HC Deb 30 June 1980 vol 987 cc1076-7
12. Dr. Roger Thomas

asked the Secretary of State for Wales what is the average rent for local authority dwellings in Wales; and by what percentage he expects it to increase by 1981.

Mr. Wyn Roberts

Provisional figures for 1980–81 show the average unrebated rent to be £8.04. The percentage increase by 1981 will depend on the decisions of local authorities taken in the light of any further Government guidelines, and within the framework of the new subsidy system which will come into operation in 1981–82.

Dr. Thomas

As the Minister is rather coy about predicting the percentage increase in rents, does he feel that it will be within the Government's inflation forecast for 1981, or will council house tenants be hit by more than average rises again this year?

Mr. Wyn Roberts

It was the Labour Government who restored the freedom to local authorities to fix their rents. While the Government have indicated guideline average rent increases to local authorities of £1.50 for 1980–81 and 60p from October 1980, in the context of the rate support grant settlement and the HIP allocation arrangements it is for the local authority to decide the appropriate level of increase for the tenants, taking into account the need to charge no more than is required to balance the expenditure falling on the housing revenue account after allowing for Government subsidies, contributions from the rate fund and provision for a reasonable working balance.

Mr. Best

Bearing in mind the small proportion that rents reflect in the total cost of provision of up-to-date local authority housing, does my hon. Friend agree that it will be much cheaper in the long term for many council house tenants, when the Housing Bill receives the Royal Assent, to buy their council houses than to continue to pay ever-increasing rents?

Mr. Wyn Roberts

I agree with my hon. Friend that we want to encourage home ownership and council house sales. There is a significant demand for home ownership. The previous Government said that they intended to keep the rise in rents broadly in line with the rise in earnings. They failed to do that. We are trying to correct the situation.

Mr. D. E. Thomas

Will the Minister explain that, as a result of his Housing Bill and the abolition of the no-profit rule on housing revenue accounts, high rents for rentpayers will subsidise ratepayers?

Mr. Wyn Roberts

No. I disagree with the hon. Gentleman's view of the effect of the Housing Bill. On the whole, I think that the effect of the Bill will be largely beneficial. We acknowledge that, while there will always be people who want to buy their own homes, there will always be those who wish to rent their homes. The Government have increased the protection given to poorer tenants. We have recently increased the maximum rebate payable under the scheme from £10 to £23.