Housing and Planning Bill — House of Lords, 2016-04-18
Topic: Housing
Richard Best (Crossbench, Unknown): My Lords, in moving Amendment 73, I am grateful to my noble friend Lord Kerslake, the noble Lord, Lord Beecham, and the noble Baroness, Lady Bakewell, for adding their support. Amendment 73 continues the debate on pay to stay. It starts with the assumption that the Government are determined to introduce a scheme of this kind to address the issue of very high earners in council housing, such as the case, which has been much quoted today, of Bob Crow on £145,000 per annum. The amendment seeks to moderate the disruption to the lives of ordinary people which this surcharge on the rent could cause I note in passing that the extra payment by the tenant is not rent, since it does not relate to the property and the landlord does not receive it. It is a payment that goes to the Exchequer, based on one’s income, and that is normally called a tax. Of course, as we explored in the debate on Amendment 75, if the likely receipts from pay to stay are going to be less than, or much the same as, the cost of administering it, it would be a pointless exercise to impose this housing tax. I was pleased to hear the Minister announce a willingness to accept this point in principle. I do not believe that anyone wants vindictively to tax successful council tenants just for the sake of it. In at least some areas, however, where incomes are highest and market rents are way above council rents, the Treasury has clearly seen that pay to stay is a chance to generate some extra revenue for the Government In the light of the amendment that we have just passed—if it is accepted by the other place—councils will be able to opt out of this duty to collect this housing tax for the Exchequer. My guess is that unless the arrangement is changed by Amendment 75, so that local authorities can keep the monies that they raise and apply them to housing purposes, virtually all councils will opt out if Amendment 72 survives. This renders my amendment here almost redundant. However, for local authorities that wanted to introduce a pay-to-stay scheme, it would limit the amount to be collected. It would be helpful everywhere, of course, if the other place fails to support the amendment we have passed Pay to stay is another manifestation of the Bill’s overarching policy of, on the one hand, bolstering home ownership, which is fine, but, on the other hand, diminishing the social housing sector, which is not good. In this instance, the levy on council tenants is not for housing purposes: it is, to quote the Chancellor, to "contribute to deficit reduction". But these austerity measures do not apply to the generous treatment of those who want to buy, be they acquiring starter homes with big discounts or exercising a right to buy with even bigger discounts. For the buyers, there are no reductions in levels of subsidies for those earning more than £30,000, £40,000, £60,000 or £80,000. Amendment 73 would limit the transfer from council tenants to the Exchequer by restricting the levy on those earning more than the threshold, which, we have now been told, will be £31,000 per annum or £40,000 in London Amid all the uncertainties as to what this Bill really means, because so many key decisions have been left to subsequent regulations, we have some indications about the detail of pay to stay. It seems very likely, we now know, that the Government, very sensibly, will go for a tapered charge: that is, X pence for every £1 over the threshold, which is clearly much better than a cliff edge over which somebody just over the threshold would see a huge hike, perhaps doubling or even trebling their housing costs We also now know that the Government plan to set this taper at 20 pence in the pound. Twenty pence for every pound earned is equivalent to the doubling of basic rate income tax. For those earning £10,000 over the limit, the housing surcharge would cost them another £40 per week on the rent. That sudden imposition out of the blue would be very hard to bear for a couple with a family to support when both earn little more than the national living wage.