Philip Hollobone criticises the use of council rent to subsidise the Treasury

Kettering MP Philip Hollobone was elected in 2005. Curiously, he is also a Kettering Borough Councillor. Yesterday during oral questions on Communities and Local Government, he posed the following question:

"Mr. Philip Hollobone (Kettering) (Con): If she will hold discussions with Treasury Ministers to ensure that revenue from the local authority housing revenue account is directed to social housing. [236263]

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): The current review of council housing finance is a joint review between my Department and the Treasury. It includes a thorough exploration of the housing revenue account—HRA—subsidy system. DCLG and Treasury Ministers regularly discuss the progress of the review.

Mr. Hollobone: Council tenants in the borough of Kettering pay £12 million a year in council rent, £3 million of which goes into the Treasury coffers and is not reinvested in council housing in Kettering. Why should council tenants in my constituency pay £1 in extra stealth tax for every £4 they pay in council rent?

Mr. Wright: I know that the hon. Gentleman and his constituents are concerned about this, and the Government recognise that the current system can be unpopular and perceived as unfair. That is precisely why we undertook the review of council house financing. The review of the HRA subsidy system will look at how local authority housing is financed. It will cover such issues as the recycling of rental income subsidies and the concept of negative subsidy, and I hope that that will address the concerns of the hon. Gentleman and his constituents."

Mr Hollobone raises an important point. Should there be more or less ringfencing in taxation?