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Today’s Senedd roundup: Demand for Government to close “loophole” on second home council tax

17 Oct 2019 15 minute read
Abersoch. Picture by Ken Doerr (CC BY 2.0)

Owen Donovan, Senedd Home

The Motion

The Senedd:

  • Calls on the Welsh Government to ensure that council tax is paid on second homes.

An unacceptable injustice

Sian Gwenllian AM (Plaid, Arfon) told the chamber she’s been raising this issue for some time and briefly explained what the problem was:

“Although owners of second homes are among the richest people in Britain, in Wales they can use the system in order to avoid paying council tax. By registering their second property as a small business, second-home owners can avoid paying council tax by transferring to the business rate system. But, given that the rateable value of their property is low, 94% of them are eligible for business rate relief. That is, they don’t have to pay business rates either. But they are not businesses – they’re domestic homes.”
– Sian Gwenllian AM

The problem was tied to the Local Government Finance Act 1988 which allowed second home owners to move property around lists in the manner described. There are 5,000 second homes in Gwynedd and while Gwynedd Council applies a council tax premium, 1,000 of the second homes are benefiting from the “loophole”, costing Gwynedd Council £1.7 million a year.

Rhun ap Iorwerth AM (Plaid, Ynys Môn) later added it costs Anglesey Council at least £1 million and £5 million across Wales as a whole on average.

Mike Hedges AM (Lab, Swansea East) agreed and two of the most loathed taxes amongst the wealthy are council tax and business rates because they’re historically unavoidable. Given that the average weekly rent of a holiday property in Wales is £1,000, if the homeowners were renting them for the minimum period then they should be making at a minimum £12,000-15,000 and HMRC should be chasing them for it.

“….there are over 24,000 second homes in Wales, with almost 5,000 of them in Gwynedd, and over 4,000 in Pembrokeshire. In 2017-18, almost 40% of the homes sold in Gwynedd and a third of the homes sold on Anglesey had been sold as second homes. So we are talking about a broader economic problem here, aren’t we? Large parts of Wales, particularly those areas with the highest level of second homes, are also among the areas with the lowest levels of income and salary. So, the reality is that these are areas where the housing market doesn’t represent the local economy.”
– Llyr Gruffydd AM (Plaid, North Wales)

Mark Isherwood AM (Con, North Wales) – slightly rambling – argued that the minimum 70-day occupancy rule (to qualify as a holiday let for business rates) should be shortened, though he believed there had to be checks to ensure current rules were being properly monitored and enforced.

Mark Reckless AM (BXP, South Wales East) was also sceptical as to whether claims about second homes were correct. The “loophole” was introduced because the 50% discount for second homes was less than business rates at the time, but now it’s the other way around. It was fair and appropriate to have a system for collecting tax for genuine holiday lets and he called for Wales to adopt HMRC rules for furnished holiday lettings which effectively extends the minimum letting period to at least 15 weeks.

All households should pay their dues

The Welsh Government supported the motion. Finance Minister, Rebecca Evans (Lab, Gower), said it was a responsibility for all households to make a financial contribution to fund local services. There are measures in place for councils to enforce payment of council tax and collection rates were at 97%.

The Minister didn’t accept that this was a form of tax avoidance or “loophole”, but it was worthy of another look:

“The reality is that transferring to the rating list is not avoidance, and local authorities do benefit from non-domestic rates income as well as council tax….where a business is eligible for small business rate relief, the Government does fund that rate relief in full, to the benefit of local authorities. So, it can’t just be a case of switching to one list by choice; there are some criteria that must be met, and the question that we have to grapple with is, ‘Have we got those criteria right?’”
– Finance Minister, Rebecca Evans

The motion was agreed unanimously

Picture by meineresterampe from Pixabay

New bill proposed to target single-use plastic

Yesterday, Huw Irranca-Davies AM (Lab, Ogmore) put forward a proposal for a Bill which would address an issue that’s been discussed in the Senedd several times – single-use plastic and plastic waste.

Financial penalties work

His proposed Bill would set targets for the Welsh Government to reduce the use of specific types of single-use plastic and would also grant powers to introduce taxes and levies – which could take into account the amount of recycled material used in the product. He said single-use plastics were implicated in several environmental risks encompassing land, food and water. There was also evidence that taxes and levies work:

“Introducing a 5p paper cup levy led to a 156% increase in the use of reusable cups in just six weeks in Starbucks in London. It works. Evidence shows the greater the plastics levy, the greater the impact. In Wales, we could extend this to harmful products that fall outside the extended producer responsibility and market restrictions, so plastic clothing and balloons, chewing gum, single-use pens, protected postal packaging and wet wipes.”
– Huw Irranca-Davies AM

Delyth Jewell AM (Plaid, South Wales East) didn’t believe this was a problem that the nation could recycle itself out of simply because of the effect plastic existing has on the environment. She called on the Welsh Government to consider banning single-use plastic bags as soon as possible (as 70 other nations have done). There was also a need to better educate the public to make informed choices – such as improved product labelling.

