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Government loses Lords vote on Pay to stay

  • 19/04/2016
  • Author:MartinKitara

Government faces pressure to overturn ‘Pay to stay’ policy in the Housing Bill

Council housing block

The Government is facing pressure to reverse its plans to end subsidised rents (‘Pay to stay’) for high earners living in social housing from April 2017.

Yesterday, the Lords voted 240 to 176 in support of a Labour-led amendment to give local councils the discretion over whether to implement the change rather than make it mandatory.

An altered Housing and Planning Bill will be handed back to the House of Commons after the majority votes for opposition brought the number of defeats suffered by the legislation to six.

If implemented, ‘Pay to stay’ could see households in social housing with a total income of more than £40,000 in London and over £30,000 elsewhere pay rent at market or near market levels.

Up to 60,000 working families could be forced to leave their council homes as a result of new government plans to end subsided rents for high earners from April 2017. This is according to research by Savills UK, the estate agents, commissioned by the Local Government Association (LGA).

Opponents argue that it is unfair to suggest each couple earning £15,000 were high earners and Lord Best, a crossbench peer said the proposed policy was vindictive.

Critics of ‘Pay to stay’ have said that enforcing near market rents for council tenants earning over £30,000 risks creating further disincentives. Families on the cusp of the £30,000 limit could find that securing a pay rise or working a few extra hours leaves them thousands of pounds worse off as a result of higher housing costs.

The Government has now lost six votes on the Housing Bill and made a series of concessions. However, MPs could reverse the amendments voted on in the House of Lords when the Bill returns to the House of Commons next Monday.

"The Government are losing the argument on their extreme Housing Bill"

Labour’s John Healey, Shadow Secretary of State for Housing, said: “After a third day of defeats in the House of Lords, it’s clear that the Government are losing the argument on their extreme Housing Bill right across the board. The Government plans debated today are not just an assault on the security which is the hallmark of affordable housing - they’re an attack on aspiration too.

“It comes to something when Labour has to defend rights put into law by Margaret Thatcher. It shows just how extreme the Government’s housing plans are. The Government should listen to the arguments made by the peers on all sides of the House of Lords and drop their damaging plans.”

"These are wrecking amendments"

Baroness Williams of Trafford said: “These are basically wrecking amendments and I should be clear up front that we cannot accept a voluntary approach for local authorities. Local authorities can now, if they want, put a voluntary scheme in place, but we are not aware of any that have actually done so, so the policy must remain mandatory.”

She added that the Government was "in listening mode" and suggested changes could be made to the scheme in special circumstances.

Yesterday the Government also gave way on its plan to end lifelong tenancies, first introduced by Margaret Thatcher.

The Government said it would allow new fixed term tenancies of up to ten years rather than five and offered special concessions for families who have children of school age.

What help is available if you are struggling with housing costs?

If you are on a low income and struggling with housing costs, you may find the 'Help with housing costs' section of our website useful.

If you are struggling financially, you can use our Benefits Calculator to check your entitlement to benefits and our Grants Search to see if you are eligible for help from a charitable fund, based on your personal circumstances and needs.

The Your Situation section on our website contains information resources on benefits and grants and a Find an Adviser tool to help you find face-to-face advice in your local area.

Source: House of Lords Hansard – The Housing and Planning Bill 18 April 16

 

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