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BURSTOW CALLS FOR URGENT ACTION TO SCRAP £10 MILLION TENANT TAX
May 27, 2008 12:00 AM
Sutton and Cheam MP, Paul Burstow, has spoken out in Parliament about a Government stealth tax which will cost Council Tenants in the borough £10 million this year. The local MP used a parliamentary debate to back a campaign by the borough's Council Tenants to scrap the 'tenant tax' otherwise known in Government circles as negative housing subsidy.
Mr Burstow wants the Government to involve more tenants in a review of housing subsidy, at present just a handful of tenants across London will be consulted.
Paul Burstow MP told the House of Commons: "At a time when the Government are reeling from the consequences of their decision to double the 10p rate of tax, it seems remarkable that they would continue to defend a stealth tax of some of the poorest in our country-that is, many of our council tenants.
"I have been talking to the chair of the Sutton Federation of Tenants and Residents Associations, Jean Crossby, about the subject. She is working very hard with tenants in the borough and with tenants organisations around the country to challenge this iniquitous tax. She has pointed out that the Government are failing to engage seriously with tenants as part of the review. For example, I understand that here in London a handful of tenants will be involved in the review process. Surely more must be done to ensure that tenants can have a real say about the future financing of public housing."
ENDS
NOTE TO EDITOR
The tenant tax is known in official Government circles as negative housing subsidy. It means that if the Department for Communities and Local Government determines that a council's rent account will be in surplus, the Government can cream off some of the money. This is money that tenants pay as rent in the belief that it will be used to pay for the management and maintenance of the local council housing stock, and even of their own homes.
In Sutton and Cheam, this year tenants will pay nearly £10 million in tenant tax or, to put it another way, tenants will be paying their rent to the Government until mid-August. Until then, not a penny piece of their rent will benefit them. The Government say that the system of housing subsidy and negative subsidy is there to support areas that need the money more, but it means that families on modest incomes living in my constituency and in many others bear the brunt of that redistribution.
What is worse is that the current subsidy regime is headed for a national surplus. In 2001-02, the Government made a net contribution of £351 million. That fell to £252 million in 2002-03, and to £191 million in 2003-04. It is widely believed that the system is reaching a tipping point at which the Treasury will pay out less in subsidy than it receives in negative subsidy from local authorities. At that point, any argument that the negative subsidy is anything other than a stealth tax will fall to pieces.
Indeed, reports in Public Finance magazine suggest that this year the Treasury could be skimming as much as £194 million off rent payments across the country, and that figure will perhaps rise to £500 million within a decade. Tenants have every right to demand to know what the Government intend to do with that money. They have every right to call it a tenant tax and every justification in calling for it to be scrapped.
The text of the debate can be read at: http://pubs1.tso.parliament.uk/pa/cm200708/cmhansrd/cm080522/debtext/80522-0008.htm
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