Jenny Rathbone AM (Lab, Cardiff Central) added that Wales has an enviable record in recycling some issues have emerged such as corn starch food waste bags clogging up machinery and, ironically, being replaced with plastic. There were also major issues with the amount of plastic waste generated by major events.

“We heard of the possible contribution of different levies and I agree – we need to look at things such as clothes that include plastics, we need to look at balloons, we need to look at single-use pens. One of the things that angers me is receiving all of this packaging in the post. We do have to be far less content to accept these situations. We need to look at exemptions for zero-waste shops.”
– Llyr Gruffydd AM (Plaid, North Wales)

David Rowlands AM (BXP, South Wales East) said there were many legitimate uses for plastic so we shouldn’t, and probably couldn’t, eliminate their use. He expressed support for a deposit return scheme.

Rhianon Passmore AM (Lab, Islwyn) believed public procurement policies could be a driver for change, such as Caerphilly Council’s pledge to only provide plastic-free menstrual products. Jayne Bryant AM (Lab, Newport West) praised the work of voluntary groups who collect plastic waste.

Alun Davies AM (Lab, Blaenau Gwent) added that the 5p single-use plastic bag charge was deemed groundbreaking at the time and has already massively reduced their use. However, it was unacceptable that we allow any of our waste to be exported, which often ends up “dumped on the poorest people on the planet”.

Singing from the same hymn sheet

Deputy Minister for Housing & Local Government, Hannah Blythyn (Lab, Delyn), said there was an awful lot of political and societal will to deal with the matter and she was “singing from the same hymn sheet” as those who contributed to the debate.

The Deputy Minister listed many actions the Welsh Government have taken or will take, including requiring businesses to separately collect recyclable material and a general strategy to create a more circular economy.

Photo by sinzicraciun0 from PixabayDogs shouldn’t be a barrier to homeless people securing shelter

This week’s short debate was lead by Jack Sargeant AM (Lab, Alyn & Deeside) on attitudes towards dogs by homeless shelters.

A strong bond that shouldn’t be broken

Jack Sargeant said nations were often judged on how they treat their most vulnerable and, sadly, Wales was failing the homeless.

For many homeless people, their dog might be their only source of strength and companionship. Nonetheless, most homeless shelters operate “no dogs” policies and only eight hostels in Wales were deemed to be dog-friendly by the Dogs Trust.

“Now, some will say that the person looking for accommodation should just give away their dog…. I could never do that, and that is a decision they definitely should not have to make. There are many benefits to accepting dogs into hostels, not just for the owners and the dogs themselves, but for staff and other residents. When homeless people are forced to choose between their dog and a hostel place, most will, understandably, choose to stay with their dog, as their dog is most often their best friend, their companion. The bond between any dog owner and a dog is a strong one, but it will never be more so than with that of homeless people.”

– Jack Sargeant AM

Opening up shelters to homeless people with dogs will ensure the person has access to advice and support, while the dog can access veterinary schemes. There was also a need to ensure people can take dogs with them when they move from shelters and hostels to more secure housing.

A crucial companion

Deputy Minister for Local Government & Housing, Julie James (Lab, Swansea West) was sympathetic to the plight of homeless people with dogs.

“I absolutely agree that a person’s dog should not be a barrier to them coming into services and it’s completely unacceptable that this is sometimes the case. I am aware that, increasingly, many of our hostel emergency provisions across Wales do cater for companion pets. However, in the majority of cases, this also quite rightly includes a risk assessment and can be determined at the discretion of the landlord or on-site project manager.”

– Deputy Minister for Local Government & Housing, Julie James

The long-term solution was, of course, providing more permanent housing; emergency accommodation will never be enough by itself. Under any future “Housing First” policy, pets will be recognised and taken into account when sourcing housing.

Picture by Marco Verch (CC BY 2.0)

Eligibility criteria for blue badges to be looked at following committee inquiry

Yesterday, AMs debated the Communities Committee report on the blue badge scheme in Wales – summarised here.

A lifeline for our communities

Committee Chair, John Griffiths AM (Lab, Newport East), said the inquiry attracted higher-than-average engagement with the public, demonstrating how important blue badges were.

13 of 19 recommendations were accepted or accepted in principle. He was disappointed the Welsh Government rejected a concessionary parking scheme for those people who fall just short of blue badge requirements as well as an automatic renewal system for people with lifelong or deteriorating conditions.

“….the blue badge scheme is vital to enable many people to live independently, and the prospect of being unable to have a badge causes a great deal of anxiety. These are important issues, and I hope the Welsh Government can re-consider some of our rejected recommendations to ensure the scheme operates as effectively as possible for all our communities across the length and breadth of Wales.”
– Committee Chair, John Griffiths AM

Shadow Communities Minister, Mark Isherwood AM (Con, North Wales), said he’s long called for temporary blue badges but previous Welsh Government proposals didn’t go far enough. He was also worried that the assessment process will continue to let disabled people down if those making the decisions didn’t have mandatory disability awareness training.

