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Council Housing Rents

Volume 486: debated on Tuesday 20 January 2009

The subsidy determination to which my hon. Friend refers includes additional measures, aimed at maintaining affordability for tenants, while addressing councils’ ability to raise income. They include the pre-existing protection for tenants, which limits rent increases to retail prices index plus ½ per cent. plus £2. We are aware of the concerns now being raised about inflation and the fixed guideline rent increases. I am looking closely at the position to consider what action may be appropriate.

I am grateful to my right hon. Friend for her reply, but she knows that council tenants throughout England face rent increases of between 5.5 and 7 per cent. That is a heavy burden and councils place the responsibility for it at the door of the Government’s formula rent guidelines. May we reconsider the matter? Nine thousand tenants in the city of Newcastle pay full rent and the burden on them is especially heavy. They do not want to be in the Cabinet; they want to get through the week. Is my right hon. Friend willing to meet council tenants from Newcastle and me so that we can explore ways through that genuine difficulty for so many decent people?

Of course, I understand and appreciate the concerns that my hon. Friend raises—I am always happy to hear from him about such issues. I am well aware that local authorities tend to say that the instructions are the Government’s—I suppose that that is inevitable. However, I am sure that my hon. Friend knows that, although the Government issue guidelines, it is for councils to determine the rents that they set. For example, last year, I believe that the guidelines suggested 5.7 per cent., but the rent levels were 5 per cent. Clearly, there is room for manoeuvre and councils have freedom to act and their own responsibilities. As I said, I am considering the position. A well meant desire to give local authorities certainty about action over two years led to issuing guidelines for two years. Obviously, this year’s guidelines must stand, but I will re-examine the implications.