to the number of properties that are let by the week during the summer months in my part of the country, and a Government announcement has been made which is worrying me greatly. It has been stated that in the next Finance Bill the Government will, after considerable lobbying by the summer let industry, extend capital gains tax relief and relief on the replacement of business assets to those who run summer lets as a business and will call the income made from summer lets earned income for tax purposes.

That has been heralded in the west country as massive help towards that industry, and clearly it is. Exactly how much it is worth I cannot calculate, despite having made considerable efforts so to do. Have the Government carefully thought out the consequences of substantially increasing the tax help that is given to those who run summer lets in my area? There are already in my constituency villages in which nearly 20 per cent. of the houses are empty for nine months of the year. Yet we seem to be moving towards the position in which those who let houses in the summer by the week, as opposed to those who let their properties on a permanent basis, will receive a tax incentive from the Government for doing that.

I have already been approached by a couple of moderate-sized landlords in my constituency—and I am currently in correspondence with the Chancellor on the issue — who have always been against letting their property by the week during the summer because, they say, they can see the agony of the housing crisis that that creates. But they have asked whether they would be considered to be sane if they continued to insist on letting their properties on a permanent basis, given the massive tax advantages resulting from letting by the week. When I have raised this issue it has received only a little publicity in the south-west, but I have received mail bags full of correspondence.

On the whole, those who own summer let properties are not keen on my argument, and that is not surprising. But many people — hotel and caravan site owners, for example—point out that they are in business competing with let-by-the-week properties, and they are rated as businesses and must obtain planning consent and obey all the regulations applying to businesses.

I have a solution to the problem and an answer to the dilemma that the Government are about to create for themselves. I should be happy to see such tax concessions offered provided that letting properties by the week was made subject to planning consent. In other words, if people run such properties as a business, let them be treated as a business and subject to the planning consent procedure. At the moment, in my seaside resorts, if you want to change your house into a fish and chip shop, a pub or a vegetable shop you have to get planning consent, but if you want to change a normal hereditament to a house that is let by the week during the summer, no permission has to be obtained, and the new business is not rated for that purpose. That is an anomaly that the Government could solve at a stroke of the pen. I seek an assurance that if these tax reliefs are to be granted, and if the properties are to be treated as businesses, the obvious quid pro quo should be exacted and they should be made subject to planning consent. There is no reason why the Government should not accept that. If they do not do so, the problem in the far south-west will not go away — it will get worse and it will be seen to get worse, because of the tax concessions granted to those who let by the week.

When my regional colleagues explain the great concession in the Western Morning News, I wonder whether they are fully aware of its knock-on effect. I accept that this is not fully within the sphere of the Secretary of State for Employment, but I ask the Minister either to give me a reply or to raise the question within the internal machinations of the Government to get an official view.

In my constituency 120 families are living in temporary accommodation and awaiting permanent housing. I suspect that the hon. Member for St. Ives (Mr. Harris) has a similar number. The housing crisis in the south-west is a fact. I fear that it will not go away, and that if the tax concession is granted it will get significantly worse.

The hon. Member for Torridge and Devon, West referred to the rates. No one could accuse Cornwall county council of overspending. The general routine is that if something ought to cost a quid, the council will try to do it for 50p and will allocate 30p. Some of the facilities in my constituency certainly look as though they were provided on that method.

As was recently announced from the Dispatch Box, the GRE is the Government's estimate of a reasonable level of expenditure to maintain the social fabric in any given area. Last year the GRE for Cornwall was f138.28 million. The country actually spent 133·10 million—a good £5·1 million below the Government's own estimate of what would be reasonable. Cornwall's reward was to be fined £800,000 for overspending. In Devon the figures are not quite as favourable, but Devon county council is below the GRE, as are most of the county authorities in the south-west.

There are many supporters of the Government on the county council, but much anger is felt on councils that have obeyed every single Government diktat and never once overspent, according to the criteria issued by the Government, and that clearly have a very low level of expenditure on the social fabric — a disastrously low level in some areas. For the Government to fine low-spending councils for their economy seems bonkers beyond belief. This year the Government are to allow the county to increase its budget by 3 per cent. That is a 2 or 3 per cent. cut in real terms, and I do not know where it is to come from. My county sees how some other authorities ovespend, and its anger is likely to increase and increase as time goes by.

There may seem to be little connection between the points that I have made, but they are all-important to the south-west, and I hope that the Minister will apply his mind to some of them. I have mentioned employment, summer lets, railway services and rates. Those are all issues that currently occupy the minds of those in the far south-west. The thought that hon. Members on the Government Benches will agree with me encourages me to sit down and allow them so to do.