My Lords, the tax system already treats both holiday lettings and residential lettings as businesses. However, furnished holiday lettings can benefit from some of the more generous tax rules for trades. This reflects the fact that they offer extra equipment and services in order to compete with hotels and guesthouses. We have no plans to extend these rules to other property businesses.
I thank the Minister for that disappointing reply. Is he not aware that if you have holiday lettings, you can roll over capital gains and therefore there is every encouragement to extend your business, whereas if you are a private residential landlord, you do not have that? Furnished holiday accommodation can only be let to anyone for a maximum of 31 days. Surely there is a desperate need for long-term residential accommodation in this country.
My Lords, I fear that there is more disappointment coming. I had one grandparent who came from the great state of New South Wales and one parent who was educated there, and I thank my noble fellow Australian for her Question. However, the Government have no plans to change the tax or other arrangements for tenancies in the private rented sector. Since the assured shorthold tenancy rules came in in 1988, the private rented sector has grown steadily and responded flexibly to changes in the wider housing market, and some 21 per cent of tenancies now last for five years or more.
My Lords, I declare private and social housing interests, and I commend the suggestions of the noble Baroness, Lady Gardner of Parkes. Does the Minister accept the criticisms coming from many sides of the changes to housing benefit, which we fear will mean a rise in arrears, repossessions and homelessness? Does he accept that some new measures are needed if these housing benefit changes are not to discourage private renting at the lower end of the market, where it is most needed?
My Lords, I am pleased that we have had attention drawn to social housing and housing benefit, because they provide a critical underpinning at the lower end of the residential housing market. Housing benefit will continue at a very substantial level and is a vital part of what comprises the broad housing market that we need in this country.
My Lords, we never rule out any suggestions for changes and developments of the tax system, but we have no plans to review taxation in the way that my noble friend has suggested.
My Lords, the Question refers to holiday lettings. Is the Minister aware that in many rural areas, especially national parks, where there is a great shortage of housing for local people and many workers' cottages and former council houses are now used as holiday lets, every holiday let is a house removed from the market for local people?
My Lords, the changes to the taxation arrangements for holiday lettings, on which the Government will consult during the summer, are intended to strike a balance between recognising the important contribution that holiday letting makes to the economy in rural areas and making sure that the tax reliefs available are not principally for wealthy owners of second homes. The changes, on which we will consult, will make sure that the taxation benefit available is more targeted than it was previously.
My Lords, the Minister clarified in response to a question from my noble friend whether he was answering on behalf of the Conservative Party or the Conservative and Liberal parties. May I suggest that when answering questions in future, Ministers also indicate whether they are speaking in a personal capacity or on behalf of the Government?
My Lords, I cannot quite see what that has to do with the Question. It could take up a lot of time if every time I stood up, I prefaced it by saying that I was speaking on behalf of the coalition Government, but I am happy to do that.
My Lords, I absolutely take the point that the noble Earl has made. My understanding is that the gap on decency between owner-occupied and rented accommodation has lessened over recent years-and indeed rented accommodation is now on average more energy efficient-so some progress is being made.