- Created: Thursday, 20 October 2016 10:47
- Written by Robert Clough
From April 2017, 130,000 council tenants whose annual household income exceeds £31,000 (£40,000 in London) will have to pay 15p extra rent for every pound by which their income exceeds these thresholds. Councils must hand the surplus that they receive over to central government. The measure is voluntary for housing associations, but as they can keep the extra money, it may be lucrative for housing associations in London and the South East. The 15p per pound taper was a grudging concession by the government which originally wanted tenants whose incomes exceeded the thresholds to pay a full market rent; for London tenants this would have meant an average hike of £1,000 per month.
The government claims that this measure will ensure that the rents of ‘high income’ tenants are not subsidised by the ‘taxpayer’, and that it is only right that they should pay more. Yet ‘household income’ is defined as the joint income of the two highest-paid household members. A couple each working full-time on the government’s National Living Wage, as it is likely to stand in April 2017, will be earning over £31,000; on the current Living Wage Foundation’s living wage of £8.25 per hour outside London they will be earning over £34,000. These are not ‘high income’ tenants by any stretch of the imagination: but when it comes to defining who is poor and who is rich the government has a variety of yardsticks. A household on £85,000 is deemed to be too poor to buy a home, and so can get support to do so under Shared Ownership or Help to Buy. Tenants eligible for the Right to Buy extension will be eligible for a discount of over £100,000 regardless of their income, an amount which will be a huge subsidy for the better-off.
The government calls this policy ‘pay to stay’ as if those tenants who earn less than these thresholds are subsidised. In reality it is ‘pay more to stay’ as everyone in social accommodation pays rent – if they did not they would be evicted very quickly. But the government wants to stigmatise social housing tenants as supported by ‘taxpayer’-funded subsidies in order to undermine social housing as a whole. In reality, rents pay the costs of social housing over and over again, while the real subsidies are to private landlords: average housing benefit for social housing is £88.72 per week, for private rented accommodation £109.09 per week, or 23% higher. In addition, £10bn a year is lost through tax breaks on the sale of first homes, effectively a subsidy for the better-off.
Implementing ‘pay more to stay’ is problematic, and it is up to tenants to make it impossible. Councils (and if they join in, housing associations) will have to ask their tenants intrusive questions about their income, and expect tenants to inform on the earnings of all household members. This will be a complex process, and councils do not yet have the systems in place. Those income details will constantly change as tenants move in or out of work, or household members change, so the data collection will be continuous.
While we demand that councils refuse to implement ‘pay more to stay’, tenants must also refuse to comply with the data collection. We can stop this attack on social housing provided we get organised.
Fight Racism! Fight Imperialism! 253 October/November 2016