HC Deb 01 April 1981 vol 2 cc275-6
5. Mr. Hardy

asked the Secretary of State for the Environment what he expects will be the average council house rent during the financial year 1981–82; and how this will compare with the position two years ago.

Mr. Stanley

The average council house rent for 1979–80 was £6.48 per dwelling per week. The figure for 1981–82 will depend on the decisions of local authorities within the framework of the new subsidy system.

Mr. Hardy

Is it not clear that next year will show that an enormous increase has been levied by the Government? Is that not astonishing as the Government have committed themselves to what they describe as a moral crusade against inflation? Will those increases not include unacknowledged increases in administrative costs as a result of the Government's inflationary policies?

Mr. Stanley

The hon. Gentleman must take into account the base from which rents are being increased. The previous Government ran away from their responsibilities on rents year after year. For four years out of five, rents increased less than the increase in earnings. As a result, by 1979–80, rents were only 6.4 per cent., of earnings which is the lowest proportion on record.

Mr. Frank Allaun

Is not the average rent increase of £5.35 a week in two years required by the Government almost entirely due to the removal of subsidy? Should not the tenants, who are angry, direct that anger not against Labour councillors but against Conservative Ministers, and not attempt to shoot the pianist who is required to play a rotten tune called by the Prime Minister?

Mr. Stanley

The hon. Gentleman will be aware that the new subsidy system does not come into effect until today, which is the beginning of the financial year. Even in 1980–81, rents were still only 6.5 per cent. of earnings. The hon. Gentleman mentioned rent increases of more than £5. That figure ignores one key element in the equation, which is that about 46 per cent. of tenants receive help with their rents through either the rent rebate system or the supplementary benefit system—about 2.4 million tenants. A quarter of all tenants will have their rent increase met in full by the supplementary benefits system. Another one-fifth will normally have 60 per cent. of any increase in rent met by rent rebates. We have also just increased the rent rebate ceilings to £35 a week in London and £30 a week elsewhere.

Mr. Heddle

Will my hon. Friend confirm that 1 million council tenants will face no rent increase?

Mr. Stanley

I confirm that tenants receiving supplementary benefits will have the increase met in full through the supplementary benefits system.

Mrs. Ann Taylor

Will the Minister deny the estimate that, because of the £3.25 increase which the Government have forced on council house tenants, the average council house rent will now be £11 a week—an increase of more than 70 per cent. over the last two years? How many housing revenue accounts will make a profit because of those high rent levels, and how many councils will have their general rate funds subsidised by the profits made from council house tenants?

Mr. Stanley

The level of rents is a matter for each individual authority. When referring to the surpluses in housing revenue accounts, the hon. Lady should also take account of the enormous switches that have taken place the other way. For example, in Manchester the rate fund contribution to the housing revenue account in 1974–75 was £2.8 million, but last year it was £37.1 million. That represents an enormous burden on ratepayers. I wish that the hon. Lady was as concerned about rate increases which council tenants in Labour authority areas must bear as she is about rents.