§ Mr. EdwardsTo ask the Secretary of State for Wales if he will estimate the gross cost to public expenditure in Wales if all local authority rents were to be reduced by 10 per cent.; and what would be the net savings in housing benefits. [28860]
§ Mr. Win GriffithsThe effects on public expenditure of a 10 per cent. reduction in council rents depend on what assumptions are made about the consequential adjustments to Housing Revenue Account Subsidy. If the reduction had applied in the current financial year and other elements within the subsidy calculation remained unchanged, the Welsh Office estimates that there would be a reduction of £26.6 million in rent rebates but an overall subsidy cost of £10.6 million. Because the rent reduction would marginally reduce the rate of increase in the RPI, there would also be a saving in benefits in the UK as a whole of about £1.6 million this year, rising to £6.1 million in the following year.