Council House Rents (Hansard, 20 March 1990)

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh)
My Lords, housing revenue account subsidy ensures that rents can stay within the reach of council tenants. It is for local authorities to determine their own levels. Rent rebates give assistance to those who need it, and for tenants receiving rebate any increase in rent is fully rebated.

§ Lord Dean of Beswick
My Lords, I thank the Minister for that Answer. Would he care to tell us why three of the highest rent increases have been levied, totally against the Government's recommendations, by Conservative authorities such as Redbridge? That borough will levy a rent increase of £ 15 per week. Reigate will levy £ 9 per week and another borough will levy an increase of £ 7 per week. These increases are totally against the Government's wishes. Can the Minister tell us why these authorities have levied such tremendous increases? Will the increases qualify in full for housing benefit?

§ Lord Hesketh
My Lords, I shall answer first the last part of the question of the noble Lord, Lord Dean. Those in receipt of rebate will continue to receive it, whatever the increase. However, I should also point out to the noble Lord that even though he introduced examples of Conservative authorities, many times from this Dispatch Box I am accused, for the Government, of interfering with local authorities. It is not for the Government to interfere but for the electorate to decide.

§ Lord Stallard
My Lords, is the noble Lord aware of the further example of the city of Canterbury? It has announced an increase of 54-69 per cent. which raises the average rent of £ 22 to £ 34 per week. How does the Minister justify that for people who do not receive rent rebate?

§ Lord Hesketh
My Lords, we face the perennial problem at the Dispatch Box that the decision has been reached by a locally elected authority. I am constantly berated for the Government interfering with local authorities. This is something which the local authority must address to its tenants and electors.

§ Lord Stallard
My Lords, is it not a direct result of government interference in the form of the Local Government Act 1988?

§ Viscount Massereene and Ferrard
My Lords, does the noble Lord agree that the city of Canterbury is in a unique position? It has to pay for the roads within its boundaries and other facilities in order to attract tourists. I am sure that the noble Lord will agree with me that it is not an ordinary city.

§ Lord Hesketh
My Lords, I am sure that all in your Lordships' House agree that Canterbury is a unique city in our country. However, I must repeat what I said earlier— that two facts are important. First, those in receipt of rebate will not be affected by the increase. Secondly, it is a matter for the local authority to set the level of rent.

§ Lord Tordoff
My Lords, will the noble Lord take the time to answer the last question by the noble Lord, Lord Stallard?

§ Lord Hesketh
My Lords, with great respect, I believe that I have answered it in the reply that I have just given.

§ Lord Stoddart of Swindon
My Lords, can the noble Lord say how these government-imposed swingeing rent increases help the Government's fight against inflation?

§ Lord Hesketh
My Lords, I do not think that it is fair to describe these as swingeing increases. There are many examples of authorities which have set the levels of rent below the guideline given by the Government. It is important to remember that the average council rent in the country is based on £ 22 per week.

§ Lord Gisborough
My Lords, can my noble friend say to what extent rent rises are influenced by the rent arrears in certain districts?

§ Lord Hesketh
My Lords, it is possible, I suppose, to extrapolate debt through to rent arrears. However, the department does not have the figures that specifically connect the two. There is a very wide range. If one examines the London area, the arrears vary from 47 per cent. in Brent to 24 per cent. in Hackney. I believe that my noble friend comes from the North-East. He will be interested to know that of the five lowest authorities, Durham's rent arrears are only 0.6 per cent.

§ Lord Monkswell
My Lords, we have been given the answer that the Government will not intervene where large rises in council house rents have been proposed by local authorities because they do not agree with interfering in local government. Will they make a statement now that they will not cap local authorities in connection with the poll tax if those authorities have levied a community charge to pay for local services?

§ Lord Hesketh
My Lords, I am sure that the noble Lord will not be surprised that I am not willing to 191 make the commitment he requires. I can assure your Lordships that for three-quarters of all authorities the new suggested rents will exceed the guidelines only by 3 per cent.

§ Lord Orr-Ewing
My Lords, can my noble friend say whether he has worked out how much local income tax would cost if it were put forward by the Opposition? How much would the roof tax cost if that were put on by the Opposition in accordance with its policies?

§ Lord Hesketh
My Lords, I believe that the Government will have to wait to see the Opposition's proposals in order to provide a reply to that question.

§ Lord McIntosh of Haringey
My Lords, the Minister is again sheltering behind the pretence that the Government do not intervene in the finances of local authorities. Will he not now acknowledge, as my noble friend Lord Stallard challenged him to, that it is the Local Government Finance Act 1988 and the two housing Acts which have caused these vast increases in local authority rents? It is not interference in any individual local authority which is required but interference to restore the level of government support for affordable rents.

§ Lord Hesketh
My Lords, it is important to remember that we have in this country housing benefit. The fact that the Government have asked authorities to recognise the value of their property and the fact that we ring-fence the housing revenue account does not mean that we are imposing a policy in order to charge more and more rent. It is important to remember that within the calculations reached by the Department of the Environment there is a factor for damping in order to protect.

§ Baroness Fisher of Rednal
My Lords, will the Minister tell the House what the total cost of housing benefit will be now that the Government have forced local authorities to increase rents?

§ Lord Hesketh
My Lords, I do not have that figure available today, the reason being that the year has not finished.

§ Lord Dean of Beswick
My Lords, is the Minister aware that there is a strong feeling abroad in the borough of Redbridge that the £ 15 a week increase has been deliberately levied because when the tenants of the council estates in Redbridge were balloted on the matter of privatisation they voted to stay with the local authority? The feeling is abroad that this is the Conservative local authority's way of punishing them. Will the Minister give an undertaking that any surpluses that accrue to the housing revenue account because of the substantial increases will not be used next year by these authorities to levy an artificially low poll tax?

§ Lord Hesketh
My Lords, if the noble Lord is referring to a surplus in rebate, I can assure him that from the department's point of view that is seen only 192 in regard to public housing and not in terms of a cross-subsidy to the community charge.

§ Lord Mackie of Benshie
My Lords, does the Minister agree that council house tenants are not suffering nearly as much as those people the Government have persuaded to buy their houses?

§ Lord Hesketh
My Lords, I believe that that question is rather wide of the one on the Order Paper.

§ Lord McIntosh of Haringey
My Lords, in an earlier reply the Minister claimed that the Government do not intervene in the ring-fencing of the housing revenue account. Is it not a fact that rent arrears are not paid for by ratepayers as a whole but are paid for only by those council tenants who pay their rents on time?

§ Lord Hesketh
My Lords, I do not believe that is the case because in the final analysis all adjustments are paid for by all council tenants and all taxpayers.