“… many times have we seen Labour AMs note the unfairness of disability assessments when they’re conducted by the Department for Work and Pensions? How many times have we recognised the importance of appeals against their decisions and the importance of ensuring that staff understand the needs and barriers that people face?….it’s only when we have robust appeals processes and staff who are properly trained that we find that these problems are reduced. So, I’m disappointed that these recommendations have been rejected.”
– Leanne Wood AM (Plaid, Rhondda)

More disappointment

Dawn Bowden AM (Lab, Merthyr Tydfil & Rhymney) said this was an issue which crosses her desk fairly regularly and her office has a good track record of getting cases reviewed and decisions overturned. While acknowledging the Welsh Government’s rejection of a concessionary scheme, would they consider a temporary blue badge authorisation while applications are being processed and considered?

“….the National Autistic Society Cymru are quoted in the report saying that the potential benefits from including cognitive impairments (in blue badge applications) hasn’t been truly recognised. And this is something that I have seen really strongly within my casework. I’ve dealt with numerous cases where people with anxiety and other mental health issues have been denied a badge….I’d say that this group are disproportionately affected when there appears to be any move towards the tightening up of applications.”
– Vikki Howells AM (Lab, Cynon Valley)

Caroline Jones AM (BXP, South Wales West) believed the government had to get over its reluctance to issue instructions to local councils as the system continues to let disabled people down. Jenny Rathbone AM (Lab, Cardiff Central) warned against a black market in blue badges developing – as it has in parts of London – to get around parking charges.

Review of eligibility criteria planned (with conditions attached)

Economy & Transport Minister, Ken Skates (Lab, Clwyd South), said any review of eligibility criteria would require further research and discussions with the other UK nations.

“….my officials have been holding discussions with the other three nations to share information about current eligibility to determine whether there are justified reasons for amending it. I believe that any further changes to eligibility criteria can only be made if there is a solid evidence base to support such changes. I do not wish to reduce the availability of parking concessions to current badge holders, which is nearly 7% of the population.”
– Economy & Transport Minister, Ken Skates

The Minister added that abuse of the blue badge scheme couldn’t be ignored; over a period of 12 days between April and June, 15 badges were seized in Cardiff for misuse, while in Bridgend in just two days 16 examples of serious misuse were found and 10 went to further enforcement action.

The government’s rejection of some of the recommendations shouldn’t be interpreted as meaning they didn’t want to address some of the matters raised in the inquiry subject to further discussions with local authorities.

A mother and child

Increase in number of babies subject to care cases

Data analysis by the Nuffield Family Justice Observatory has revealed that newborn babies in Wales are more likely to be subject to care proceedings than babies in England.

In 2018, 83 babies out of every 10,000 born in Wales were subject to care proceedings compared to 39 babies in 2015. Around half of mothers involved in the cases had been previously involved in proceedings relating to other children.

Prof. Karen Broadhurst said: “This is a very distressing issue for mothers who are expected to appear before the courts shortly after giving birth. How do these mothers instruct a solicitor or meaningfully participate in proceedings so soon after giving birth and be able to contest the removal of their baby?”

Union puts together plan to rescue Newport steelworks

The Community trade union, which represents steelworkers, has drafted a rescue plan for the Orb steelworks in Newport, which Tata announced its intention to close after failing to find a buyer, threatening up to 400 jobs.

A march in support of workers took place in the city on 14th October.

The union’s plan includes automation and upgrades to heat-treating (annealing) lines, which could require £30 million of government investment. The union believes such investment would make the plant capable of producing steel for the electric vehicle motors.

Car parts factory in Port Talbot to close in 2021

On October 16th, it was announced that Hi-Lex Cable Systems in Port Talbot was to close in 2021 with the loss of 125 jobs.

The company, which supplies parts to Honda and Ford, blamed the subsequent closure of their respecting Swindon and Bridgend plants for a reduction in sales, which will make the plant unviable. Any residual business will move to Hungary, possibly in light of probably trade barriers after Brexit.

Plea for patience from rail passengers

The Chief Executive of Transport for Wales, James Price, has asked for the public to be patient as Transport for Wales Rail marked a year since taking over the Wales & Borders rail franchise.

The company was hit with serious problems during autumn 2018 and while that hasn’t yet been repeated, there’ve been high-profile issues with shortened and cancelled trains. Passenger satisfaction levels have remained unchanged at 82% compared to the last year of Arriva Trains Wales.

Senedd remains one of the UK’s top family-friendly employers

The Assembly Commission remained amongst the top 30 employers in the UK for family-friendly work policies. The list is compiled by the charity Working Families and measures four key areas on how they ensure a work-life balance.

Clerk to the Assembly, Dr Manon Antoniazzi, said: “This award confirms what a great place the Assembly is to work, and to be recognised for our positive and inclusive environment is an excellent reflection of the passion and pride shown by our people at all levels to achieve the aspiration of being an exemplar employer. We will continue to support our employees in balancing their lives, developing their careers and providing outstanding service to AMs representing the people of Wales.”

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