Westminster rent increase will “drive hard workers away”

Council wants more power to set rent rates after revealing 200 households earn more than �100,000

WESTMINSTER Council’s housing boss has called on the government to hand councils greater power to hike the rents of council tenants.

Councillor Philippa Roe said the move was prompted by figures that show 2,200 tenants who are earning more than �50,000 a year are living in a council house in the borough.

But the Labour group has lambasted the proposals saying the plans are an attack on middle earners and will push hard-working families out of Westminster.

The amount of rent a council can charge to their tenants is currently set by central government. It sets a price range between which councils can choose.

Cllr Roe, who will this week become strategic finance boss following a reshuffle, claimed the move was about “paying fair rent” and would raise extra revenue to pay for council services.

She said: “We believe councils should have greater freedoms to set rents, which are currently set by central government.

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“At the moment we have a one-size fits all system which does not take into account any change in circumstances.

“In Westminster, we estimate that we have more than 2,200 households in social housing who are on over �50,000 a year, which is more than 95 per cent of the working population earn.

“We also have around 200 households who are on �100,000 a year but yet pay the same rents as pensioners, who are on low fixed incomes above the threshold for receiving benefits.

“What we would do is take a look at what the person was earning and perhaps increase their rent by a small amount so they were demonstrably better off working but were paying slightly more in rent.”

Karen Buck, MP for Westminster North is outraged by the proposals.

“We are seeing the same steps the last Conservative government took, which saw rents soar,” she said.

“The government has already said they want to set council rent at 80 per cent of market levels.

“This is double or more than double existing levels. Nobody has explained how people can afford to pay rent. People who are on benefits are generally also in work too. If you raise rent levels, then the value of going to work is reduced.

“Council rent increases simply shifts people on to benefit. It reduces the extent to which work pays and pensioners who also have to pay a cost towards their own rent will seriously struggle.

“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.

“The overwhelming majority of council tenants are extremely poor, not just in Westminster but in the country as a whole.”

Labour Councillor Paul Dimoldenberg called the plans ‘barmy’. He added: “Putting up rents is just another way for the Conservatives to increase taxes for middle earners and will push many hard working residents out of Westminster.

“No other organization has increased its rent. Tenants are being punished for doing well and earning more money.

“Are council houses only for the poor? If that’s the case, the government needs to go on record and say that it is. It’s barmy. It’s madness.”

It is not clear yet how much rents would increase.

Cllr Roe said figures would depend on approval and further analysis by the government.

The average council rent for a two-bed flat in Westminster is currently �440 per month.

This is not the first time that council tenants in Westminster have been squeezed. Last month, council rents went up by 6.6 per cent, costing the average tenant an extra �337 a year.

In April 2010, the government pushed through a 3.1 per cent increase in rent.