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Shapps backs end to rent subsidies for tenants on over £100,000 a year

Housing Minister Grant Shapps is backing the call from Westminster City Council that wealthy Council tenants, certainly including those earning over £100,000 a year, should cease to have a subsidised rent. The initial report in the Daily Telegraph misinterpreted his remarks as meaning such people would be evicted from their homes. They would not be. They would be welcome to stay if prepared to pay the full rent.This has been confirmed to Politics Home.

That is right not just because of the manifesto commitment to security of tenure for existing tenants but also because stable and mixed communities are to be promoted. Indeed I would hope this would be helped by more exercising the right to buy - a more attractive proposition when the alternative of renting is not subsidised. But in terms of providing the help to those who need it the objective would be achieved whether the wealthy tenants decided to move out, thus releasing their home, or buy or pay the full rent - thus allowing the Council or Housing Association to pay for other housing for those in need.

Of course the details of what level the rent subsidy should be removed are important to avoid a disincentive to work and be promoted. Westminster propose that those earning more than £50,000 should receive no subsidy - with those earning more than £30,000 starting to see the subsidy reduced. There would be a sliding scale. The number of households in Westminster, earning over £50,000 a year, in Council or Housing Association properties is 2,200. Actually it is probably rather more now as that is based on a 2006 figure from the Housing Needs Survey.

This seems pretty reasonable. Those in a two bedroom flat would see the rent double from £6,000 to £12,000 a year.

I talked to a group of staff at a housing association the other day and they all thought it was wrong for high earners to get rent subsidies. The Labour Party are astonishingly out of touch in opposing this change.

Labour MP for Westminster North, Karen Buck, is "outraged."

She says:

“To say that 2,200 people earn more than £50,000 is a typical Tory red herring. They are focusing on the tiny minority who are earning a good income.

Is it a red herring? Are 2,200 homes of no consequence? I think it is a significant number for those of her constituents in overcrowded conditions, stuck on the waiting list. Does Karen Buck really think it is right for those on the waiting list to have their tax is going to subsidise housing for those who are earning quadruple their income?


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