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Scotland’s second home owners may be stripped of £400 energy grant

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Scotland houses - Getty Images
Scotland houses - Getty Images

Second home owners in Scotland face being stripped of a £400 handout from the Chancellor to help them cope with surging energy bills after Nicola Sturgeon’s government announced it wanted to claw back the money.

Tom Arthur, the SNP’s Public Finance Minister, said he is to work with local authorities to impose a one-off council tax levy on second and empty homes that would wipe out the impact of the Treasury support.

Although second home owners would still receive £400 for their main residence, Mr Arthur said that it was “clearly wrong” that those who could afford a second home should benefit multiple times from the scheme.

He argued the money should instead be clawed back and directed at “those who need it most” as he pledged to “examine all options to recover this money”, including using council tax.

However, he admitted this was “not straightforward” and Tory MSPs expressed scepticism about the cost and practicality of recouping the handouts, which are estimated to total £9.6 million.

Calls to guard against ‘unintended consequences’

The Association of Scotland’s Self-Caterers (ASSC) warned that SNP ministers must “guard against any unintended consequences” and they would need “robust data about the use of a property.”

The SNP plan would mean people who own holiday homes in Scotland and those who provide self-catering accommodation for hire face having to pay the full hike in energy bills in October for these properties.

Ofgem’s energy price cap is expected to rise to £2,800 per annum, pushing up the average bill by more than £800 from April.

Rishi Sunak announced last month that every household in the UK is to receive the £400 discount on their energy bills this October as part of a package of measures to tackle soaring prices.

Second home owners are to receive the handout for each property they have, with no restriction on the number of times they can benefit.

In addition, the Scottish Government announced £150 of support to people living in council tax bands A to D, mirroring Mr Sunak’s scheme in England and using funding provided by the Chancellor.

The Department for Work and Pensions disclosed on Wednesday that 689,000 of Scotland’s poorest households will also receive £650 from the Treasury to help with the cost of living, with the first of two instalments to be paid on July 14.

But Mr Arthur said: “In this cost-of-living-crisis, it is vital resources are directed at those who need it most, so it is clearly wrong that second home owners or those who own long-term empty homes benefit from a second £400 energy rebate.

“The Scottish Government will work with Cosla (the Convention of Scottish Local Authorities) and local government to examine how to recover this money, including through a council tax levy.”

Tom Arthur says he will work with local authorities to impose a one-off council tax levy on second and empty homes - Getty Images Europe
Tom Arthur says he will work with local authorities to impose a one-off council tax levy on second and empty homes - Getty Images Europe

He said he would also work with councils to examine how the proceeds should be distributed “to support local cost-of-living responses on a fair and equitable basis across Scotland”.

The surprise announcement came during a debate at Holyrood on the cost-of-living crisis on a Labour motion calling for the £400 credit handed out to second home owners to be recouped.

Mr Arthur tabled an amendment on behalf of the Scottish Government agreeing that ministers “should examine all options to recover this money through a council tax levy on second homes and long-term empty homes.”

There are estimated to be 23,890 second homes in Scotland and 45,801 unoccupied properties.

Fiona Campbell, the ASSC’s chief executive, said: “Following today’s debate at the Scottish Parliament, we await further detail from the Scottish Government on how this could be implemented in practice.

“A policy of this nature will necessitate robust data about the use of a property – something which has hitherto been lacking in Scotland. We look forward to discussions about the detail of this measure to guard against any unintended consequences.”

Liz Smith, the Scottish Tories’ shadow finance secretary, said: “While we welcome any measure to deploy resources as effectively as possible to tackle the cost-of-living crisis, we await the detail on how this will actually be achieved.

“This money was delivered by the UK Government to help families with their bills and every penny recouped must be used for that same purpose.”

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