Council Rents (Hansard, 19 January 1994)

§ 10. Mr. Clelland
To ask the Secretary of State for the Environment what assessment he has made about the impact of housing revenue account subsidy on the level of council rents.

§ Sir George Young
My right hon. Friend is increasing council rent guidelines for 1994–95 by an average of £2.20 a week. The average council rent guideline for subsidy purposes next year will be £31.60, which is both moderate and reasonable.

§ Mr. Clelland
At a time when owner-occupiers—I count myself among their number—are benefiting not only from tax relief on mortgage interest payments but from significant reductions in housing costs because of the fall in interest rates, how can the Minister justify the fact that, in the forthcoming financial year, local authorities will receive no net subsidy for housing and will have to find £66 million to support housing benefit, which will have to come from rents? Why are the Government so vindictive towards council housing and council tenants?

§ Sir George Young
To get the figures straight, there will be some £4 billion in housing revenue account subsidy next year. Local authority tenants who are on benefit will, of course, be insulated against any increase. Those tenants who are not on benefit have the option of the rent-to-mortgage scheme, which was put through the House by the Government. I hope that the hon. Gentleman will promote, with vigour and enthusisasm, the rent-to-mortgage scheme to his tenants who are paying the rent in full.

§ Sir Anthony Durant
Will my right hon. Friend look at councils that are increasing the costs of running their housing departments, which they are passing on to their tenants on an increasing scale? They are doing that to bring in more revenue for the council and are hiding the real costs of running their department.

§ Sir George Young
My hon. Friend will be pleased to hear that housing management will be put out to compulsory competitive tender. The benefits from the reduced cost that that will bring will be fed into the housing revenue account and will feed through in lower rents for his constituents. That is a powerful reason for the Government's pressing ahead with their policy, on which we were urged a few moments ago to hold back.

§ Mr. Raynsford
Does the Minister recall the answer that he gave me on 1 December, which showed that in the previous four years, when the retail prices index increased by 28 per cent., average council rents in London had been pushed up to 89 per cent? His own local authority, Tory-controlled Ealing council, led the way with a massive and disgraceful increase of 201 per cent. Does he recognise that his own authority has the record of the highest local authority rent in the country followed by Tory Redbridge, Tory Westminster, Tory Kensington and Tory Harrow? Will he now admit that it is Tory councils, often inefficient and corrupt, which hold the record for the highest rents?

§ Sir George Young
As the hon. Gentleman may know, I take some interest in local authority rents in Ealing. He may be aware that rents in Ealing had to go up by such a substantial amount because of some creative accounting by a Labour-controlled Ealing council, which was thrown out of office three years ago. It was the only gain that we made from the Labour party and we achieved it because local people recognised that creative accounting by Labour-controlled councils was highly expensive.
The hon. Member is aware that we are progressively moving towards capital value rents. Next year's guideline increase is lower than that of this year.